By | Abhijit Bhaduri |Keynote speaker, Author and Columnist
Bain just released a study of 3 factors shaping careers. These three factors together will come together and have a far sharper impact on your career than you imagine. So what are the 3 factors?
3 Factors – Demographics, Automation and Inequality
Why do these three factors matter? The interplay of these three factors can shape the labor market. The demand and supply of labor can impact wages. When there is abundant supply of a skill, it dampens wages. Of these three factors, I believe that the birth rate when combined with other factors such as longevity driven by improved health, medicines and awareness can determine the path your career will take.
Kids are the future
In his book The Rise & Fall of Nations, economist Ruchir Sharma explains that the trigger for economic growth lies in a 2.1% increase in working population. The birth rate is falling in many countries. The Wall Street Journal wrote recently about the restaurant that is using robots to flip burgers because they are unable to find enough people. Using robots also boosts productivity because the machines do not complain and can work 365 days a year. When the birth rate falls and people live longer, two things happen.
- The demand for goods and services drop. The older folks do not spend on as many goods and services as the youth. Hence the problem of unsold goods begins to haunt the manufacturers.
- The increasing share of people over 65 starts straining the social security system since a smaller working population has to support an ever growing elderly dependents.
The nations have to create policies to get more untapped labor pools into the workforce.Women, retirees, immigrants have to be used to supplement the dropping labor pool.
Immigrants create jobs
The robots are now getting better and cheaper. The cost of automation drops and it becomes increasingly attractive to replace humans with machines. That means developing countries like India will have to keep competing against dropping costs of robots.
The investment in education has to be re-examined. In the developing countries, the new talent pools ie women, retirees, immigrants have to be reskilled. Immigrants are seen to be a threat because everything from crimes to unemployment is blamed on them. The reality is otherwise. Apple, Google, Oracle, Amazon, Symantec, eBay have all been created by immigrants or their children. 216 of the Fortune 500 companies were created by immigrants or children of immigrants.
Teach your children
In India education that encourages going beyond literacy and employability. (Read: How to fix education in India). The opportunities will continue to be skewed in favor of the highly educated. Organizations are ready to pay a premium for jobs that need higher education and deep specialization. AI salaries are topping a million dollars even at non-profit organizations. The world cannot have enough of them.
That is the paradox. Low wages for workers today are likely to predict low wages for those same workers tomorrow (and for many years after) says Oxfam. The inequalities will rise. In a digital world, the distribution is never according to the normal distribution. It favors the top 1%.
73% wealth generated was for richest 1%
The rich are getting richer. In 2017, the richest 1 per cent in India cornered 73 per cent of the wealth generated in the country.
“2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days. Billionaire wealth has risen by an average of 13 per cent a year since 2010—six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 per cent.” – Oxfam’s 2018 report Reward Work Not Wealth
The Relationship Worker
Creating low end jobs is not going to be sustainable. Machines will outperform us every time. It may be hard to build the capability at scale to build techies with deep expertise in Artificial Intelligence. As machines take over from humans, all that is left is creativity and the ability to manage human relationships. That is what India excels at. Instead, India needs to leverage the strengths that it has. It is a culture where relations matter. This is not to take away from the need to build deep tech skills, but to supplement it with something that we may have an advantage in.
The hard thing about soft skills
Investing heavily in soft skills development may be a great way for India to carve out a niche for itself. The ability to be creative. The ability to work with people effectively and have deep expertise will be the way forward. The employers will have to start doing this. So will the government. Being able to reskill and upskill ourselves continuously will have to take up mindshare at the highest levels.
This time we are competing with machines. It is an unequal race unless we build a nation of curious learners.