We think we see yet we don’t. What this effectively means is that though we keep hearing and reading about various developments in the world, we are rarely able to assess their impact on our lives. To be honest, we hardly bother to understand what the changing world could mean for the way we live or do business. We do accept that new developments in technology, business processes, management concepts, etc. may, sooner or later, pose new challenges for us. Yet we do not, usually, try to change ourselves at the same pace to meet those challenges. Humans are prone to thinking that bad things will happen only to others. So when the new reality starts knocking on the doors like a ravenous wolf we find ourselves at our wits end.
Many in the world of business and its management keep their eyes open but remain blind to the obvious. They end up blaming the stars for the disaster that befalls them. But it is often too late. Many fall by the wayside. The intelligent and the aware understand, adopt, adapt and flourish. You can’t beat technology. Nobody has been able to do so far.
We have witnessed technology changing our lives since the advent of mankind. We have also seen how it made our lives easier but, in the process, also ate up jobs and livelihoods. Let’s start with the invention of the wheel in ancient times. It adversely impacted the employability of trainers and attendants of horses and other draught animals like camels, elephants, oxen, and the like. Because an animal-powered cart fitted with wheels could carry more people and goods than what an animal could on its back.
Moving ahead we discovered automobiles, particularly tractors and farm machines. Out went most farm animals. Major dairies no longer employ traditional milkmen. Machines milk the cows more efficiently. And the poor bulls have also been rendered largely redundant as artificial insemination is spreading fast and wide. One can only sympathise with the bulls. They are now reduced to adding some buoyancy to the stock markets. But these bulls are not of the bovine kind; they belong to the human species. What a loss for the real bulls!
The list of technological inventions can go on ad infinitum. Where are the typewriters and typists crowding corporate offices till a decade or two ago? Secretaries of yore are gone too. They have been replaced by computer savvy personnel. The bribe-seeking landline phone technicians have become an extinct species as mobiles turn ubiquitous.
App-based taxi aggregators are driving out individual cab owners. Banks are cutting down their staff and propelling customers towards net banking. And talking of the internet, one wistfully remembers the once eagerly awaited postman. Where has he vanished?
Cutting a long story short, I would say that automation is taking over our lives. Rapid progress in the realm of artificial intelligence (AI) is changing the face of information technology (IT). With IT governing almost all facets of business in the developed, developing and underdeveloped parts of the planet, the impact of automation and AI on jobs needs to be considered with all seriousness and sincerity at our disposal. The issue can no longer be brushed under the carpet. The hungry wolf’s growl is audible.
It’s time we dealt with some hard data.
Labour costs are rising, even in China which grew exponentially so far on the back of labour arbitrage in manufacturing. To maintain and boost productivity, businesses are finding automation as the only way out. It is an existential conundrum.
Wu Ying, partner of Shanghai-based Grant Thornton, was recently quoted as saying, “China is facing a threat to its global manufacturing status. That will be a big challenge for China to tackle over the next five to 10 years.”
No wonder, China will very soon have more manufacturing robots than any other country in the world. After all, it has to compete with relatively low wage neighbours like Vietnam, Philippines, Thailand, etc. The government is offering special concessions to industrial units advancing towards automation. Side by side, China is also trying to produce more high value work which fetches better profit. But that could be a long haul for a country which has been used to capturing global market share through its cheaply priced products. This calls for business process automation (BPA). High value products need a far more matured R&D, innovation and original research lineage and large investment. Gestation periods are long. The West as also Japan is way ahead on that front. They are the real masters of technology intellectual property rights (IPRs).
However, it would be utterly misleading to suggest that BPA is only China’s quest. It has become a global trend. Grant Thornton’s International Business Report (IBR) based on a survey of more than 2,500 executives across 36 economies says that 56 per cent of firms are either automating processes or plan to do so over the next 12 months. Obviously some jobs will be lost mainly in the manufacturing, technology and food and beverage sectors.
Let me quote Steve Perkins, global leader for technology at Grant Thornton: “In this digital age, businesses are increasingly looking to technology. Post-financial crisis, firms continue to strive for greater efficiency and better productivity, and as businesses consider whether to invest in staff or machines, for many the latter is the more cost-effective solution.”
It would be foolhardy on our part to assume that this trend will not catch up with us in Nepal. We are part of a globalised world. Even to do business with the outside world we will have to go in for business process automation. We should also not forget that nearly 30 per cent of our gross domestic product comes from migrant remittances. Most Nepali migrant labour is engaged in the Gulf Cooperation Council (GCC) countries like Saudi Arabia, Qatar, Kuwait, etc. GCC is facing major economic downturn because of the plunge in the prices of petroleum products as also on account of internecine conflicts. In an unexpected move, Saudi Arabia is imposed taxes and withdrawn quite a few subsidies. Other GCC countries too are in the grip of financial crunch. Their uncertain future has become more acute with the USA starting export of crude on the back of its success in shale gas fracking.
One fears that all this will eventually compel GCC countries to opt for greater automation leading to loss of jobs for Nepalese and other migrant labour. The return of our young men from foreign shores will not only upset the domestic economy but will also cause a social upheaval. Add to that the inevitable automation of industries in Nepal over the years and we find ourselves sitting on a ticking bomb.
One is reminded of the bleak job scenario described in books like ‘Humans Need Not Apply’ by Stanford University academic Jerry Kaplan and ‘Rise of the Robots’ by Martin Ford, software entrepreneur and celebrated author. They foresee a jobless future.
But there is a ray of hope in the concept of ‘job polarisation’ enunciated by economists. In short, it means that automation will cause major loss in middle level skill jobs; low and high skill jobs will not be impacted that adversely. Nepalese may be able to save jobs for some time because most of them are low skilled. But will low skills sustainable wages? Will our GDP grow? Will Nepal get out of the poverty trap?
I don’t think our powers-that-be are even aware of the looming crisis. The government needs to wake up and join hands with the business sector to launch a skill development programme on war footing. Let us make it easier for workers and other employees to acquire skills that would enable them to switch jobs when the automation quake hits us.
Basant Chaudhary is a Poet, Writer, The Chairman of BLC and Basant Chaudhary Foundation. (firstname.lastname@example.org)