The rise of Artificial Intelligence (AI) and Machine Learning (ML) has already started to impact the jobs market. How do these changes matter to us, and specifically how do they impact entrepreneurs?
Twenty years ago, there was no Google. The founder of the world’s largest social media network Mark Zuckerberg was a 13-year-old teenager, probably trying to find his bearings between being a Bar Mitzvah and a prodigy in middle school. While Elon Musk, at 26, was already on his way to making millions that would set him up to dream bigger.
The fact that so much has changed in the last 20 years primarily due to technology is not lost on anyone. New job descriptions like social media managers, data analysts, app developers, why even ‘fun managers’, indicate how much faster this change has occurred than the industrial revolution.
“Back in 2006, there was no need for social media managers as most platforms had yet to be created. Today, Facebook has more than 1.5 billion users worldwide and, alongside other platforms such as Twitter and Instagram, has become an indispensable marketing tool with which brands can engage with consumers,” states a World Economic Forum (WEF) article titled: ‘10 jobs that didn’t exist 10 years ago.’
New ideas, new jobs
The kind of jobs that exist now was unheard of even a decade ago. The WEF article states, “One estimate suggests that 65 percent of children entering primary school today will ultimately end up working in completely new job types that aren’t on our radar yet.”
That’s the good news. Now for the bad.
Though technology has reshaped the workplace over the past two centuries, “the speed with which automation technologies are developing today, and the scale at which they could disrupt the world of work, are largely without precedent.”
The rise of Artificial Intelligence (AI) and Machine Learning (ML) has already started to impact the employment market.
According to a 2017 McKinsey Global Institute (MGI) report, “On a global scale, the adaptation of currently demonstrated automation technologies could affect 50 percent of the world economy, or 1.2 billion employees and $14.6 trillion in wages. Just four countries — China, India, Japan, and the United States — account for just over half of these totals.”
How do these changes matter to us, and specifically how do they impact entrepreneurs? What sort of socio-economic changes will it have? At the recently-concluded TechSparks event, investor and mentor Sanjay Anandaram set the stage for a lively discussion on tech and the future of jobs.
Need to create more jobs
India is a young country where 65 percent of the population is less than 35 years of age. “We need to create 100 million jobs. Tech and automation are likely to cause a huge disruption in the country,” Sanjay stated.
Fielding his questions were Editorial Director of Swarajya R Jagannathan, Chairman of Aarin Capital Partners Mohandas Pai, Partner at Trilegal Rahul Matthan, and VP Market Head New Economy Group at Axis Bank Sameer Garg. Stating that, at this point in time the world was on the cusp of two important factors, R Jagannathan said, “The world is awash with capital and there is an abundance of labour. The key to this is how do you put capital and labour together so that there is no disruption but the creation of new skills and jobs.”
According to him, “the US companies are alone sitting on $2.5 trillion, while world corporates are sitting on $7 trillion of cash or cash equivalent. So cash is not a problem, the question is how can it be deployed effectively.”
Technology also creates jobs, but there is a gap between the time it disrupts and the time it actually creates new jobs, he pointed out.
Showing us just how big the scale of the problem is, Mohandas Pai said that for a populous country like India and given our high birth rate, we have to create 17 million jobs a year. “We are creating only five to seven million jobs. We are 10 years behind the curve in terms of our need. We are a growing economy and have grown at 8.4 percent dollar CAGR from 1991 to 2017. Our GDP has gone up from $275 billion to $2.25 trillion,” he said, adding, “What must we do?”
Here’s what he proposed: “First, we must focus on labour-intensive industries. Our problem is we incentivise capital and not labour. Second, we must create a supply chain efficiency. We need to create a national market. Today, it is cheaper to buy from China than Nagpur because the cost of transportation supply chain is high. Third, we must create capital for small companies.”
Is the threat real?
Rahul Matthan believes that it is a bogey that technology will destroy jobs. “It does not destroy jobs, it transforms them,” he said. “Yes, some jobs may go, but it will create new ones that will involve more creativity. We will need to learn to learn new skills.”
Interestingly, the MGI report points out that “even if whole occupations are not automated, partial automation (where only some activities that make up an occupation are automated) will affect almost all occupations to a greater or lesser degree. The impact will be felt not just by factory workers and clerks but also by landscape gardeners and dental lab technicians, fashion designers, insurance sales representatives, and even CEOs.”
What then are the solutions that we should be working on? And, most importantly, what kind of education system should we look at evolving if we are to make the new generation ready to take up the new challenges?
Education 2.0, the solution
“It will have to be education 2.0 where there is individualistic learning, a virtual university which will certify many courses with combinations like nuclear science with dance and music, or biotechnology and finance,” Mohandas Pai said. In fact, many have stated that liberal arts is the future in the age of automation and AI.
In an interview with Business Insider, billionaire investor Mark Cuban reportedly said, “I personally think there’s going to be a greater demand in 10 years for liberal arts majors than there were for programming majors and maybe even engineering, because when the data is all being spit out for you, options are being spat out for you, you need a different perspective in order to have a different view of the data. And so having someone who is more of a freer thinker.”
According to Sameer Garg, in a study that Axis Bank conducted where they asked young people to send ideas for the future jobs, the top 70 percent responses on jobs of the future included agriculture, tourism, and IT/ITES.
How should policymakers and business leaders lead this change? According to the panel, some solutions include the power of learning and reskilling. Other solutions that lawmakers should look, according to MGI study, are: “Evolve education systems and learning for a changed workplace; Determine how the private sector can drive training; Create incentives for private-sector investment to treat human capital like other capital; Explore public-private partnerships to stimulate investment in enabling infrastructure; Rethink incomes; Rethink transition support and safety nets for workers affected; Embrace technology-enabled solutions; Focus on job creation; Innovate how humans work alongside machines; and Capture the productivity benefits of technology.”