The presentation addresses the issue of changing nature of work in the context of technological advancements, Industry 4.0, AI, ML and VUCA world.

1. Prof. (Dr.) SK Breja
JIMS Kalkaji, New Delhi
skbreja2006@yahoo.co.in

2. Industry 1.0
Mechanization,
water power,
steam power
Industry 2.0
Mass
production,
assembly line,
electricity
Industry 3.0
Computers
and
automation
Industry 4.0
Cyber physical
systems, IoT,
machine
learning

4. Complexity
Multiple key
decision factors
Volatility
Rate of change
Ambiguity
Lack of clarity about
meaning of an event
Uncertainty
Lack of clarity about
the present

5.  Artificial Intelligence (AI) is transforming the
functional, operational, and strategic landscape of
various business domains.
 IA is a field of Data Science that trains computers
to learn from experience, adjust to inputs, and
perform tasks of certain cognitive levels.
 Most AI technologies – from advanced
recommendation engines to self-driving cars – rely
on diverse deep learning models.
 AI professionals utilize these complex models and
train computers to accomplish specific tasks by
recognizing patterns in the data.

6.  What is amazing is that we need only a broadband
connection for exchange of goods and services on
online platforms.
 This “scale without mass” provides economic
opportunity to millions of people who have been
bereft of the benefits of industrialization.
 The rise of platform marketplaces allows the effects
of technology to reach more people, faster.
 Applications are not limited to e-commerce,
tourism and education and now we have what is
called gig economy (short-term engagements and
contracts).

7.  The Indian Artificial Intelligence market is valued at $6.4
Bn as of July – August 2020.
 The market size by Industries or Sectors is highest for:
◦ IT Services sector (41.1%),
◦ Technology sector (23.3%) which includes Software and
Hardware firms.
 NITI Aayog, Nasscom, Educational Institutions, the Indian
IT firms, and various Technology & Engineering
enterprises are transforming India into a hub of AI
research and development.
 The AI market is expected to be more than the forecasted
level of $11.4 Bn by 2025.

8.  It is believed that the technology will benefit
workplace, society and improve quality of life.
 However, there are concerns about the future of
employment.
 The threat to jobs from technology is
exaggerated. We have experienced this situation
through Industry 1.0 to 3.0.
 However, worldwide many experts hold a view
that rising inequality, and the advent of the gig
economy, is leading to fall in working conditions.

9.  Digital technologies and New business models—
digital platform firms—are evolving from local
start-ups to global giants.
 These organizations often have few employees or
tangible assets.
 This new industrial organization poses policy
questions in the areas of privacy, competition,
and taxation.
 The ability of governments to raise revenues is
curtailed by the virtual nature of productive
assets.

10.  It is true that manufacturing jobs
are being lost to automation in
advanced countries.
 Tasks which are “codifiable” are
the most vulnerable and workers
performing these tasks are
vulnerable.
 But, technology provides opportunities to create new jobs,
increase productivity, and deliver effective public services.
 Technological innovation generates new sectors and new
tasks.

11.  The foundations of human capital, created in early
childhood, are important.
 Governments in developing countries have to give
priority to early childhood development, and create
human capital.
 In many developing countries a large number of
workers remain in low-productivity jobs, often in
informal sector firms with low access to technology.
 The share of informal workers is as high as 90
percent in some emerging economies.
 Informality has remained high over the last two
decades despite improvements in the business
regulatory environment.

13.  India has a large informal sector. Rural folk
migrate to cities in search of jobs.
 India has seen GDP contraction of 23.9% during
April-June 2020 and 7.5% during July-September
2020 in the formal sector.
 The country witnessed large scale exodus from
the cities.
 The suffering caused to the labour meant they
had no savings, no housing, no access to
healthcare and probably no access to the welfare
schemes run by the government of India for all
these years of their employment.

14.  Boundaries: Technology is blurring the boundaries
of the firm.
 Scalability: Compared with traditional companies,
digital platforms scale up faster and at lower cost.
 Effect on Economy: Technology is changing how
people work, giving rise to the gig economy in
which organizations contract with independent
workers for short-term engagements.
 Effect on Production processes: Technology is
disrupting production processes by challenging the
traditional boundaries of firms, expanding global
value chains, and changing the geography of jobs.

15.  Effect on Skill Requirements: Technology is
reshaping the skills needed for work. The
demand for routine job-specific skills and less
advanced skills, that can be replaced by
technology, is declining.
 Requirement for Advanced Skills: The demand
for advanced cognitive skills, sociobehavioral
skills, and skill combinations associated with
greater adaptability is increasing in both
advanced and emerging economies.

16.  Premium on High-order Skills: Automation raises
the premium on high-order cognitive skills in
advanced and emerging economies.
 Investment in Human Capital: Investing in human
capital is the priority during these times.
 Skill Types: Three types of skills are increasingly
important in labor markets:
◦ Advanced cognitive skills such as complex problem-
solving,
◦ sociobehavioral skills such as teamwork, and
◦ skill combinations that are predictive of adaptability
such as reasoning and self-efficacy.

17. Advanced
cognitive skills
Sociobehavioral
skills
Skill
combinations

18.  Changing nature of work necessitates
investments in human capital by people,
firms, and governments.
 A basic level of human capital, such as
literacy and numeracy, is needed for
economic survival.
 The role of human capital is enhanced
because of the rising demand for
sociobehavioral skills.

19.  Jobs that rely on human
expertise and
interpersonal interaction,
like education sector,
cannot be readily replaced
by machines. Technology
is a facilitator only in
these cases.
 However, to succeed at all types of jobs in the new
environment, sociobehavioral skills—acquired in
one’s early years and shaped throughout one’s
lifetime—must be strong.

21.  Investment in Human capital: Investing in human
capital, particularly early childhood education, to
develop high-order cognitive and sociobehavioral
skills in addition to foundational skills.
 Enhancing social protection: A solid guaranteed
social minimum and strengthened social
insurance, complemented by reforms in labor
market rules in some emerging economies,
would achieve this goal.
 Creating fiscal space: Governments can optimize
their taxation policy and improve tax
administration to increase revenue without
resorting to tax rate increases.

22.  A societal minimum: A minimum that provides
support independent of employment and is
targeted at the neediest is a good option option.
 Universal Basic Income: A universal basic income
is another option. However, this option is still
being debated and costly.
 Social Assistance and Insurance: This would
reduce the burden of risk management on labor
regulation. This can be made more balanced to
facilitate movement between jobs.

23.  The only way to continue operations for informal
enterprises is the access to liquidity. This is
possible by availing the economic stimulus
package.
 However, to avail the benefits of these schemes,
these enterprises will have to get registered.
 This will bring in more of the unorganised sector
in the formal fold.

24.  The formalisation of the
informal sector would help
building an accurate
database of the informal
workers and ensure
success of direct Benefit
Transfer scheme.
 Database would help informal workers to get access to
various government welfare schemes in the long run.
 Formalisation would increase the government’s
revenues from indirect taxes in the long-run.

25.  Lockdown Impact: Lockdown severely impacted the
informal sector in the initial days during April-June
2020. There was no money in the hands of the small
enterprises to continue their operations.
 Stimulus: Government initially announced stimulus
package of 20 lakh crore in 5 tranches from 12th to
16th May 2020, and then another Rs. 2.65 lakh crore
on 12th November 2020 under ‘Aatmanirbhar Bharat’.
 Limitation: However, the absence of a comprehensive
database has been the chief limitation of the benefits
from the package.
 Opportunity: Pandemic has offered the government
the opportunity to formalise the informal sector.

26.  Technological advances are now accelerating the
growth of firms in health and education and the
productivity of future workers.
 Creating formal jobs should be the first-best policy.
 High-skills and reskilling are required for the
workforce today.
 Investments are needed in IT, road, port, and
municipal infrastructure.
 Adjusting to the next wave of jobs requires social
protection.

27.  The task to formalise the informal sector is formidable,
especially during the pandemic.
 Formalisation will extract cost from the most vulnerable
of the informal firms and the workers.
 Previous attempts, like GST and demonetization, of the
government at formalisation have not been very
successful.
 March towards formalisation may well lead to large
scale unemployment and, therefore, contraction in
demand.
 However, the switch to formalisation will result in larger
tax base for the government and enhance productivity.
skbreja2006@yahoo.co.in
Thank You.