The parking lot at Delhi airport gives you an idea of what the digital future may look like in India. For the barrier to open, you must scan your parking ticket. In most other countries, you would do that yourself. In Delhi, however, you hand over your ticket to someone who will do it for you.
The parking lot uses up-to-date technology, but staff members who are not really needed anymore are still employed. The general assumption is that technology boosts productivity by allowing employers to make workers redundant. It does not seem to apply in Delhi.
This may actually be a good sign, given that some 1 million Indians are estimated to join the labour market every month. Job-killing automation could cause a lot of harm. Foregoing automation, on the other hand, could hamper long-term development. Keeping staff to handle automated processes may seem counter-intuitive to most management consultants, but it makes sense in socio-political terms.
This issue is at the heart of how the future of work and artificial intelligence (AI) are currently being debated in India. At first glance, India seems to be doing pretty well in terms of growth and investment. The economy is expected to grow by around 7.4 %. That is one of the best rates internationally. In 2017, the country improved its World Bank’s Ease of Doing Business ranking by 30 places and rose to the 100th rank.
At second glance, things look more challenging. Growth is mostly driven by government spending (almost 11 % of GDP), not by private consumption or investment. Even more disturbingly, the current growth rate is insufficient for generating the millions of new jobs that India needs. Indeed, India’s unemployment rate is rising.
According to the Centre for Monitoring Indian Economy, around 31 million Indians are currently unemployed (seven percent). This figure, however, can be somewhat misleading because it does not include 270 million Indians living in poverty, many of whom depend on informal employment.
Compounding the employment problems, half of India’s population is still engaged in agriculture, but environmental stress – not least due to climate change – is reducing productivity significantly. If digitalisation is done well, it might have beneficial impacts (see box by Aditi Roy Ghatak). On the other hand, many poor people are still hardly literate – and that may prove an obstacle to rural modernisation.
There can be no doubt, however, that the future of work is critically linked to the future of employment. This is the context in which technology can make a difference – for the worse or the better. As is true of globalisation, digitalisation and technological progress will create winners and losers. In this regard, India does not differ from other countries. Due to its sheer size, however, it may well become the central battleground for “decent digitalisation” in emerging markets. The challenge is two-fold:
- In the global race for technological leadership, India can build upon its existing and quite reputable IT sector if it adapts to innovation fast. To do so, massive investments in research and development (R&D) and human skills are necessary.
- India must create high-quality employment that caters to the needs of the young and aspirational generation, in terms of both jobs and livelihoods.
Prashant K. Nanda of the business website livemint.com estimates that out of the one million new job seekers per month, half lack employable skills. According to a similar essay by Dilip Chenoy in the Hindustan Times, nearly 400 million people in India are unskilled.
India’s Industrial Training Institutes used to have a good reputation, but they have lost track of modern industrial production. New centres for skills training are mushrooming, but they seem to be chasing government subsidies and specialising in rent seeking. Most of them do not teach up-to-date vocational skills. Given that they are not rising to today’s challenges, one should not expect them to rise to tomorrow’s challenges. On the other hand, nobody – whether in India, Europe or elsewhere – really knows exactly what skills will be in labour-market demand in the future.
What impact digital technology will have, differs from sector to sector, of course. The Friedrich-Ebert-Stiftung, a foundation linked to Germany’s Social Democrats, recently held a workshop on the matter in the Delhi agglomeration. Leading business experts agreed that the sectors least likely to be affected by digitalisation are construction, domestic and/or care work as well as hospitality.
Business leaders at the FES event expected lay-offs to concern mostly workers with some, but not very sophisticated skills. Repetitive tasks in manufacturing are the easiest targets for automation. This is a common pattern, and it explains why growth often remains jobless.
Mumbai beats Hamburg
Logistics is among the front runners in technological innovation. When talking to trade union members in logistics, one gets a feeling for the enormous challenge ahead. For example, the Jawaharlal Nehru Port in Mumbai is now one of the world’s most digitally controlled ports. It is the largest container port in India and among the global top 25. Currently, it handles 10 million containers annually with a mere 1,700 permanent employees. The comparative figures for the Hamburg Port Authority are 8.8 million containers and 1,800 staff. To judge by these numbers, Mumbai’s port is more digitally advanced than Hamburg’s. In both cities, however, the docks used to be crowded with workers. Now they are empty and digitally managed. The trend is good for business, but bad for employment.
India is famous for its strong ICT sector. Corporations involved in information and communications technology have been making international headlines for about two decades. Nonetheless, even their jobs are not safe. It surprised many when the sector drastically cut jobs last year. The leading corporations – including Infosys, Wipro, Tech Mahindra and HCL – laid off more than 50.000 employees. International competitiveness had suffered due to a lack of investments and innovations, so managers had to adjust.
The ICT sector is supposed to be the future. Its staff members belong to the middle classes and include many women. Job losses in this sector are therefore especially painful. And more bad news seem likely because artificial intelligence is expected to be a game changer. The work done in call centres and comparatively simple computer programme writing may soon be taken over by advanced computer programmes.
Tandem Research and FES are therefore convening a series of six workshops with diverse stakeholders in India – including the government, civil society and private sector. The goal is to collectively evaluate and identify the narratives, social frameworks and key players for shaping AI in India.
The country faces opportunities and challenges. Advances in AI-based technologies could improve the quality, accessibility and affordability of health care and education for under-served populations, for example. On the other hand, unguided AI may cause serious problems in terms of job displacement, data privacy or the transparency of accountability of decision-making by algorithm. Moreover, the gains of progress need to be shared fairly. Broad-based debate is needed to ensure that #AIforALL does not become empty rhetoric.
India must shape new technologies to bring jobs and opportunities to the bottom of the pyramid and to solve persistent development challenges of providing health care, education and a clean environment. In the short term, it is indeed smart to adopt automation technology and keep unskilled staff to operate it – as is the case at Delhi airport’s parking lot.
Patrick Ruether is the representative of Friedrich-Ebert-Stiftung (FES) in India. FES is a non-profit foundation with close ties to Germany’s Social Democrats.
Vikrom Mathur is a co-founder and director of Tandem Research, a Goa-based, multi-disciplinary research collective which specialises in policy advice on technology, society and sustainability.
Urvashi Aneja is a co-founder and director of Tandem Research.