The main pillar of India’s strategy for sustainable growth is stimulation of economic activity that will not just increase gross domestic product, but will also produce incomes for masses through employment and entrepreneurship. This is the objective of the ‘Make in India’ and ‘Start-up India’ thrusts that Prime Minister Narendra Modi has put his weight behind.
India’s policymakers should be greatly concerned about the transformation of patterns of employment caused by rapid technological developments. ‘Industry 4.0’ was the theme this year at the annual meeting of business and government leaders in Davos. Both the United Nations Development Programme and the World Bank, in their annual global development reports, have focused on the impact that automation, in both manufacturing and services, is likely to have on jobs. Meanwhile, the International Labour Organization (ILO) is completing its flagship project to understand what technology is doing to the ‘future of work’.
Some dismiss those who worry about the impact of new technologies on jobs as Luddites. These persons remind others that ultimately the technologies feared by Luddites turned out to be beneficial overall. So will Industry 4.0, they assert. However, transitions are disruptive, and it is the pain of transitions that governments are expected to relieve.
Increasing inequalities within societies, along with Industry 4.0, is the other, even bigger theme in global policy discourse. Oxfam has released a report pointing out that, with a global trend towards increasing inequality since the 1980s, now only 62 people own as much wealth as the poorer half of the human population.
Inequality, technology and the need for jobs are three potent forces that are combining to shape economies and societies. Industry 4.0 is creating new forms of enterprises. It will require different patterns of skills. It will create further tensions between owners of capital (and with it, technology and machines) and workers. What strategies should governments follow to enable a smoother transition, in which more jobs are produced and inequalities are reduced while technologies are adopted?
This should be the principal question for the Indian government. It is not clear so far whether Make in India, Skill India and Start-Up India—the government’s flagship programmes—have factored in these challenges. It would not be a surprise if they have not. The conceptual architecture of these programmes is some years old. It is based on models of previous successes—of industrialization in China, skill development in Germany, start-ups in the US. Even those countries are waking up to new challenges of technology, inequality and jobs.
It behooves India’s leaders, who are determined to produceacche din (good times) for India’s 1.2 billion citizens, to put their policies to an intellectual test. ‘Scenarios’, formed by ‘systems thinking’, provide government and business leaders with intellectual technology to construct ‘wind tunnels’ to test their strategies.
Scenario planning enables description of plausible futures in which several strong forces will interact with each other. A scenario in which all work will be automated, which some proponents of Industry 4.0 envisage, is incomplete—and may not be possible. It does not explain who will pay for the products and services that will be produced by robots and other machines. What will people be doing? How will they get incomes to pay for products and services? If they cannot pay, who will pay? If people are out of work, how will their basic needs be provided for?
A good scenario puts different aspects of reality together. It will explain, in a plausible way, what people’s lives will be like, along with the pictures of automated factories, offices and transport vehicles that Industry 4.0 envisages. What will human beings be doing? In what forms of enterprises will they be engaged? How will they earn incomes? Sharp scenarios would suggest what institutions and policies should be developed to bring about harmony between technology and people, and within society too.
International projects to understand these issues, such as those being undertaken by the ILO, the World Bank and some consultants can provide the Indian government with questions and solutions to explore. However, India will have to develop its own scenarios. Different conditions in different societies will cause the forces to play out in different ways. Therefore, a global scenario will not be sharp enough to guide any country’s actions.
Moreover, good scenarios that lead to action require the participation of key stakeholders to both understand the many forces at play in the country and obtain their cooperation in the implementation of the strategies. A report prepared by experts, especially external ones, is unlikely to compel requisite action. Borrowing the very apt title of economist Dani Rodrick’s book, One Economics, Many Recipes, while problems and principles may be universal, many local cooks must work together to make a palatable broth for local tastes.
Many ingredients must be put together in a scenario. Several government ministries and thought leaders in business associations and trade unions and other stakeholders must be engaged together in a systematic process to develop scenarios and solutions for India. Scenario planning provides the process.
Action is required urgently. The prime minister is leading the way. However, actions must produce the right outcomes. Scenarios will enable the country’s leaders to put their policies through a wind-tunnel, to test their efficacy in the globally turbulent conditions through which India’s aspirations must fly.
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