Future of jobs
Commonomics

Future of jobs

Narendra M Apte

Coming decades, and more particularly, the next decade, will witness many changes on economic and social fronts as we are on the threshold of what is often referred to as Fourth Industrial Revolution. Of course, another major factor of possible upheavals will be the impact of climate change.

For the educated class in urban areas, who are not self-employed, it is desirable to take a hard look at prevailing job scenario. Also important is studying the likely impact of increasing use of new technology on current jobs. Future job potential for urbanites’ children is becoming a matter of major concern. This is not a research analysis of the current or future job scenarios. Objective of this article is to briefly discuss ordinary citizens’ concerns about the likely consequences of use of new technologies on future jobs.

As we all know the first Industrial Revolution (IR) happened in the last two decades of the 18th Century, around 1780s. Then, in the next two centuries (19th and 20th) we witnessed second and third IR which led to rapid industrial and economic development, mainly in Europe and America. After the 1940s, new technologies based on the use of nuclear energy and electronics have dramatically changed the way we lived. However,the irony is that in many parts of third world countries, full impact of even the Second and Third IRs is yet to be experienced.

Today, we are at the beginning of a Fourth IR. Developments in genetics, artificial intelligence, robotics, nanotechnology and biotechnology, to name just a few, will bring in unheard of changes in the way we live. Of course, it needs to be mentioned here that these developments regarding use of latest technologies are more likely to take place in the developed countries. In the developing countries like India, even as industries step up use of new technologies, not all sections of the society will be impacted by in a similar manner. But it is better to acknowledge that we in India will have to get ready to face good and bad impact of the Fourth IR.

It has been predicted that in the not so distant future, nature of jobs in traditional sectors like manufacturing, finance, banking, insurance, and even agriculture will drastically change. Those who do not acquire new skills may have to face risk of job loss.

On the job front, impact of the Fourth IR will be enormous. The world of employees is in for a phase of dramatic change. This is naturally a cause of worry for governments and employees. Experts say that even as new high skill job opportunities are created, low-skill jobs will disappear faster than expected. Consequently, unemployment and underemployment, especially among young people, with stagnating incomes for a large proportion of households, and rising income inequality, will be the most likely possibilities.

In a globalized world, businesses have to remain highly competitive. It is natural for them to resort to increasing use of new labour-saving and cost-saving technologies. As a result of the onslaught of new technologies existing structure, particularly in the manufacture of products will undergo dramatic changes. Apart from manufacturing, other sectors of our economy too will be affected in the coming decades. Thus, together with climate change impact, we will have to make plans to face the uncertainties of a kind never experienced before.

Migration of the educated young workers in search of greener pastures and its effects on jobs has already become a sensitive political issue in many advanced economies. In both the developed and developing countries, public debate about the future of jobs and whether there will be enough number of jobs to gainfully employ everyone, will top charts of popular debates.

To better understand the likely impact of increasing deployment of new technology on creation of new employment opportunities, it would be useful to consider severity of impact on different sectors of economy. Sectors which will be impacted are (a) organized which may be mainly industrial, government, etc.; (b) informal/ unorganized which can be both industrial and non-industrial like service and agriculture. Organized jobs are predominantly in urban areas and unorganized sectors exist in both rural and urban areas.

As regards the organized sector, what is the current job market scenario? There are fewer and fewer jobs opportunities in the government and public sectors. In coming years, manufacturing activities will be increasingly automated with the use of new technologies. New job opportunities in sectors like information technology, biotechnology, nanotechnology, etc are being created but experts say that employees will have to be imparted training for new jobs as old types of jobs are disappearing very fast. There is no guarantee of future employment for many semi-skilled employees. Even educated technical personnel will have to undergo re-skilling programmes to handle new jobs.

In the rural sector with possible but unpredictable impact of climate change, the new strategy will be needed to tackle the new issues and challenges.

At end, I wish to mention important observations made by Michal Rutkowski, Global Director, World Bank in a conversation he had with correspondent of prominent English daily recently:

(a) Social protection, in the form of social security provided by the government, will be needed as existing job security vanishes for a majority of employees.

(b) Current situation in which a well-functioning economy guarantees lifetime employment will simply not exist in the future. Our educated youth will have to accept that in the coming decades, job opportunities which will be created will be very different from what their parents had. What will be required is this: building success stories of a dynamic labour market, of successful entrepreneurs, people who change jobs often but who will have social protection nevertheless. This is the vision of the future which needs to be promoted by our governments.

(Narendra M Apte, a qualified chartered accountant, is a freelancer.)

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The facts and views in the article are that of the author.

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