Will it make our lives easier or only increase income inequality?
Ambarish Gupta | November 12, 2016
The fear that new technology could take away jobs and lead to a greater income inequality is not a new phenomenon. During the initial days of industrial revolution, people were worried that they would get replaced by machines. You might be tempted to dismiss this as a natural (and very human) fear of new technology and of change, but that would be unwise. After all, we aren’t talking about an abstract situation here, but the fears and concerns of our fellow citizens. It is for this reason that any discussion on what automation holds for humanity has to include a focus on what impact it may have on income inequality. And if there is any possibility of a negative impact, what’s the best way to mitigate this.
The best way of focusing on the human impact of automation is to first accept that it is inevitable. Since the dawn of human civilisation, mankind has been searching for ways to reduce manual effort, and has been seeking out ‘smarter’ ways of getting things done. And it’s natural we do so – after all, the time we freed up from survival needs is what spurred civilisation on further.
Automation is changing how we live
Similarly, automation holds the prospect of transforming future society. Even now, and even in a society like ours, where technology hasn’t permeated to every level of our day-to-day existence as it may have in more industrialised societies, there’s been a sea change in how we work. Whether it’s hailing cabs with a tap on your smartphone, or getting your bank account statements without ever visiting the bank, or ordering food, automation and computerisation have given us a new way of doing things. But don’t let the above examples fool you into thinking that the benefits of automation accrue only to the globalised youth. On the other hand, these cut across age, gender, ethnicity and geographical barriers to make life better for everyone.
New tech has benefited everyone
Just think about how essential government schemes, subsidies and projects are in many urban and rural parts of our nation. From creating employment, to ensuring access to proper medical care, to easy redressal of civic complaints, automation is making all this possible. The government departments are increasingly interlinked, rural banking has gone hi-tech, and social benefits are directly transferred to those in need. The credit goes to the vision of our planners and their use of technology.
As these changes build up, the momentum and new technologies become more affordable and widespread, greater change lies for us. And slowly, we’ll see automation creep into every aspect of our lives.
Short-term inequality may go up
As said earlier, we cannot dismiss the fear of automation leading to a greater income inequality as mere scaremongering. It will be sensible to acknowledge it. In the past, technological improvements have led to job losses in the short term. But the way out is not to be stuck in the past or to abandon the intrinsic human drive for constant improvement. It is in fact to prepare for the societal and economic changes that automation will introduce.
A recent report on India’s IT sector by HfS Research warned that around 28 percent of low-skilled positions could be lost to automation by 2021. At the same time, the report also predicted that we will also see a massive emergence of new high- and medium-skilled positions. The implications of this report are clear – it is the low-skill worker who has to worry the most about being replaced by a machine.
Logically thinking, this effect shouldn’t be restricted to the IT sector. It may also take place in other sectors too, with varying levels of magnitude. Whether manufacturing, service or retail, low-skilled positions will certainly be lost as the adoption of new tech and automation grows. Some sectors and positions can expect to be unaffected (or face minimal disruption), but others may witness a large shift.
This may lead to a short-term effect on income inequality. At the same time, by being adequately prepared for these changes, we can ensure that not only people’s lives are not disrupted, but this new technological revolution propels us towards a prosperous and equitable society.
New tech creates new opportunities
Automation might take away some jobs, but it will also create many more. As new technologies are introduced, and we change our way of doing business, new positions will open up and new skillsets will be in demand. We – employers, employees and policy makers – must plan for this on a war footing. India has shown in the past that it can leap forward into a new era without going through all the intermediate steps you’d expect – our mobile and services revolution are ample proof of this.
If we plan this well, we could usher in tremendous growth built around new technology. It is therefore essential that we focus on new skills that will be relevant in a highly automated future. As job creators, we have to help our employees pick up new skills, as employees we have to look towards the future and see if we’re adequately prepared, and as policy makers, we have to see whether we have laid the groundwork for this transformation.
Support jobs will grow as well
Automation might shift the focus on economic growth towards high-skill jobs, but as income levels rise, new low-skill opportunities will also come up. Retail businesses will shift online, manufacturing will become reliant on robots, and IT services will change to a tech-intensive, big-data future. But these changes will also create new jobs – low and medium skilled. This does not mean we abandon our focus on skills growth or condemn many of our fellow citizens to a low-income life. We must ensure every citizen gets to look at the coming day with confidence that he or she is on the path to a higher income level, with the attendant higher quality of life. Skilling and education have to be given adequate attention, no matter what, as they are the best ways of ensuring an equitable, fair, and prosperous future for every citizen.
In the long run, quality of life will rise
A higher quality of life is the real target of all economic activity. Higher incomes, more free time to devote to family and personal dreams, greater safety (economic and physical) and greater satisfaction with life – these are the factors that have spurred technological innovation since mankind discovered fire and made the first stone tools.
Today, automation promises to continue this legacy well into the future. Services such as education and healthcare, which become more affordable and accessible due to the new systemic improvements introduced by automation, will change how we live – from the wealthiest to the poorest. Greater efficiency across industries will lead to more economic activity, higher governmental revenue, a more effective social net, and new opportunities that allow the youth to take responsibility for their future. The time saved on day-to-day tasks will provide an intangible (and massive) benefit of a happier society. That is the true promise of automation and it would be unwise to risk this by not planning for a world that is inevitable.
Gupta is founder and CEO of Knowlarity Communications.
(The article appears in the November 1-15, 2015 issue)
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