In 1952 , American technocrat / visionary , John Diebold
wrote a book titled :
AUTOMATION
Since then , it has remained some kind of a "
Bible " for enthusiasts of automation ( - that includes , me ! )
Fast forward to 2016 ( 64 years later )
A few days back , here is what the World Bank President
, Jim Yong
Kim said ;
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" In large
parts of Africa , it is likely that technology could fundamentally disrupt this
pattern .
Research based on World Bank data has predicted that
the proportion of jobs threatened in India by
automation is 69 %
, in China it is 77 % and in Ethiopia the percentage of jobs threatened
by automation is 85 %
Now , if this is true , and if these countries are
going to lose those many jobs , we have to understand what paths to economic
growth will be available for these countries and then adapt our approach to
infrastructure accordingly
Mechanization and technology have disrupted traditional industrial production,
upended manual jobs and call time on the work that has been done by generations
of families
This trend is not isolated to the US . It is affecting
people in countries everywhere "
-----------------------------------------------------------------------------------------
QUESTION :
NDA government is trying hard to raise share of Manufacturing in our GDP , from current 16 % to 25 % ,
as is the case with most developed / industrialized countries
It is hoped that such a transition will enable us to
provide jobs to those 12 million youngsters , joining
our " Army of Unemployed " , each
year
But what if that increase in " Manufacturing " comes about through vastly
increased " Automation " ?
In that case , instead of being able to provide jobs to
those 12 million , we may end up laying off / retrenching , even those who are currently
engaged in " Manufacturing " !
Increased competition
forces manufacturers to constantly cut costs
And since , they have very little scope to cut costs of
land
/ machinery / materials
/ money ( interest ) etc , they focus on
ways and means to cut " Labour Costs ( Salaries / Wages ) " - often
through replacing humans with automatic machines
And wherever they can , factories are moving out of the
cities / countries ( those " high wage islands
" ) to areas where labour costs are still low !
POSSIBLE ANSWERS :
* Reduce the
" Cost of Money " , through lower Interest Rates to
Companies
( This is expected to happen soon since the
banking system is flush with funds after the
recent
demonetization )
* Reduce the
" Cost of
Land " , by mandating that the farmers providing their lands
to
become
" Equity
Share Holders " in all new projects ( whether Public Sector or
Private
sector /
Infrastructure or Factories )
* Reduce "
Cost of Machineries ", by providing accelerated
depreciation for new projects
This will
also spur the demand for Capital Goods, boosting " Manufacturing Employment "
* Reduce "
Cost of Materials ", by reducing GST rates
from 18 % to 12 %
* Reduce "
Cost of Manpower " , by raising tax exemption
limit to Rs 10 lakh
By increasing
" Consumer Surplus " , this will
reduce wage-increase demands
* Reduce "
Cost of Corruption " by eliminating
corruption ( embedding
RFID chip in notes )
* Reduce "
Cost of Inflation " by limiting " Annual Wages-Salaries
Increases " to 75 % of
the preceding
year's GDP number ( ie: if GDP for 2015, is 8 % , maximum salary / wage
increase that can be granted on 01 April 2016 ,
will be 6 % ) .
This mechanism will set in
motion , a VIRTUOUS
CIRCLE , in reduction of CPI / WPI !
In short , we must make ours, a " Low Cost Economy " as far as " Manufacturing
Sector " is concerned
But to save jobs , the above mentioned measures won't
suffice !
That would require Indians to compete with the
jobseekers around the World - compete with the jobseekers everywhere , in their
own countries !
It is going to be a " Dog eat Dog world " where
it will be " Survival of the Fittest " !
That would require us to turn India into " Back Factory of the World " described in my
following blog ( sent as email to NDA Ministers / Secretaries / MPs / MLAs )
-----------------------------------------------------------------------------------------
Wednesday, 9 September 2015
China is known as the " Factory " of the World
India is known as the " Back Office " of the World
Can India become the " Back
Factory " of the World ?
Wrong question !
Right question is : WHEN can we become the " Back Factory
" of the World ?
Answer is " hiding in plain sight " !
This week , an astronaut , sitting in a satellite 400 km above
the earth and hurtling through space at 16,000 km per hour , operated a robot
on the earth
Earlier , scientists sitting in NASA space centre or in
Shri Harikota space centre , have operated Mars Rovers / MOM ( Mars Orbital
Mission ) remotely
From a distance of millions of miles
And soon , astronauts will be sending emails to earthlings
from millions of miles away , using " Space Internet " on their
Mobile phones
Invariably , each such team of scientists , comprised Indians !
So , WHEN can our scientists - and software Start Ups - enable
Indian workers , sitting in Hyderabad / Chennai etc , to operate / manipulate ,
machinery in factories of Europe / America / China ?
I believe this can become a reality by 2020 , if
Central Government and State Governments , just get out of the way of our
scientists / Start Ups and leave them alone !
Then tell them :
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" You are our next generation of Freedom Fighters . Free
our millions from
poverty / starvation / jobless depression / ignominy / suicides
Like war - ravaged people of North Africa , Indians cannot invade Europe / Australia / Canada , in
search of jobs / better life
We depend upon you to bring
the jobs to India - jobs such as ,
* Operating Machinery in Factories
abroad
* Controlling Air Traffic at Airports around
the World
*
Operating upon patients in Hospitals , all over
* Teaching students in Schools , in remote
Africa
* Any job that currently requires immediate
presence of a worker
And , if you set up a
" Back Factory " , you don't need to pay Corporate Income Tax for
next 10 years !
Simply register on web site of Income Tax Department as a "
Back Factory " owner and
file annual " Zero Corporate Tax Return
"
------------------------------------------------------------------------------------------------------
When this happens ,
* Millions of skilled Indian workers will operate factories around
the World ,
sitting in , internet connected " Back
Factories " in small Indian towns
* Foxcon will not need
to replace its high-wage Chinese workers with one
million robots ( as officially announced sometime back )
At
half the wages of those Chinese workers , Indians will operate Foxcon
factories , all over the World , remotely !
* " Contract Labour Act " will need to be replaced with
" Back Factory " Act
* " Minimum Wages Act " will need to be scrapped
!
* India will not need to fight with WTO on "
Manpower / Service Exports "
*
" Make in India "
will morph into " Make
from India "
I hope NDA Ministers and members of NITI Aayog will ask ,
Narayan Murthy / Sam Pitroda / Azim Premji / Sundar Pichai / Satya Nadela / Ray
Kurzweil etc :
" How
soon can this be done ? How can you help
? "
-----------------------------------------------------------------------------------------
01 Dec
2016
www.hemenparekh.in
/ blogs
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