London : The rise of automation has so far had a negligible impact on jobs at a global scale, the World Bank chief economist said, despite common gloomy predictions that humans are set to be replaced by machines.
While advanced economies have shed industrial jobs over the last two decades, the rise of the same sector in East Asia has more than compensated for the loss, according to an annual report published by the Washington-based international financial institution.
“This fear that robots have eliminated jobs — this fear is not supported by the evidence so far,” the World Bank’s Chief Economist Pinelopi Koujianou Goldberg said in an interview.
The World Development Report 2019 is the latest in a series of efforts by academics, consultancies and governments to assess the impact of new technologies on employment. Past studies have often forecast automation will destroy more jobs than it creates.
In its report, the World Bank instead stresses that the nature of work in the future will evolve. While technological advances in automation are starting to handle thousands of routine tasks and will eliminate many low-skill jobs in advanced economies and developing countries, it’s also creating opportunities for different, more productive and more creative jobs.
“This is the fourth industrial revolution, there have been three before, and in each case we managed to survive so it’s not the case that machines completely eliminated humans,’ Koujianou Goldberg said. “Eventually, we will adjust.”
While the effects have been negligible on a global scale, the report said the share of industrial employment dropped more than 10 percentage points over the past two decades in countries including the U.K., Spain and Singapore, as workers shifted from manufacturing to service jobs. Meanwhile, the share went up in some developing countries, such as Vietnam, where it rose from 9 percent in 1991 to 25 percent in 2017.
In the future, workers are more likely to have many jobs over the course of their careers, largely due to the rise of the gig economy, instead of holding down a position with the same employer for decades, according to the World Bank.
And different skills will be increasingly important, the report says. Instead of less advanced skills that can be replaced by technology, employers will increasingly be looking to hire people with advanced cognitive skills, like complex problem-solving, teamwork, reasoning and communication talents.
To ease that transition, governments should guarantee a universal minimum level of social protection, the World Bank said. One option could involve offering insurance independent of employment since future workers will likely flit from one job to the next.
One major area of concern for the World Bank is the impact the technological shifts will have on developing countries in Africa and elsewhere hoping to catch up to more advanced peers.
In the past, these regions could rely on growing their economies by taking advantage of low wages in their own country and opening up to foreign trade. But salaries are less relevant if machines replace more people, which could hinder the countries’ efforts to catch up, Koujianou Goldberg said.
Govt should ease law on firing workers, reform labour laws: Panagariya
Mumbai: India should ease norms for hiring and firing workers to make it easier for companies to do business in the country, according to a former adviser to Prime Minister Narendra Modi’s government.
Easing the rules are crucial for employers, as their primary aim is not to fire workers, Arvind Panagariya, the head of government think-tank NITI Aayog, said in an interview in New Delhi. “You need consistency across labour laws.”
Finance Minister Nirmala Sitharaman, in her maiden budget this month, proposed combining multiple laws governing workers to form four sets of labor codes to improve the ease of doing business. But what’s needed is the reform of labor laws and not just streamlining of existing ones, said Panagariya.
He said the government’s plan to introduce a single minimum wage across the country may hurt businesses in smaller towns considering the wide differences in costs across urban and rural India. It could especially hurt small exporters and erode their competitiveness globally.
Modi’s government, which was re-elected for a second straight five year term in May, can do more to help grow the economy, Panagariya said, adding that some of India’s labor laws are probably more than 100 years old. Almost all of them are more than 30 years old.
Ban cryptocurrencies, consider launching own digital money: Panel to govt
New Delhi: A panel tasked with examining virtual currencies has recommended that the government should ban private cryptocurrencies and could consider launching its own digital money. It has also recommended that to deter the use of private cryptocurrencies, anyone doing so could be punished with imprisonment of up to 10 years.
The committee on virtual currency is headed by Finance Secretary Subhash Garg. The other members are Ajay Prakash Sawhney, secretary, Ministry of Electronics and Information Technology; Ajay Tyagi, chairman, Securities and Exchange Board of India (Sebi); and B P Kanungo, deputy governor, Reserve Bank of India (RBI).
The committee submitted its report — after a delay of a year. A piece of draft legislation, Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019, was also put in the public domain.
The Supreme Court is slated to hear a challenge to a ban on cryptocurrencies by the central government and the Reserve Bank of India.
In its report, the committee has recommended that distributed ledger technology (DLT), the most common use of which is blockchain, can be of great benefit to the country in several financial and non-financial areas, such lowering costs of the Know Your Customer process and improving access to credit.
Ban cryptocurrencies, consider launching own digital money: Panel to govt “There is no underlying intrinsic value of private cryptocurrencies. These… lack all the attributes of a currency. There is no fixed nominal value of these private cryptocurrencies. They neither act as any store of value nor they are a medium of exchange,” the panel said in its report, noting that since their inception, cryptocurrencies had demonstrated extreme fluctuations in their prices.
The draft Bill states: “Whoever directly or indirectly mines, generates, holds, sells, deals in, transfers, disposes of or issues cryptocurrency or any combination thereof… shall be punishable with fine or with imprisonment which shall not be less than one year but which may extend up to ten years, or both.”
The panel said policymakers and regulators should have an open mind regarding the introduction of an official digital currency in India. “It may be possible to visualise some models of future official digital currencies but as of date it is unclear whether there is clear advantage in the context of India to come up with an official digital currency.”
The panel also recommended if required, a group can be constituted by the finance ministry’s department of economic affairs, with participation of the representatives of the Reserve Bank of India (RBI), the Ministry of Electronics and Information Technology (MeiTY), and the department of financial services for examination and development of an appropriate model of digital currency in India. If one is launched, the RBI should regulate it.Technology experts, however, were not very happy with the recommendations of the panel.
“The definition of cryptocurrency in the report is reasonably vague and may not cover something like Facebook’s libra or even bitcoin if one were to read it too technically. The drafting needs to be better,” said a lawyer who did not want to be named.Experts said it might be possible to develop a distributed ledger with nodes kept only in India.
“As a venture capitalist, I find… the suggestion of a ban quite disappointing because they did not engage with start-ups or domain experts,” said Nitin Sharma, technology investor and founder, Incrypt Blockchain.
Maruti, Hyundai skip rural slump, manage to increase sales in FY19
Chennai: The country’s largest two carmakers, Maruti and Hyundai, managed to increase their rural sales in 2018-19. This took place despite the rural economy being under pressure.
Both companies are optimistic about 2019-20, too, with the raising of rural allocations in the Union Budget and higher Minimum Support Prices. That means more of rural disposable income.
Maruti Suzuki’s (the country’s largest car maker) rural sales in 2018-19 rose to 205,000 units or 39 per cent of sales. A year before, it was around 165,000 units or 37 per cent of sales. This year’s outcome will depend on the monsoon, farm output and how rural sales pick up.
Hyundai’s rural sales were 17.3 per cent of its FY19 total, as against 15.6 per cent a year before. In FY20, the contribution is expected to be around 20 per cent.
Both companies — they address most of the spectrum — have said they are optimistic on the future, despite the overall industry having slowed. According to the Federation of Automobile Dealers Associations, passenger vehicle sales dropped by 4.6 per cent in FY19, to 224,755 units.
Shashank Srivastava, executive director for marketing and sales at Maruti, estimates growth of 4-8 per cent for the current financial year. However, he adds, a good monsoon and a satisfactory (for sales) festival season would be important, he adds.
With car penetration of around 22 per 1,000 population, India continues to be a big opportunity to sell cars, especially in rural areas. Srivastava says the rate of growth in the rural market has invariably been higher in recent years.
“Today, with booming internet users and a strong millennial population, rural markets are emerging as growth engines for sales,” he says.
Further, rural infrastructure has improved significantly. Motorability has seen sharp improvement there, resulting in exponential increase of two-wheeler sales and offering similar potential for cars.
Vikas Jain, national sales head at Hyundai Motor India, says customers of urban and rural markets might have differing needs but similar aspirations. In the latter, owning a car is a big aspiration.
Urban markets are experimenting with mobility solutions such as subscription and leasing. Hyundai has a partnership with self-drive car rental firm Revv and another with mobility solutions firm ALD Automotive India.
The company believes there is huge aspiration among youth in tier-1 and tier-II cities to own a vehicle. Rising disposable income and the expanding presence of financial institutions in rural markets, to offer credit at attractive rates, will enable ownership of cars.