Industrial Revolution 4.0: challenges and way forward | 29th October, 2020

Industrial Revolution 4.0

Industrial Revolution 4.0 refers to the fourth industrial revolution related to manufacturing and chain production. It is driven by breakthroughs in digital technologies, such as artificial intelligence, robotics, 3D printing, the IoT, Big Data etc.

The Drivers of Change:
  • Technological breakthroughs: New technological innovations such as Big Data, 3-D printing, artificial intelligence and robotics is bringing transformative impact on the nature work.
  • Demographic Changes: the world’s population is ageing, putting pressure on business, social institutions and economies. The shortage of a human workforce in a number of rapidly-ageing economies has necessitated automation.
  • Rapid urbanisation: The UN projects that by 2050, the world’s urban population will increase by some 72%. Rapidly growing cities have become drivers of a new industrial revolution.
  • Shifts in global economic power: Power shifting between developed and developing countries with a large working-age population will attract investments and become a driving force for the future of work.
Recent Trends of Employment in India:

  • Continued Presence of Informal Economy: Nearly 90% of India’s workforce belongs to the informal sector.
  • Contractualization of employment: The share of contract workers in total employment in India increased from 15.5% in 2000-01 to 27.9% in 2015-16. The share of directly hired workers fell from 61.2% to 50.4% over the same period.
  • Gig Economy: It is characterised by short-term contracts or freelance work as opposed to permanent jobs. It often involves connecting with customers through an online platform. Example: Delivery boys of app-based food, consultants, bloggers. In India, there are about 3 million gig workers — temporary workers including independent contractors, online platform workers, contract firm workers and on-call workers.
  • Resource scarcity and climate change: According to the report Global Trends 2030, demand for energy and water is forecast to increase by 50% and 40% respectively by 2030. Jobs in alternative energy, new engineering processes, product design and waste management and re-use will be created.

 Challenges to the Future of Work: Industry 4.0

  • Low Job Creation: Job creation has not been sufficient to absorb the growth in the number of people seeking jobs. As of 2016, there were some 198 million jobless people globally who have been actively seeking employment
  • Poor Quality Employment: Globally, nearly 43% of employed people were in own-account or contributing family work which is often characterized by low pay, informality and limited social security.
  • Income inequality: ILO observes that although workers have become increasingly productive, the benefits of their work have increasingly accrued to capital income and to those at the top of the income distribution.
  • Gender Pay gap: Though female labour force participation has increased the gender pay gap remains a major concern with women still being paid 20% less than men.
  • Digital Divide: Only 53.6% of all households have internet access. In emerging countries, the share is only 15%. Given the rapid technological advancements, digital divide remains a key challenge for skill development and employment opportunities.
  • Impact of Technology on Employment: There are fears that technological development will lead to job destruction. Automation could be harmful for labour-intensive industries in India such as textiles, finance, construction, hospitality, travel, tourism, media, electronics, mining, agriculture, transportation and entertainment.
    • The Indian ICT sector is susceptible to AI/robots replacing workers in its major IT export markets.
    • The retail sector, the largest employer of lower skill youth, is job shedding as e-retail accelerates and human jobs in logistics, warehousing and delivery services are being robotised.

Way Forward:

  • Universal Labour Guarantee: All the countries should pledge to provide a universal labour guarantee that protects fundamental workers’ rights, an adequate living wage, limits on hours of work and safe and healthy workplaces
  • Lifelong Learning: It is important to provide a universal entitlement to lifelong learning that enables people to acquire skills and to reskill and up skill.
  • Investment to support Work Transition: Investments in the institutions, policies and strategies that will support people through future of work transitions should be increased.
  • Agenda for Gender Equality: It is important to strengthen women’s voice and leadership, eliminating violence and harassment at work and implementing pay transparency policies in order to achieve gender equality.
  • Social Protection: A guaranteed social protection from birth to old age that supports people’s needs over the life cycle should be provided
  • Governance for Digital Platforms: An international governance system for digital labour platforms should be established to protect minimum rights of workers
  • Sustainable Work: Incentives are required to promote investments in key areas for decent and sustainable work- in areas of green, rural economy, small and medium enterprises
  • Human centric business and economic Model: Distributional dimensions of growth, the value of unpaid work performed in the service of households and communities and the externalities of economic activity, such as environmental degradation should be taken into account for a human centric business and economic Model
  • Roadmap for India: India should adopt Chard Dham Roadmap for steering technological change.
    • Gyaan Dham: a national observatory for scoping the tech-to-work equation and its trajectory should be established. Databases on existing and future trends, sector by sector, needs to be created.
    • Kaushalya Dham: It means nurturing “human capabilities” for Tech-Economy 4.0 work. To meet labour market needs, potential skill gaps must be closed through the NEP and comprehensive training infrastructure.
    • Suniyojan Dham: It involves transformative investments in multi-stakeholder ecosystems to empower the youth and women through future-of-work transitions.
    • Samajik Nyaya Dham: It means ensuring a just transition through a new social compact among all stakeholders and a universal social protection floor. A human-centred and equity-based approach in future labour market policies and standards is needed.
    • Upakram Dham: It involves taking special initiatives enabling India to leverage the world’s third-largest ICT workforce to pole-vault into Tech4 excellence. India’s diversity, scale for neural net, data richness, huge base of engineers, mathematicians and coders of AI available or trainable at scale, and decent ecosystems in ICT metros are critical assets.
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