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  • Raghav Sand

Automation and Jobs: Should We be Alarmed?

Last month, a leading international bank’s report stated that by 2022, close to 3,00,000 jobs will be lost in the tech industry. This was not a click-bait caption. We have heard similar warnings before, but the outcome has not been anywhere close to the prediction. Does that mean we should not pay attention to the report about possible job losses from automation? Politicians and economists from both sides of the aisle have divergent views on the socio-economic impact of automation. We don’t have to wait for the future to witness the churn in the job market because it is an ongoing process. Every individual will cope with the disruption caused by automation in their own way, but inaction from corporate and political leaders can sow the seeds of irreparable discord.

Humans have survived and thrived on planet Earth for thousands of years. We have made more technological development in the last two centuries than ever before. Every job is inherently designed in way that makes it replaceable by someone or something more efficient. If you had the option of being prepared or adopt a wait-and-watch approach, which one would you choose? Ideally, having a plan of action for any exigency is the rational approach. We may not have all the answers when the preconceived situation unfolds, but a head start will provide a sense of direction.

Divergent Data

People across the world have been working fewer hours and there has been a slow and steady increase in living standards. At the same time, we have seen inequality rise exponentially. By the end of 2019, Indians were working for approximately 2,500 hours annually, while their counter parts in United States, Germany and France clocked an average of 1780, 1500 and 1450 hours, respectively. Quants are gaming the market, while some are doing back breaking manual work.

Job losses and disruption caused from Covid-19 pandemic has derailed economic development. When economic data from 2021 is compared with corresponding figures from 2020, the low-base effect gives an impression of stratospheric recovery. Developed economies have tried to spend their way out of the pandemic-made downturn. The surplus liquidity in developed economies has led to record levels of inflation. Some of the financial aid has trickled down to emerging economies and we are witnessing inflated asset prices in most markets.

No industry is untouched by the effects of automation. On one hand, entrepreneurs are getting better return for capital by implementing automation, while on the other hand many low- and middle-income workers are becoming obsolete. Upskilling and retraining have not kept pace with innovation.

Perception and Perspective

When automated teller machines (ATM) were first introduced in late 1960s bank tellers were apprehensive about losing their job. Today, we have more ATM machines and bank tellers than ever before. Not all fears materialize. Global population has registered a four-fold increase in the last century and millions have been elevated from abject poverty during this time. Without some degree of automation, it would have been impossible to provide goods and services to billions. Due to this reason, technology has always been seen as a facilitator of convenience.

Lately, the pace of technological development has outpaced contemporary human needs. When innovators use the available technology to develop their products and services, each reiteration gives birth to something new. It is not advisable to stop looking for new technologies. Whenever humans have improved prevalent technology in one sector of the economy, the innovation invariably found acceptance in other sectors. Take, for example, the advancements in space research. Sectors such as automobile manufacturing, biotechnology and aviation have all gained from the insights received from space exploration. If we build walls around technological advancements , it may create roadblocks for holistic human development.

For the sake of clarity, let us take the example of Covid-19 vaccine. As we all know, vaccine for Covid-19 virus has been developed in record time. How did scientists manage to deliver vaccines with such high efficacy in such a short time? Some of the science that enabled this feat was developed by engineers working on Higgs events and electric vehicles. The processing power deployed in quantum computing was solving problems elsewhere, before vaccine developers thought of using it. Had we halted the development of machine learning due to perceived job losses from advancements in technology, the time taken for Covid-19 vaccine development would have been longer, to say the least.

Like everything else, perception about automation differs from person to person. If you are someone who has gained from replacing machines with humans, you are bound to have a different point of view than someone who has lost their job. Automation has skewed the benefits of capitalism in favour of owners, while the workforce has been sequentially marginalized.


Collaborative robots, commonly known as cobots are meant to operate in combination with, and in close proximity, to humans to perform their tasks. Cobots are deliberately built to physically interact with humans in a shared workspace. This term may be new to you, but cobots aren’t actually new. Since cobots are aimed at helping humans do their jobs better and not replacing them, human acceptance and enthusiasm in working with cobots is high.

The Gig Economy

Do you feel ride-sharing apps and food delivery companies gave birth to the gig economy where “workers enter into formal agreements with on-demand companies to provide services to the company’s clients”? On-demand workforce has always been a part of the economy, though, their share has risen to somewhere between 25-30% of the overall workforce in the last decade. The cyclical nature of the economy and seasonal fluctuations in purchasing pattern became the primary reason for engaging gig workers as per need. Enterprises have adopted the practice of getting as much work possible by automation and engage humans only for the last mile delivery

Not too far from now, self-driven cars will replace human-driven cars and merchandise and grocery will be delivered by drones. Such futuristic technologies will have to get accepted in developed economies before entering countries like India. Automation may not be immediate, but it is imminent. What will happen to those who lose their jobs to automation? Certainly, they cannot be absorbed by other industries which have their own trajectory of technological development. Will these workers, labelled as ‘surplus to requirements’, ever find a dignified job again?

Disruption is the buzzword in a world bitten by the start-up bug. It is easier to cope with disruption at a young age. A person in the age group of 50-60 years may find it difficult to monetize their skills due to difficulties arising from automation. Inflation and high life expectancy are forcing people to work for longer years than before. If people don’t have enough money for their old age, their living standards and overall well-being may deteriorate.

Change never happens at once. To visualize and comprehend the extent of change, we have to look at the state of automation and jobs over a 5–10-year horizon. Every time, new technology has absorbed some of the previously displaced workforce. We may be approaching the saturation point of new technology’s ability to create large-scale employment.

Insufficient jobs in the coming years may reduce the number of people opting formal education and the three- or four-year college degree may seem unnecessary. Advocates of universal basic income (UBI), “a government program in which every adult citizen receives a set amount of money on a regular basis”, are receiving support from unexpected quarters. UBI may not be good for economic progress as it may disincentivize innovation.

The search for a middle ground between dignified welfare payment and modernization should be pursued diligently. Humans owe a huge debt to the reactive skills of their ancestors. All this while, we have lived on this planet with the basic principle of finding solutions to the problems we have encountered individually or societally. Should we not use the available resources to prepare ourselves for a situation that is knocking at our doors?

Let us try to make sense of the possibility of mass unemployment due to automation. Many of us buy term life insurance. There is a reason why the premium for term life insurance is lower than other forms of life insurance. If the insured person survives the tenure of term life insurance, they get nothing in return. And, if the insured person passes away during the relevant period of term insurance, their nominee/ nominees get a one-time lump sum payout.

Not everyone will die during the tenure of term life insurance, does that mean they should not take a term life insurance plan? Similarly, not everyone will lose their jobs due to automation. Does that mean everyone should write-off the possibility of job loss due to automation as hype and pessimism?

Numbers Do Lie

It is easy to lie with statistics. The per capita income of a region or country is calculated by dividing area’s total income by its population. If the national income is increasing at a steady rate, it does not always mean that every citizen is making that amount of money annually. When Government, bureaucrats and the opposition try to sell their idea to citizens, they do so by presenting a part of data which substantiates their point. Without any regrets, they will suppress data which makes them look bad. Undoubtedly, automation has increased national income, but not everyone has benefited from it.

Outrage is here to stay. Anyone losing their job may feel adrift from society. Distraught individuals may find solace in substance abuse or contemplate causing self-harm. When common citizens don’t get an appropriate response for their demands from the Government, they resort to collective activism. When societal inaction can lead to an existential crisis, we can no longer keep our head-in-the-sand.

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