AI must be restricted to some specialised fields

A paradigm shift is in the offing in the economic relationship between labour and capital with the advent and application of Artificial Intelligence (AI) in recent years. The economy of the future will increasingly depend on AI as it is accepted as a new factor of production. Researchers say that AI has the potential to introduce new sources of growth, changing the pattern of work performed and reinforcing and reorienting the role of workers in the economy.

This unprecedented challenge afflicts economies experiencing a revolution in information and communication technology (ICT) and biotechnology (BT), or more precisely, the convergence of biotechnology, artificial intelligence and the computer chip. The main advantage of AI is that labour productivity can rise by 40% and it will prepare people for efficient use of time.

The advancement of the technology is rapidly transforming industrial production and distribution, causing what’s called the fourth industrial revolution, but its potential negative impact on the economy hasn’t been accounted for yet. AI endeavours to create machines with intelligence on par with humans, and capitalists prefer to employ AI, propagating a policy of profit-making at the cost of labour. This seems to be a gigantic conspiracy of capitalists against the labour class, one that will create a vastly unequal world, setting up a class clash.

Capitalists desire to have labour-free factories churning out profits, believing that they can benefit at the expense of labour. Therefore, labour is treated as redundant with the advent of robotics, AI and automation. A merciless mass layoff of workers is in the offing that will serve to preserve economic power in the hands of a few.

This phenomenon is not new, Schumpeter predicted that the economy of the future would depend on technological advancement and innovation. But, probably, he never thought machines would replace men. Microsoft founder and billionaire Bill Gates seemed to opposed the pace at which automation is moving and has suggested imposing tax on robots, just like on humans.

The pace of advancement of AI is rapid. China has already built Asia’s first fully automated port, the Qingdao Port (Ghost Port), where there are no workers. Robots manage the port, including loading and unloading cargo. Recently, Bengaluru International Airport put into use a robot called Kempa to assist people with flight-related queries. Of course, no doubt AI is being promoted in India, too, to take the country forward in science and technology. But overriding importance has to be given to both creating new jobs and preventing the loss of existing ones. AI should be prioritised for use in risky sectors like defence, healthcare, mining and space, rather than across the economy.

The Centre allocated Rs 3,073 crore in the recent budget for the development of AI, machine learning and robotics under the Digital India programme. The economic growth of the country is influenced by the rate of new innovations it produces, and innovations result from the level of investment in research and development (R&D).

Investment in R&D in India is a minuscule 0.62% of GDP, whereas America and China spend 2.79% and 2.06% of their much larger GDP; Israel spends 4.26% of its GDP, Japan 3.28% and South Korea 4.22%. The Indian private sector investment in R&D is miserably low, and many businesses are content earning monopoly rents. This has cast a shadow on the India’s ability to exploit its demographic dividend and resulted in jobless growth.

India also lags in skill development and employability of educated youth. Skill development by itself is useless, unless those skilled can be employed immediately. There is no official data on how many people obtain jobs after skill development. The potential growth sectors for job creation are predominantly agriculture (47%) and industrial sectors (22%), which have become stagnant and sterile. The services sector creates about 31% of the jobs for the educated youth, but this is the sector that primarily faces the challenge posed by the advent of AI in the fields of financial services, aviation, education, music, communication, news and publishing, marketing, transportation, engineering and architecture, which has the potential to cause massive job losses. Estimates suggest that 400-800 million workers will be forcefully displaced by the diversified application of AI worldwide.

Commanding heights

The downsizing of public investment in important sectors of the economy and disinvestment in the public sector has caused serious extinction and scaling down of jobs. India’s jobless growth is cause for serious concern for the youth. The ‘commanding heights’ of the Indian economy still bank on public-sector undertakings (PSU). The aggressive disinvestment policy of the Narendra Modi government is therefore a serious cause for loss of jobs. Meanwhile, the highly-leveraged and distressed private sector is not only not able to create jobs, it is also laying off people.

The global financial crisis exposed the inherent weakness of the corporate sector in a largely capitalist world economy and the relevance of the economic ideas of John Maynard Keynes. Therefore, the efficient management of PSUs can ensure constant creation of jobs and help the economy of the future by creating effective demand.

The strength of the Indian economy will come from a healthy promotion of both public and private sectors. Doing so will help the economy prosper, with long-lasting effects on job creation and equitable growth. Modern society needs AI and robots in specialised fields, but they should not be allowed to encompass all facets of human life. Doing so will destroy the labour market and billions of jobs.

(The writer is a professor with the Centre for Economic Studies and Policy, Institute for Social and Economic Change)