Effects Of Automation And Decreasing Job Opportunities

Job losses and lack of jobs is very common and a cause of concern these days.One of the major cause of these effects are automation.Various reports of multilateral agencies also shows that automation has a major effect on jobs recent days and also cautioned the developed countries,including India, to take appropriate policy measures to minimize the adverse effects of automation on job opportunities.

It is against this scenery,and important to know what is automation, positive and negative impacts of automation and possible solutions before the government.

About Automation

As per the International Studies Association (ISA),automation is defined as the creation and application of technology to control and monitor the production and delivery of products and services.Automation is spread across different parts of the economy such as manufacturing, transportation,utilities,defense,services,etc.

Introduction of  driverless metros,news of layoffs in big IT companies like cognizant,tech mahindra and Infosys due to automation are the threat to employment opportunities from information and technology.

Besides all these everything has some positive and negative impacts on the society and culture but we have to balance between all these things.

Positive Impact Of Automation On Jobs

The following are some of the positive impacts of automation on creation of jobs in the country.

• A company which resorts to automation offers goods and services at lower costs than traditional providers. The reduced cost results in more savings by individuals and companies. The increased savings will be utilized as capital by the industry, which will lead to the creation of more jobs.

• Automation raises the efficiency and productivity. This principle applies to public, private and non-profit sectors alike. The better socio-economic infrastructure always attract more investment, production and more employment opportunities.

• Under normal circumstances, automation takes place to reduce costs by a firm. Reduction in costs leads to more profits. Increase in profits ensures more funds for innovation and research by companies, which in turn lead to the development of new technologies and consequently, more jobs.

• Automation reduces bureaucratic discretion and reduces opportunities for petty corruption in patronage-based systems. Reduction in corruption leads to improved ease of doing business conditions, which will further lead to more investments and more job opportunities.

Despite the above mentioned positive impacts, automation is not without its share of criticisms. The following are some of the adverse impacts of automation on creation of jobs in the country.

• The major criticism against automation of processes is lay offs. This is more so in the lower and middle-level due to the low skill set required and less human-to-human interaction of employees. Besides loosing an existing job, automation also creates challenges for individuals in the transition to new jobs, especially when the skill needs of new jobs are different from those of the old jobs.

• As per the World Bank’s report, automation leads to an emergence of new forms of jobs such as mircowork, which are the  jobs in the on-demand economy. These new forms of jobs are freelancing in nature and leads to erosion of workers’ bargaining power and a lack of benefits such as health, insurance, etc.

Way Forward

As per the World Bank Group’s report, two-thirds of all jobs could be susceptible to automation in developing countries in coming decades. However, barriers to technology adoption, lower wages, and a higher prevalence of jobs based on manual dexterity in India mean that automation is likely to be slower and less widespread compared to other countries.

The major challenge before the India is to find jobs for its working-age population which is forecast to increase from the present 740 million to 1.3 billion by 2050. On the other hand, job creation is not expected to rise to 18 million by 2018.

It is against this backdrop, the following steps need to be taken to minimize the adverse impacts of automation on employment opportunities.

• Skill upgradation : The union government has launched various programmes to skill the youth under the Skill India campaign. The programmes should include not only the illiterate youth, but also those who lost jobs due to automation.

• Flexible-labour laws: Apart from the skill upgradation, the labour laws should be made flexible to facilitate an employee’s transition from one job to another job is smooth. Adequate social support systems should be put in place to support workers while they are between jobs or not working regularly.

• Focus on SMEs: As per an estimate, an investment of around 1.5 lakh rupees is needed to create one job in small and cottage industries, whereas an investment of around 6 lakh rupees are required to create one job in capital intensive heavy industries. Hence, the immediate focus should be on the development of small and medium enterprises as heavy industries based on automation cannot be driver of employment. Thus, labour-intensive infrastructure sectors such as roads and railways and cottage industries should be developed.

• Need for employee protection: The World Bank Group suggested that it would be better to strengthen workers’ protection independently from work contracts by de-linking social insurance from employment, offering independent social assistance, and helping workers retrain and find new employment quickly.


The Indian economy is in transition. Recent initiatives like demonetization and Goods and Services Tax (GST) are yet to deliver the results. Besides, the technological advancements are pre-conditions to sustain high growth levels in the economy. Whenever a new technology is integrated into economic processes, it is quite natural that it leads to anxieties about job losses. However, the present trend of automation is a cause of worry due to its impact on even white-collar jobs. Since unemployment is a socio-economic problem, the government, especially the NITI Aayog, should dwell into the issue and come up with a right mix of solution keeping in view the varied interests of the economy as a whole.

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