Recently HDFC Bank has announced its accounting numbers for the financial year ending March 2017. As a matter of routine, it has again shown its capacity to deliver 20% plus compounded annual grown rate in its bottom line. Under the leadership of its founding CMD Mr Aditya Puri, son of an ex IAF officer, the Bank has maintained highest standards in its banking practices and customer satisfaction without compromising on the prudential norms. This year’s financial results caught my attention not because of its singular ability to deliver better numbers but for the report that its headcount dropped to 90,421 from 95002 at the end of December 2016 and further to 84,325 by end of March 2017. This is attributed to increased automation. The Bank expects the trend to continue as greater efficiency set in.
Earlier, L&T announced that it cut about 14,000 jobs. WIPRO also similarly reduced its manpower by about 600 jobs. Cognizant lay off 6000 employees. Such news items have become the order of the day.
Market observers have been lamenting about the jobless growth in almost all economies over the last decade. The negative growth in employment generation is considered as one of the main reasons for rise of voice against globalization and adoption of protective measures by various countries. UK’s choice to go for Brexit and USA’s current inward looking policies after elections last year are developments arising out of failure of these economies to find suitable work opportunities to their citizens.
Burning issue these days is that automation aided by artificial intelligence is taking away jobs from humans. In the words of Stephen Hawking "the automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining." He adds his voice to a growing chorus of experts about the effects that technology will have on workforce in the coming years and decades. The fear is that while artificial intelligence will bring radical increases in efficiency in industry, for ordinary people this will translate into unemployment and uncertainty, as their work would be taken up by robots.
Technological changes are not something new. These changes, rather rapid changes, have been happening for many years. As history tells us that the First Industrial Revolution moved jobs from rural homes to factories, created large organizations. Second Industrial Revolution witnessed the production of electricity and large scale production of goods, development of communications and mass scale engineering activities. The Third Industrial Revolution ushered in information & communication technology, automated machines and electronics. Each Revolution brought in enormous changes in the nature of jobs and the Fourth Industrial Revolution currently underway would be no different.
The invention of driverless electrical vehicles, creation of robots for doing a range of routine jobs and bots for data analytics and processing Big Data all have potential to cause enormous agony to low skilled and medium skilled workforce. Their ability to find a job elsewhere will diminish with the increasing dependence on automated machine. The impact of technological advances on jobs is a major issue; however it is not in the interest of humankind to discourage investments in technology.
Nature of jobs will change in the automated world but opportunities to work will continue to arise. New types of jobs, highly skilled jobs will rise in future. Besides, jobs which cannot possibly be by machines have the ability to survive despite technological onslaught. Textile industry is an example. Machine production of fabric has almost displaced the handloom weavers. But the demand for hand-made textile products continues to flourish and the trade figures for hand-made fabric show that the turnover in this segment has gone up multiple times with the advent of ecommerce. Similarly, workforce in other areas has to be ready to sharpen and upgrade their skills and to shift to newer areas to be relevant and beat the challenges brought in this disruptive and uncertain world where unknown unknowns have been rising.
