Job Loss Fears Must Not Slow Technology Adoption: Raghuram Rajan

KOCHI:
India has to embrace technology and become a leader in the digital transformation taking place around the globe without being bogged down by unfounded fears of job losses, incomes or machines replacing humans, renowned economist and former RBI Governor Raghuram Rajan said today.
In a keynote address outlining his vision for India at the #FUTURE Global Digital Summit organized by the Kerala government,  Rajan said that among the biggest obstacles to technology adoption are fears about man being replaced by machines — a fear that has existed since the industrial revolution, but never materialised.
“Two hundred years since the industrial revolution, jobs are still around. People and society adapt to do the things that machines cannot do,” he said. “With technology, across every job there is going to be a restructuring, taking away the routine aspects and leaving the creative and customised aspects of that job.”
Currently Professor, Finance at University of Chicago, Booth School of Business, Rajan said that in every industrial country more jobs have disappeared in the middle that in the extreme, that is the routine skilled and non-routine unskilled jobs, which has partly led to the anxieties.
With the advances in Machine Learning, Artificial Intelligence, and Robotics is this is going to change still further, as they take up the jobs ranging from those in unskilled sweatshops, to high-skilled professions like medicine.
“What jobs will humans be able to do in 10-15 years that are immune from threat? Jobs that require high intelligence and creativity; jobs that require human empathy and jobs where human working for us bolster our status in some way,” he added.
Rajan said that another aspect of the fear is where the incomes will come from; the answer for which is an assured Universal Basic Income.
In the Indian context, he said, “we have a huge hunger for capabilities at every level. If we can create incomes at some level, the aspirations of people will ensure that their children move up in life and get the opportunities that they did not.”
In terms of business opportunities, he said the government needs to do far more for start-ups to flourish in India by creating easy paths to incorporation and funding.
“One of the big lacunae in this country is risk financing and so our start-ups go elsewhere because they need risk financing which is not available in this country. We have to make sure Indian capital is available because often it is closest to the ground and understands the financing better,” he said. “We have to make sure that the companies of our future are incorporated in India, get Indian financing and expand significantly. We cannot miss out on the AI and Robotics revolution.”
Another significant area where India effectively needs a revolution is education and skill building, he said. “We need to remedy weaknesses in education at every stage, build more world-class institutions domestically and bring the talent back from abroad.”
“We are not as global as we should be even now. Too many of our people are too poorly educated or skilled to compete in a globalized tech-enabled economy,” Rajan noted. “If we don’t do that we will end up with a two-tier economy of a few “haves” and a vast population of “have-nots”, which is neither socially stable nor desirable.”
Accelerating the pace of growth and technology adoption was a point he consistently emphasised during his 30-minute talk to a packed audience at the Le Meridien Convention Hall in Kochi.
“Even as we improve infrastructure and logistics through the massive investments that we envisage, we have to recognize that the export-led growth path is closing quickly; partly as a result of political movements in the West to build tariff walls, and partly because technology is allowing them to bring back the jobs into their country through customized machine-based programmes utilizing less labour,” he said.
According to him, politics is one of the reasons that change does not happen fast enough. “Any change hurts the incumbents and those incumbents strike back. Today the mood against trade is often really a disguised move against technology. You can’t proceed against technology, but you can against trade. Ultimately the cause is the loss of jobs.”
India needs to join the global supply chains sooner rather than later, so we have positions there that we can defend, he said, adding that “we need to keep a focused tariff regime” to do so. Among the other factors that make a society adapt technologies at a much slower pace than expected are the fact that organizations and people are often conservative, and that there is a value to human interface that preserves jobs longer than we think, he said.
Also, he pointed out, there is “always a huge amount of hype associated with technology”. “We always think the future will come faster than it comes,” Mr Rajan said. “We often undertake experiments in very controlled conditions early on and succeed, and immediately extrapolate it to the much more complicated real world. For example driverless cars and quantum computing will eventually come, but people will have to be convinced, and the right conditions will have to be created before they do.”
He also warned that while the world embraces technology and competition, there needs to be a debate about critical aspects such as data ownership and how it is used. The two-day flagship #FUTURE event, organized by the Kerala government, concludes on Friday.