Automation, Artificial Intelligence (AI), Robotics and Technology are the buzzwords of the industries especially of manufacturing and IT services. Techno experts have been calling AI and Automation as the future of technology. Whereas the critics have been taking it as a threat of potential job displacement. As per the research report of PeopleStrong, a Human Resources Solution firm, India will make up around 23% of jobs to be lost to automation globally by 2021. However, one needs to understand the root cause of why India stands to lose a quarter of Jobs due to automation? Is it because of the process itself or due to lack of apt skills required to handle the challenge.

McKinsey Study

Another study compiled by McKinsey Global Institute says that advances in AI would have drastic consequences on the existing job markets. The Study estimates about 40-70 million job losses alone in the US market due to automation.


However, the study also acknowledges the fact that new jobs would get created in the market which would require a newer set of operational skills. So the constant updating of the skill set as per the technological developments becomes a crucial mandate to stay relevant in the job market.

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A historical perspective of the journey of innovation suggests that the fear of job losses looks misplaced. The report exemplifies the effect of the invention of personal computers which were to consume jobs at unprecedented scale but in fact resulted in the creation of 18.5 million jobs after accommodating the possible job losses due to the innovation.

Automation at its face value may appear as a destructive force to the job prospects but a conscious analysis suggests that it would create new possibilities which would require an advanced skill set and changed job roles. In line with the argument, Infosys, India’s leading IT firm, stated that automation allowed it to shift 9,000 workers from low-skill jobs to more advanced projects, like machine learning and artificial intelligence.

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Experts’ Views

The Economic experts based on the basic principles of demand and supply have been suggesting the fact that the process of AI and Automation can result in higher income levels as it would enhance not only the competitiveness of the product and offer better quality but also cash in economies of scale as well as higher labour productivity. This would ultimately get reflected in lower prices of the product which would, in turn, create higher demands, higher productions and hence higher income levels.

Further, the establishment of automation industry itself would generate employment opportunities for production of spare parts and services. Therefore, the efficiency argument goes in favour of automation. However, another significant aspect of the AI revolution is the variability in the impact distribution based on region as well as job classes. The developing countries are expected to be more affected than the developed world. As per the World Bank data, 69% of today’s jobs in India are threatened by automation. And India isn’t alone: China’s figure was 77% and other developing countries also scored highly.

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Mohandas Pai, former CFO of Infosys, have stated that very high skilled jobs and very low skilled jobs are going to be least affected due to automation. As high skilled jobs are yet irreplaceable because the technology is still in developing stage while the low skilled jobs would remain cost competitive. It is only those middle-class jobs which involve repeated and rule-based work could face the heat. As per the world development report,2016, of the world bank, as technology would streamline routine tasks, middle-skill jobs like clerical workers and machine operators may decline while both high-skill and low-skill ones would increase. It is the division of labour which will go to the advanced stage, not the elimination.

Further, automation technology promises huge possibilities from the perspective of art and craft sector. With the replacement of repetitive and loop-based work with automated devices and process, it is the human intelligence and creativity space which will get a strong push.

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Misplaced Fear

Also, one needs to understand the fact that the process of automation is going to be introduced in a gradual manner and thereby is not expected to produce a knee-jerk reaction in the job market. If India grows at 8% a year, with a labour productivity increase of 1.5% a year, jobs should grow at a rate of 6.5% a year. With automation, jobs may grow within a band of 4-5% a year for the next 10 years. Also as the cost of initial automation and robotics is high, In a country where wages are much lower than such costs, the impact will be felt at a slower pace. However, the major challenge to adopting the AI techniques is streamlining the education sector as per the future requirements. If the educational sector is overhauled and proper skilling is imparted, there would no exaggeration in saying that automation would promise immense possibilities to the global market.

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Conclusively it can be said that historical experience adjoined with the facts like lower costs, better quality, mass production, higher income levels, greater competition indicate the positives of adoption of automation technology while the fear of job destruction stands misplaced.

The post was originally published at Indian Espresso.