The Post-Modern Industrial Revolution is here
Man living in caves used to spend almost all of his/her time
to support his/her survival and existence. There was no assurance of food,
shelter or the life itself. We have evolved as humans to the point where we are
willing to give up around 1/3rd of our day so we could spend the remaining
time comfortably and fulfill our needs. Will this hold in the future too? Will
we work to live or will there be an opportunity to fulfill any higher purposes
in our lives than to support our mere existence? How will technological
advancements affect this? Let us analyse how the current system operates.
The market system is based on one-person meeting needs of
another and getting paid for his/her services and pay others to get their
services. The cycle goes on. Although it has increased in complexity, but the
overall system has not changed considerably. For example, people employed in
the industry get paid by the owner of the factory for their services/labour
which he/she earns through selling the products to the consumers. However, this
all might change very soon.
We are at the verge of the fourth industrial revolution
(Industry 4.0). In a nutshell, it’s about automation, robotics, big data
analytics and a few other technological advancements that the industry is
quickly adapting. A detailed discussion on the Industry 4.0 will take several
books perhaps so the focus of discussion will be on automation and robotics in
today’s article.
Big manufacturing firms are moving towards automation and
robotics which will result in big job losses. The motivation for this is
efficient, cheaper, customized products that maximise the profit. The first
type of jobs that will be replaced will be those involving manual labour, repetitive
natured jobs. McKensey and company’s reports suggests that based on today’s
technology, only 5% of the current jobs can be fully automated. However, 60% of
all the tasks carried out in various jobs can be fully automated. Over time,
this will expand to jobs increasingly more complex in nature. To top it up,
robots can make new robots so job creation in the robotics sector will also be
limited.
In this scenario, the balance of people providing services
and getting paid for the work will be lost and the circle will break as the
role of providers is partially taken up by robots to some extent. The problem
with robots is they are producers but not consumers so the cash flows in one
direction only.
If no intervention is made and market is left to balance
itself out, then at least in the short run, there will be lots of people with
no income and plenty of time at hand. So now we have a situation where products
are cheap, but the purchasing power of the people is very low. This is not a
good scenario for anyone as reduced purchasing power of consumers will hit
sales hence profits and the consumers will be hit by not being able to meet
even the basic needs resulting in lower living standards. Divide between the
rich and poor will increase, crime rate will soar, and overall, world will be a
poorer, miserable place.
Now the question is can we the humans of 21st
century living in post-normal times deal with this situation and get a good
deal for everyone. Are there any strategies and policies that we can
collectively follow to make this world a better place for everyone? Can we stop
the technological progress made by humanity turning into a curse? Can the large
MNCs and manufacturing firms be persuaded that it is in their benefit to employ
more people and will that not halt the technological advancement? Will we not
be restricting the use of technology and hence the benefits of it? Is there a
third way?
I believe there is. Employing more people for shorter
working hours will result in more people having the share of the pie. Working
20 hours a week rather than 40 will improve the health and well-being. Type of
jobs available will most likely be of creative nature. There is a chance that
the productivity will be replaced with creativity. Governments can play a role by
providing trainings to improve the chances of one finding work and at the same
time guaranteeing the minimum income for the entire population. The expenses
can be covered by increased taxation to the corporate sector. Next big question
could be will it make us lazy and hence hinder our future progress. Current
studies suggest otherwise. The concept of minimum income and spare time has
been tried in various countries including India. An increase in the
entrepreneurial activity has been found. Local economy flourished as people’s
purchasing power went up. Everyone was a winner at the end.
Future can be bright and scary. These technological
advancements for whom whole of humanity has directly or indirectly contributed
and paid for can take us to verge of extinction and lives of despair or elevate
us to live the lives of fulfilment and joy (whatever that fulfilment and joy
might mean to you). It all depends on how we collectively deal with the
challenges and questions posed to us.
Naeem Minhas
Naeem Minhas
Thank You
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