Automation –Evolution or Destruction?

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Introduction

This brings me back to my old school days when we had debates on whether technology was a boon or bane. If we try to remind ourselves, last year a lot of IT, financial services companies let go a lot of employees. I remember reading about it. The reason cited for the layoffs was automation. And then, recently in a newspaper, I read an interview of a big IT company CEO mentioning that automation will make small cities job deserts. This sounds very alarming as co incidentally with almost negligible growth in job market; there has been a brake put on hiring.

First things first, what is Automation?

As per some primary research – Automation is the use or introduction of automatic equipment in any process or facility without human assistance. This means lot of operational or manual intervention jobs will be replaced by machines. This reduces cost of organizations and increases efficiency. Automation helps in increasing productivity, which is a key pillar in economic growth.

Why so much hue and cry?

The current situation is this –Majority of advanced economies USA, UK, Germany, Japan etc. are struggling to sustain growth with primary reason being drop in productivity which is attributable to ageing and shrinking of working population.

Economists are worried that these economies might be entering into stagnation which is well beyond alarming. These advanced economies are house to a lot of big commercial and corporate organizations, firms, companies which employ a lot of workforce worldwide. In order to sustain growth, all of them are seeking help, and one of the answers to their worry is –Automation. Given the multiple benefits, adopting this technology becomes more compelling for the corporates and companies. This creates more pressure on the middle class as the middle class jobs will be under pressure. Other related societal issues like income inequality, joblessness, increasing violence etc. will get more fuel from this.

To give you a more concrete view on this, let me share with you what the World Bank President, Mr. Kim Yong Jim has recently said at Mobile World Congress. He has warned that the rise of automation would mean that economic growth may be limited to only a handful of countries. He said that if the technology industry fails to step up its efforts in building a brighter future, many countries will be beset by “fragility, conflict, violence, extremism and eventually migration”.

The news websites of other countries also do not give a happy version of the story. Whenever automation word pops out, there is a worry word just right there attached to it. Also, if we take automation, the factors pushing in its favour outweigh the factors that are against it.

It increases productivity, which is a real challenge for us. Earlier it was a person who replaced another person in case of inefficiency. Now, it’s a machine which could be an alternate to non-productivity. Human beings can match up to productivity levels of a machine but sustenance will always be a question.

Another thing is commercial viability. Although right now automation or artificial intelligence might not be totally feasible for everyone, but it might or it will be in the future. Technology is very fast changing and turnaround period for technologies have been reducing. 20 years ago, mobile phone was a luxury and even a basic mobile phone costed you a bomb. Today, they are a necessity and have become inexpensive. Economic benefits are multiple. It is a cliché but as technology gets more cost effective, it increases profits. Less legal hassles, more production capacity etc. are a few other benefits to name.

What ahead?

This whole debate or worry about automation or new technology hinges on evolution. We as human beings have evolved and so with us has technology. And evolution has come from the needs and wants of us human beings. If we think, when computers first came in, we resisted a lot that it will take our jobs. It definitely took out and made some jobs extinct. But it also pushed our human needs and wants ahead. We developed ourselves and developed more skills. In Germany, they totally reformed their labour institution and have started helping labours and workers to develop skills or specific skill sets in order to acquire new or other jobs.

The human needs and wants are infinite — we are already exploring the space and also trying to drill down to the core of the earth. We do not know or might even not have any limits or boundaries.

One of the most influential economists of 20th century Mr. Joseph Schumpeter described this process of technological change as technology and innovation will destroy some jobs while creating many others. He called it “creative destruction.”

As per my opinion, we have been evolving at a very tremendous pace. Evolution (Change) is the key here or anywhere. But the pace has been so disruptive, there has been absolutely no time left to adjust or adapt or improvise. We as human beings created technology. We have been pushing our limits to what a human mind or body can do on everyday basis. Automation, artificial intelligence etc. are a result of such needs. Automation is also a result of such evolution and pushing. If we have made some jobs extinct, we also will create new avenues of work.

The pace at which evolution is being accepted needs to be pushed more. We have introduced technology, but now technology will induce our next evolution.