India must embrace technology and shed fears of job losses, says Rajan

  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 and income losses, or machines replacing humans, said Raghuram Rajan, former RBI Governor.

Outlining his vision for India at the #Future Global Digital Summit organised by the Kerala government, Rajan, Professor of Finance at the Booth School of Business, University of Chicago, 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.”

In every industrial country more jobs have disappeared in the routine skilled and non-routine unskilled jobs segment, which has partly led to the anxieties.

With the advances in machine learning, artificial intelligence, and robotics 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.

Another aspect of the fear is where the incomes will come from; the answer for which is an assured Universal Basic Income.

In terms of business opportunities, he said the government needs to do far more for start-ups to flourish in India by easing rules on incorporation and funding.

Another significant area where India effectively needs a revolution is education and skill building.

“Even as we improve infrastructure and logistics through the massive investments that we envisage, we have to recognise 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 customised machine-based programmes utilising less labour,” he said.

Among the other factors that make a society adapt to technologies at a much slower pace than expected are the fact that organisations and people are often conservative, and that there is a valuable human interface that preserves jobs longer than we think, he said.

COMMENT NOW