Business Today

"We Will See Large Job Losses"

How serious is the impact of automation on human jobs? Which jobs will be affected first? How is the automation revolution different from the industrial revolution?
twitter-logo Rajeev Dubey   New Delhi     Print Edition: June 18, 2017
Photo: Nilotpal Baruah

How serious is the impact of automation on human jobs? Which jobs will be affected first? How is the automation revolution different from the industrial revolution? Business Today's Rajeev Dubey posed these and other such questions to Paul Raleigh, Global Leader, Growth and Advisory Services, Grant Thornton. Excerpts from the interview:

Q. Where all is automation hurting?

It's hurting people. It's going to hurt jobs. There are some big shocks coming which we can see. Automation will provide a shock. It will provide a shock to the middle class, the professional class, which were unscathed by the previous automation in manufacturing. The changes are going to go deeper, affect more people. The real challenge at the domestic level and at the corporate level is the new skill sets, moving people from older skills to newer skills. We've been hearing about automation ever since we started working. Are we working less? Are we doing anything less today? Technology has always managed to bring new opportunities, but they are going to be different opportunities. The big challenge for businesses is to move people from old opportunities to the new. In that transition, there will be some big shocks. That's the rise of nationalism and populism you see. People are nervous - what does this mean for me, for my family?

Do you see automation leading to large-scale shrinking of jobs?

I do think that we will see large job losses. Employment will shrink in certain industries. Automation will impact services in particular - legal, audit, tax. Anything that can be automated will be automated. In that way, it is a race to the bottom, and the bottom is a ROBOT. I believe there will be significant job losses. I think it will take longer to happen than is being predicted. It's more of an 8-10 year cycle.

Any sectors where the impact will be more?

This is where I see the future looks much better. When you look at the market as a population of individuals, as opposed to groups of people, the ability to use data to customise to deliver medical products or solutions around your DNA or my DNA is where I'm now looking at specific solutions for individuals. You can see how organisations can suddenly start targeting individuals. You will get your runners made specifically for your feet right in front of you. What you have now is people combining technology and existing manufacturing to make something specifically for you. To me that just cracks it open in terms of potential. The ability to provide one-on-one services and products actually multiplies, rather than decreases, the opportunities. Mass manufacturing goes away but job opportunities don't go away. I am excited by the concept of customisation.

If you look at the spread of automation, which are the sectors that are already impacted, which are the sectors that will be affected in the near term, and which ones in the long term?

We are already seeing some job losses in outsourcing services. That's as much politically driven as it is driven by technology. The factor that's common now in the equation is politics. So, outsourcing, bringing back jobs, localisation, will have an impact. It will impact business consulting. And there will be winners and losers. I was reading about Goldman Sachs, which is doubling its footprint in Bangalore because its centre here is a partner. It's not outsourced. It's not about low-cost delivery. If you have been positioned up the value chain, there's a likelihood that you will be a winner. If you haven't, the likelihood is, you will lose.

When the industrial revolution was happening, the fear was that humans won't be required in those jobs. Today more humans work in factories than ever. Is the automation revolution going to be vastly different from the industrial revolution in that sense? Then, it was machines alone. Here, it is machines and software together.

There is a viral reaction to many of the things. I was reading that when the telephone arrived, there was a viral reaction that this would stop the practice of people visiting friends. There was a movement against the telephone. Every time something new comes out, there is a viral reaction. We're seeing the same viral reaction with virtual reality. To some extent, there is this inherent reluctance to change. While there will be changes and there will be winners and losers, my belief is that there will be more winners. This would produce more opportunities. It has the potential to create a much better world for people to live in. Being able to provide individual solutions based on your DNA seems like a much better solution for me if I am sick, rather than a shot in the dark. It's like how you use technology. Do you use it to create arms or to develop new health solutions? Do you use it to create borders or help people collaborate?

Robots or software bots - which one has greater impact on humanity?

Both will happen. Robots will rely on software. Robots will take away blue collar jobs but bots will take away white collar jobs.

One of the things technology will allow us to do is collaboration and enable large organisations to use large data for customer intimacy. In the past, scale was associated with cost efficiencies and mass production. With technology and big data and ability to localise 3D printing, large corporates will be able to pick up some benefits of smaller organisations. It's a threat for smaller organisations. But technology also allows smaller organisations to achieve scale through collaborative models. When you look at the opportunities to do things differently that will come, automation looks less threatening.

@rajeevdubey

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