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In A Changing World…

The world is changing fast… and, one of the most important changes is the transition-process in of the job market! The emergence of Artificial Intelligence (AI) and Digital Technology has changed the perspective of economy and types of jobs in recent times! IKEA, a Swedish multinational group that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, took nearly three decades to capture the European market after the company was founded by 17-year-old Ingvar Kamprad in 1943. Seven decades later, the volume of its annual sales is USD 42 billion. However, China’s Alibaba, the world’s biggest online commerce company, has managed to take its customer base to one million in just two years, as its volume of sales has touched USD 700 billion in the last 15 years! This unprecedented prosperity has been possible because of the well-integrated Internet-based digital technology. The main theme of the World Bank’s World Development Report 2019 was: ‘The Changing Nature of Work‘…
The number of working people in the manufacturing sector is constantly decreasing in the developed nations. As per the WB Report, the workforce has shrunk by 10% in this particular sector in countries, like Portugal, Spain and Singapore, since 1991. The centre of gravity of the job market has shifted towards the service sector, whereas the developing nations still depend on labour-intensive industries. Although the labour market still has a share in the manufacturing sector there, the service sector maintains a steady growth rate. As the demand for Digital Technology-based skills has been created in the Global job market, the developing nations have started supplying cheap labour. For example, an American company has created 2000 software programmers in Africa with the help of free online tools. These programmers are able to work with the company and its clients. Most importantly, the company has decided to create 100,000 such programmers in Africa by the end of 2024!

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Workers are rapidly losing jobs in the manufacturing sector. In its latest report, the Periodic Labour Force Survey has stated that in a country like India, job opportunity had increased from 50.39 million to 50.9 million in seven years (from 2003-04 to 2011-12). The number came down to 50.64 million in 2019! As AI and Internet of Things have replaced the work force in the organised sector, technology has started playing an important role. While the cost of wage has come down to almost zero, the volume of profit has jumped up!
The production system is all set to give birth to a very wealthy class in near future with the help of machines that could work 24×7 without any wage. At the same time, about 70-80% of the population is moving out of the production system! If that is so, a question naturally arises: what will they do?

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Meanwhile, a private service sector has been created to help those 20-30% wealthy class lead a luxurious way of living. Some have termed it the ‘Servant Economy‘! The Servant Economy has maintained 6.1% growth rate (more than any other sector) in the US in the last one year. This sector includes manicure, pedicure, taking care of hospices, baby-sitting, pet-care, massage, beauty care, skin care, driving and the like… However, there is no social or job security in this sector, and the average salary is also very low.
One of the major aspects of the changing structure of the job market is the expansion of the Gig Economy, a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. For example, delivering food items purchased through various apps, to the buyers.

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The emergence of the Gig Economy has created an independent workforce across the globe. The scenario has also triggered a rise in the number of Platform Firms or app-based trading companies. A Chinese online platform company has reportedly connected with more than 60,000 teachers in the US to teach English Language to 500,000 students in that country.
This change is also influencing the Education Sector. Children, who got admitted to schools in 2018, would perform those tasks that do not exist now… and, when they pass out from college after four-five years, then the technology may even change radically! So, the World Bank has stressed on the formation of Human Capital. Instead of prescribing any particular formula, the Global Lender has advised the Governments to concentrate mainly on Education and Health. No one knows how the need for Human Capital will change in accordance to the technological changes… however, the Global Community would have to be prepared for that change!

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