Automation may replace 69% of jobs in India, says World Bank study
05 October 2016
Increasing use of automation to replace manual jobs would cause large-scale unemployment is emerging economies like India and China, says a new World Bank study.
Technology would replace 69 per cent of manual jobs in India while it would cause job losses of up to 77 per cent in China as it fundamentally disrupts the pattern of traditional economic path in developing countries, according to the research.
"As we continue to encourage more investment in infrastructure to promote growth, we also have to think about the kinds of infrastructure that countries will need in the economy of the future. We all know that technology has and will continue to fundamentally reshape the world," World Bank President Jim Kim said.
"But the traditional economic path from increasing productivity of agriculture to light manufacturing and then to full-scale industrialisation may not be possible for all developing countries," Kim said in response to a question at the Brookings Institute during a discussion on extreme poverty yesterday.
"In large parts of Africa, it is likely that technology could fundamentally disrupt this pattern. Research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69 per cent, in China it is 77 per cent and in Ethiopia, the percentage of jobs threatened by automation is 85 per cent," he said.
"Now, if this is true, and if these countries are going to lose these many jobs, we then have to understand what paths to economic growth will be available for these countries and then adapt our approach to infrastructure accordingly," Kim said.
He said one child policy could have been reason for increased use of automation as also a sharp decline in child stunting and malnutrition, which is now at 10 per cent globally.
However, he said, despite demographic changes, India still is far away from reducing child stunting and malnutrition.
"The one child policy could have been part of it, but anyway the point is, that if you look at educational outcomes and things like child stunting, India is at 38.7 per cent child stunting, they are literally walking into the future with 40 per cent of their workforce probably being unable to compete in the global digital economy, whereas China over the years has brought it down very, very low," Kim said.
"In India, it is probably partly because of sanitation that children are often in a just constant diarrheal stage, because of open defecation. There is a lot of different pieces of it. But I have been saying to the leaders of these countries that have these high stunting rates, there is like an emergency for you, you have got to tackle it," Kim said.
''Mechanisation and technology have disrupted traditional industrial production, upended manual jobs and call time on the work that has been done by generations of families. This trend is not isolated to the US. It is affecting people in countries everywhere,'' Kim said.
"When I was in China at the G20, many world leaders talked about the storm clouds of isolationism and protectionism that were gathering and becoming increasingly worrisome to everybody. These trends come at a time though when we need more cooperation, when we need greater economic integration and stronger partnerships than ever before if we want the world economy to return to higher rates of inclusive, sustainable growth.
"Openness and partnership between countries have played a critical role in an unparalleled period of growth and poverty reduction. Since 1990, more than one billion people have escaped extreme poverty," Kim said.
He said while countries like China have made great strides toward ending extreme poverty as a result of trade and openness of their domestic industries to global competition, lasting progress and inclusive growth could only be achieved by working together and especially trading together.
"So in the end, we have made progress. But at the same time, in most of the world, we are facing very strong headwinds, a slowing global economy hit by falling commodity prices and stagnating global trade. That is really historic," he added.