Friday, February 8, 2013

The Age of Robots?

Whether robots will displace large numbers of workers and create a labor market crisis or not is one of the great Malthusian debates of our time. Edward Luce points to this example of a Chinese restaurant which has started using robots as waiters.

This concern assumes even greater significance given a confluence of several trends. Globally, even in developing countries where economic growth is robust, manufacturing growth is increasingly accompanied by disproportionately low job creation. There is also growing evidence that most new jobs require higher skills and of pervasive skills mismatches within economies. In fact, an MGI survey found that in 2011, when US unemployment exceeded 9 percent, 30 percent of US companies had positions open for more than six months that they could not fill. And all this is accompanied by an increased use of robots to automate away low skill, repetitive jobs. This trend will undoubtedly gather momentum in the years ahead.

In the circumstances, there is a strong likelihood that a number of people without the required skills will remain without access to the labor market. Programs to equip them with required skills will obviously form an important part of the public policy agenda in the years ahead. But this has to be complemented by national social safety nets which cushion people against such uncertainties and provide their basic necessities to sustain a dignified existence. Such safety nets will be also useful to cushion against the various other economic uncertainties that have become pervasive in an interconnected world economy. The design of such safety nets, which while assuring the basic necessities does not disincentivize effort, will be one of the important social policy challenges ahead. 

1 comment:

KP said...

Dear Gulzar,

You make an interesting chain of connections -skills - jobs - displacement by machines - safety nets - disincentivizing effort.

I think the discussion just got larger than policy - for the reason that issues technology has created (just as it solved many too) lead to a wicked problem where there is no end state with more satisfying jobs ( emotionally / monetarily).

While we may quibble about wealth distribution at the sidelines, and pretend that education largely resolves the issue - I don't think the issue raised can be resolved with less than a fundamental re-look at what constitutes living (and working) and what are the rights of individuals that are distinct from their instrumentality as productive resources.

We in India have done a poor job of addressing these issues even while growth roughly followed the Solow Model - with Trade / Globalization and now Robots thrown in - addressing this as a problem of skilling (structural adjustment) appears to be unequal to the sweep of the issue raised.

While that may require a generational shift in thinking - some lighter moments here with a commercial - (not plugging the product , but the possibility !!...)