Syllabus: GS III Indian Economy and issues relating to planning, growth and employment
Examine the impact of technological advancements, particularly artificial intelligence, on employment patterns in India. How can the country strike a balance between increased productivity and maintaining sufficient employment opportunities amidst technological disruption? (10 M)
Introduction
Technological advancements, particularly artificial intelligence (AI), are transforming employment patterns in India by automating tasks across various sectors. While these advancements boost productivity and innovation, they also pose significant challenges to labor absorption in traditional industries, necessitating a balanced approach that supports both technological progress and employment opportunities.
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Impact of AI on Employment Patterns
- Automation of Routine Jobs: AI has driven automation of repetitive and low-skilled jobs, particularly in sectors like manufacturing and services, resulting in job displacement.
- Example: In the textile industry, AI-driven automation has reduced the demand for manual labor (FICCI Report, 2023).
- Skill Mismatch: The growing need for AI-related skills such as data analysis, machine learning, and programming has created a significant skills gap, leading to underemployment in areas where such competencies are required.
- Example: According to NASSCOM’s 2023 report, over 50% of IT jobs now demand AI-related skills, but many workers lack these competencies.
- Rise of the Gig Economy: AI-driven platforms have led to the growth of gig and freelance work, offering flexibility but also contributing to job instability and informal employment.
- Example: Platforms like Ola and Swiggy rely on AI-driven algorithms to optimize their gig workforce, creating an increase in informal employment (NITI Aayog AI Report, 2022).
- Sectoral Displacement: Traditional sectors such as logistics are experiencing job losses due to AI-driven automation in supply chains.
- Example: Automated warehousing in e-commerce has reduced the demand for manual labor in logistics (ASSOCHAM Report, 2022).
- Creation of New Jobs: Despite these challenges, AI has generated new employment opportunities in emerging fields like cybersecurity, fintech, and healthcare.
- Example: AI applications in healthcare, such as telemedicine and diagnostics, are creating new job roles (NITI Aayog AI Report, 2022).
Balancing Growth with Labor Absorption
- Skill Development and Reskilling: Significant investment in upskilling and reskilling the workforce is essential to bridge the skills gap and prepare workers for AI-driven jobs.
- Example: The Skill India Mission aims to reskill 400 million workers by 2025 in emerging technologies (Ministry of Skill Development, 2023).
- Promoting AI in Agriculture: Integrating AI into agriculture can enhance productivity while preserving employment in sectors like precision farming and drone operations.
- Example: NITI Aayog’s pilot projects on AI-driven agriculture have shown potential to improve both productivity and employment (NITI Aayog, 2022).
- Support for SMEs: Tailoring AI technologies for small and medium enterprises (SMEs) ensures that they can adopt AI innovations while maintaining labor demand.
- Example: The MSME Digital India program encourages AI adoption among SMEs to prevent excessive job losses (MSME Ministry, 2023).
- Encouraging AI Startups: AI-driven startups can absorb displaced workers by creating new industries and job roles in sectors such as fintech, healthtech, and agritech.
- Example: The rise of AI startups, with a 40% increase between 2020 and 2023, has contributed to job creation in emerging sectors (Startup India, 2023).
- Social Safety Nets: Strengthening social security systems, such as universal basic income (UBI) and job transition programs, can offer stability to workers displaced by automation.
- Example: Rajasthan’s pilot UBI program aims to support workers displaced by AI and automation (Economic Survey, 2023).
Solutions to Enhance Labor Absorption
- AI in Education: Introducing AI-related courses at the school and college levels equips future workers with necessary skillsets.
- Example: The National Education Policy (NEP) 2020 recommends integrating AI and coding into school curriculums.
- Public-Private Partnerships: Collaboration between the government and private sector is crucial to developing AI skills and creating job opportunities.
- Example: Companies like TCS and Infosys have partnered with the government to train youth in AI-related technologies.
- Leveraging AI for Entrepreneurship: Encouraging entrepreneurship through AI-driven initiatives, especially in rural areas, fosters job creation.
- Example: The Startup India Fund supports AI-based innovations in agriculture and other sectors.
- Regulating Automation: Introducing policies to regulate the pace of automation in labor-intensive sectors can prevent massive job displacement.
- Example: The World Economic Forum’s guidelines on human-centric AI emphasize balanced AI adoption.
Conclusion
India must adopt a multi-faceted approach that combines skill development, responsible AI adoption, and support for vulnerable workers to balance technological growth and labor absorption. By fostering the right policies and initiatives, India can ensure that its workforce remains equipped and inclusive in the face of technological disruption.
