The ability to transform disruption into opportunity will be central in determining who will benefit and who will lose.
By Terri Chapman
Rapid technological innovation is fueling enthusiasm and pessimism simultaneously, even as the realities of its impact on jobs and growth are uncertain. How soon and to what extent artificial intelligence (AI), robotics and automation will be adopted will vary significantly between and within countries. The experience of emerging economies in the face of technological transformations and adoption may be vastly different from that of advanced economies.
The ability to transform disruption into opportunity will be central in determining who will benefit and who will lose from these changes. During a discussion on Navigating the Chrome Age: Jobs, Growth and Public Policy, panelists brought to light a number of areas where unconventional opportunities may lie.
How soon and to what extent artificial intelligence (AI), robotics and automation will be adopted will vary significantly between and within countries.
Jayant Sinha, India’s Minister of Civil Aviation, outlined the extent of the employment challenge in the country. He argued that providing gainful employment and meeting the expectations of India’s vast youth population will be a core challenge in the face of automation. Of India’s workforce of approximately 500 million people, just 21 million are in the formal, private sector and 23 million in the public sector. The challenge facing India is to find ways of providing gainful employment for the rest of the population, of which a majority are under the age of 35.
The presence of a large informal sector, a challenge in many developing economies, has acquired a new dimension in the context of technological transformation. Informalisation, a fundamental problem for many development economists, has been cast in a new light in the contemporary context of technological transformation. The informal economy in India accounts for 91 percent of employment, and firms are dominated by micro-enterprises. The small size of firms and informal ecosystem in India may create an opportunity as the digital economy becomes more prominent, allowing India to avoid deep structural transitions that will be required by more formal economies. It is not only in emerging and developing nations where informality is relevant, there has also been a rise in non-standard employment in advanced countries in recent years.
The informal economy in India accounts for 91 percent of employment, and firms are dominated by micro-enterprises. The small size of firms and informal ecosystem in India may create an opportunity as the digital economy becomes more prominent, allowing India to avoid deep structural transitions that will be required by more formal economies.
Two important conclusions can be drawn from this. The transformation processes experienced by countries will vary significantly. The opportunities that must be leveraged to take advantage of the inclusive potential of disruption are unconventional, requiring leaders and policy makers to challenge prevailing notions and policy frameworks.
As mentioned by Jayant Sinha, the vast movement of agricultural workers in India into other sectors, primarily the service sector, is challenging the prevailing farm to factory model. Mr. Sinha argued that countries such as India need to embrace a farm to franchise model if they are to fully benefit from their demographic dividends. New employment models building on services, new digital platforms, and the gig economy present significant employment generating opportunities. In India these opportunities are critical in the face of stagnating employment in the manufacturing sector.
Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20, argued that new employment models and relations, including a rise in informalisation, need to be met with new social security frameworks that link social benefits directly to people rather than to jobs. She pointed to three key imperatives for managing vast technological transformations — skills, new policy frameworks and global standards.
New employment models building on services, new digital platforms, and the gig economy present significant employment generating opportunities. In India these opportunities are critical.
While skills and education have been central to discussions on the future of work and technological change, new approaches to skills development are needed. The traditional short-term, job-specific, vocational training model that has been widely embraced, may not be suitable for the changing world of work. Gabriela Ramos suggests that an increasing focus must be on developing ‘soft’ skills over ‘hard’ skills and basic education. However, the means through which appropriate skills and education frameworks can be developed are likely to vary significantly between and within countries. India’s ailing education system and massive young population create unique challenges for upskilling and reskilling.
Yao Zhang, Founder and CEO of RoboTerra, suggested that despite the challenges presented by new technologies, including the unpredictability of innovation, technological change has typically been positive. She further pointed to an unconventional opportunity presented by ‘brain drain,’ a phenomenon that has traditionally been viewed as a major challenge for countries such as India.
While technological change and its impact on the workforce is a long-standing discussion, the pace at which these changes are happening today is unprecedented. This means that new models and approaches are needed to manage these transitions and turn disruptions into opportunity. Conventional approaches to job creation, skill development, and social protection must be reimagined and recast to meet new demands.
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