India tops in adopting automation in operations, practices: survey

25 Jun 2015


India has ranked No 1 in its outlook to adopt automated processes; 83 per cent of Indian companies surveyed told Grant Thornton that they are either already automating business practices or may do over the next 12 months.

These companies are switching to automation to lower costs and have greater accuracy and increased flexibility to increase or decrease production.

Mexico and Ireland ranked No 2 and No 3 respectively showing great signs of approving automation for day to day operations. In China 59 per cent of firms are planning to utilise automated processes to perform tasks previously done by people.

Globally, over half (56 per cent) of firms surveyed are planning to switch to automation. By industry, 43 per cent of manufacturing firms said they expect this to eventually replace at least 5 per cent of their workforce.
The cleantech sector was in second place with 39 per cent, followed by the technology and food and beverage sectors at 35 per cent.

At the other end of the spectrum, just 9 per cent of hospitality, education and healthcare firms expect 5 per cent or more of workers to be replaced.

''Given the population size and the underlying economy growth drivers for India, automation and digitisation would probably be one of the key drivers to future growth, " said Raja Lahiri, partner, Grant Thornton India LLP.  "Further, accentuated by the sizeable young population, internet is established itself as the key platforms of doing business and social interactions which is underpinned by the drastic shift of the consumer behavior patterns to transact on the internet.  India's focus on ''Make in India'' as well as ''digitization'' would be achieved with embracing automation and outlook for India remains positive in this respect.  Off-course, this would mean re-skilling of work-force and thought processes to achieve India's growth ambitions.''

Grant Thornton's findings also suggest that opportunities will arise for workers to assume new roles and responsibilities created by an increased use of technology. Globally over half of automating firms (54 per cent) expect to redeploy workers in other areas, with 28 per cent saying that workers will be trained to operate new machinery.

Even in manufacturing, 44 per cent of firms plan to redeploy rather than remove staff. In India, 26 per cent of the firms said 5 per cent of their workforce would eventually be replaced by automation.

Steven Perkins, global leader for technology at Grant Thornton, said, ''The roles reserved for humans could look very different years from now. Some will feel the effects more sharply. Driverless cars could render taxi drivers unnecessary, while Yahoo Finance recently announced its newsroom would be going fully automated, removing the need for human journalists. The taxi drivers and journalists of today could be the quality control analysts or machine servicing staff of the future. Automation in the first industrial revolution made us stronger, automation the second made us faster, and in the third we will have tremendously greater insights. The possibilities are enormous.

''History has proven that workforces are resilient and adaptable but the rise of intelligent machines, analytics and an ubiquitous 'internet of things' pose significant opportunities and challenges. No sector or profession is immune. Increased dialogue between governments, businesses and education institutions will help us better understand where gaps in the labour market will exist, to ensure we have a pipeline of people being educated and trained to fill those roles.'' 

The survey reveals that Indian companies are willing to try a combination of buying and renting the machines or technologies for automating processes. As per the report, 43cper cent Indian companies would like to buy the machine while 49 per cent would like to try a combination of rent and buy. Further research conducted by Grant Thornton uncovered increasing business spend on research and development – underpinning the growth in automation.

In 2011, 23 per cent of businesses globally said they were planning to boost R&D spend; that increased to 26 per cent in 2014 and so far in 2015 it stands at a five-year high of 29 per cent.

Fifty years on from the world's first personal computer going into mass production, the Grant Thornton International Business Report, a survey of 2,571 executives in 36 countries, reveals the scale of technology's influence on business with the majority of firms now planning to automate operations and practices.

The findings suggest that some jobs will go as a result, with the manufacturing, cleantech and food and beverage sectors in particular reporting upheaval. With capital costs low as labour costs rise, the findings pose fundamental questions about the extent to which machines will eventually replace humans.


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