Will automation play spoilsport to Narendra Modi’s “Make in India” dreams?

Machines could soon take over.
Machines could soon take over.
Image: Reuters/Amit Dave
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India’s jobs could be under severe threat from automation.

World Bank president Jim Yong Kim painted a grim picture during a discussion on extreme poverty at the Brookings Institute in Washington DC on Oct. 04, noting that automation poses a serious threat to jobs, especially in developing markets like India, China, and the countries in Africa. He then urged governments to re-think their strategies for providing new jobs to the millions joining the workforce every year.

Referring to research based on World Bank data, Kim said 69% of all jobs in India could be at risk because of automation. In China, this figure is expected to be around 77%. Although Kim did not give any details on when the switch to more automated jobs would take place, he indicated that the consequences would be dire.

“Now, if this is true, and if these countries are going to lose these many jobs, we then have to understand what paths to economic growth will be available for these countries and then adapt our approach to infrastructure accordingly,” he said.

“As we continue to encourage more investment in infrastructure to promote growth, we also have to think about the kinds of infrastructure that countries will need in the economy of the future. We all know that technology has and will continue to fundamentally reshape the world,” he added.

Kim’s comments add to the challenges faced by the ruling Narendra Modi government in India, which has been actively promoting its “Make in India” program to attract investment and subsequently boost jobs, in labour-intensive manufacturing sectors. But these sectors are particularly prone to infiltration by automation with hi-tech robots potentially replacing laborers on the work-floor.

India is set to add a huge population of young workers to its labour force. By 2050, India’s working-age population is expected to cross one billion to become the largest in the Asia-Pacific region, according to a report by the United National Development Programme (UNDP) released in April.

Modi’s Bharatiya Janata Party came to power in 2014 promising more employment but hasn’t really achieved much success so far. Between January and December 2015, only 135,000 new jobs were added in eight labour-intensive sectors—the lowest in six years.

Automation could make things worse.

“If we want (Make in India) to be successful, we need to prepare for manufacturing as it will be five years from now, not the way it was five years ago. Given the rapid changes happening in manufacturing, we should be cognizant that manufacturing by itself is no panacea for our challenges of economic and job market growth,” Rishikesha T. Krishnan, director and professor of strategic management at the Indian Institute of Management, Indore, wrote in Founding Fuel, a media outlet for entrepreneurs, last year.

As Kim puts it, “The traditional economic path from increasing productivity of agriculture to light manufacturing and then to full-scale industrialisation may not be possible for all developing countries.”