At the end of a daily-newspaper reading routine, one would most certainly come across one to two articles on the ominous rise of artificial intelligence (AI). Most of these articles regard AI with a sense of foreboding, in a fashion analogous to The Luddite movement in 19th century England. The extent of this acute apprehension regarding robots replacing human workers has been accurately illustrated through one of the Dailywatch films, a series of short films by The Economist magazine. In this documentary, The Economist sets out to ask various people to conjecture about the percentage of total jobs that are held by robots and the answers range between 10 to 30 per cent. However, the actual answer is 0.7%. In the context of India, many articles talk about the need for an overhaul of the education system, re-training of the existing workforce and a renewed nationwide skill development plan which will be better suited for an AI-powered future. These concerns are warranted, given the permeating and conspicuous rise of AI in all structures of our society. But what is artificial intelligence and why do some envision a dystopian future with its advancement?

A still from the movie, Her, when Theodore thinks he has lost his beloved artificially intelligent OS

In an AI-powered backdrop, machines will be trained to mimic human intelligence. The cause of fear over the possibility of this stark reality is that machines will transcend all that we know of human intelligence today. This can be demonstrated with the recent win of AlphaGo (a computer program developed by Google-acquired AI company, DeepMind) over a human being in the complex and ancient Chinese game of Go.  The AI revolution can be viewed as a kind of creative destruction which has the potential to destroy some jobs as well as create new ones. In an Oscar winning AI themed futuristic film, Her (2013), the story revolves around the protagonist, Theodore Twombly who falls in love with his artificially intelligent OS (Operating System). Twombly works for Beautiful Handwritten Letters, a company which employs professional writers to compose personal letters for those people who for some reason are unable to write such letters themselves. Twombly’s work profile may seem strange but it surely requires some skill, to be able to write letters as someone else and make them believable enough for the person receiving them. The protagonist’s job in this movie illustrates the kind of inevitable disruption in employment, positive or negative, that will be caused with the dawn of AI. Hence, instead of treating the onset of AI as a harbinger for doom for the human civilization, we must embrace it.

With India boasting of a massive demographic dividend at 64.4% of the population (as reported by Sample Registration Survey of India statistical report in 2015), we ought to be poised to tackle the AI driven technological change. Among the numerous studies and articles broadcasting details of potential job losses in India, very few of them have a positive outlook for India’s already deteriorating labour market conditions. A World Bank research states that 69 per cent of the jobs in India are under threat from automation. As reported by HfS Research, a research firm in the US, around 7 lakh low skilled workers, mainly in the Indian IT and BPO industries are set to lose jobs to AI by 2022. According to a HR Technology Solutions firm, PeopleStrong, four out of every ten jobs that will be lost to AI on a global scale are reckoned to be in India. On the other hand, we have the likes of Nivrut Rai, Country Head for Intel India, who does not believe that jobs will be lost to AI but instead aims to create new and different kinds in the future.

Considering the widespread adoption of AI driven technology in countries like China, South Korea, Japan and US, it seems like India is falling behind. There are various reasons that can be attributed for the same. Even today, in numerous industries labour costs are cheaper which leads to there being no incentive to automate processes. This further leads to lower productivity which for instance, is something that I encountered in various administrative departments of schools and universities (heaps and heaps of paperwork on the desks of clerks who take 2-3 working days to get your work done). The administrative processes can be automated to make workers more efficient and productive, for which the staff would have to be re-trained to hone the required skills. However, this does not seem feasible considering the time, willingness of the workers and additional funds it will require. Just like we’ve learnt in our foundation Macroeconomics lectures at MDAE, output in an economy depends on capital and labour, accompanied with technological progress which further leads to increase in total factor productivity which is crucial for an economy’s growth.  Sooner or later, automation and technological advancement in the form of AI must be incorporated if we wish to grow as an economy.

As for labour costs being cheaper, what happens when that is no more the case? Mahindra & Mahindra Ltd., a car and farm equipment manufacturing company announced the launch of India’s first driverless tractor in 2018. This is a major step towards the mechanization of a labour-intensive agriculture sector found in India. The driverless tractor is not only set to cut labour costs but is being priced 20% lower than a non-mechanized one, as claimed by the company. With this kind of technology requiring no human intervention, jobs of many drivers that make up the rural economy are bound to be lost. As mentioned in another one of our blogs on Thomas Sargent’s graduation speech, one of his crucial economics concepts state that “There are trade-offs between equality and efficiency”.

It is mostly the private sector, particularly the IT sector and several start-ups in India that are investing in AI related research and re-training of workers. As seen with Infosys and its support of AI research at Indraprastha Institute of Information Technology, Delhi in addition to its own artificially intelligent platform, Nia. There are accounts of companies training their workers, for instance, Intel India in collaboration with forty academic institutions and fifty organizations both in public as well as private sectors, is said to have trained 9500 developers, students and professors. Even with Infosys having finished training around 3,000 people in AI and 2100 on its AI platform, Nia. However, for any new initiative and that too as consequential as this to be introduced in an economy, initial support and investment must come from the government. The demographic dividend of India should move towards harnessing the opportunities that are presenting itself with AI driven technologies. Taking the Kenyan government’s efforts as a representative case, a Kenya Vision 2030 programme termed as the Digital Literacy Programme (DLP) was introduced in 2016 and an inter-ministerial initiative of a five-week training session aimed at training youths to engage in online work has been set in motion in 2017. Many of the Indian government’s initiatives like Skill India and Digital India need to be revamped to re-train economic participants with skills which will be valued by employers in the future.

Meanwhile, let you and I continue practising the R codes that are being taught in class…


This article has been written by Guntaas Uppal (New Product Group/Risk Management Solutions, Dun & Bradstreet India) also an alumna at the Meghnad Desai Academy of Economics.