Tuesday, September 06, 2016

Robot lovers maybe the only solution to unemployment.

With 1.3 billion people, 356 million between the ages of 10 and 24 years, India must create tens of millions of jobs every year or risk facing social unrest. Politicians concentrate on a couple of numbers only. The most important is the rate of growth of the Gross Domestic Product, or GDP, which is used to advertise the achievements of the government, even if numbers are a little suspect. Since the majority of people have not gone beyond primary school it sounds like a magical incantation, akin to producing an egg from a man's ear. Then there is political point scoring, an opportunity to say yah-boo to the opposition in parliament. The other vital number is tax collection, because the more we pay in taxes the greater the ease of distributing handouts to win elections and for politicians to go to Rio Olympics, with wives. However, for the nation the most vital figure is job creation and the figures are alarming. We need to create 14 million jobs every year for the next 15 years. From 2004-05 to 2011-12, 7.2 million non-farm jobs were created while 4.2 million farm jobs were lost. A net gain of 3 million over 8 years. From 2009 to 2012 less than 1 million jobs were added every year in 8 select industries. The solution should be simple. Use the vast labor force to increase low cost manufacturing, like China has done so successfully, and India should become a wealthy country very soon. Not so easy, it seems. The International Labour Organization has found that 9.2 million jobs in textiles and footwear, typically low end, in Asia are threatened by automation, including 88% in Cambodia, 86% in Vietnam and 64% in Indonesia. Increasing competition among poorer nations reduces their bargaining power against western brands and increasing wages make it unprofitable to continue manufacturing. Some factories have shut down while others are relocating to cheaper locations. Automation has allowed a lot of manufacturing to shift back to western countries, but without any gain in job creation. In the US manufacturing has increased by 20% since 2009 but manufacturing employment has increased by only 5%. Manufacturing output has increased to $2.2 trillion in 2015 from $1.7 trillion in 2009 but total employment has decreased by one-third since 1970. In 2011 the Germans first came up with the concept of Industry 4.0 and this was adopted as a national program by Chancellor Angela Merkel in 2013. China announced MiC25 last year. India has about 10 years to make the most of our supply of low cost manpower after which the window will close. The only solution for India is to reduce birth rates. Help is at hand. Seems that we will soon have robot lovers. Robots cannot produce babies, so the government should supply robot lovers instead of MGNREGA. But will they? 

No comments: