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Innovating for an Increasingly Crowded World
Recently, while in a small city in northern India, I needed a cab. So I fired up the Uber app on my smartphone, wondering whether Uber had reached this relative backwater.
To my surprise, a clean car pulled up a few minutes later, and a young man—not a professional cabbie—ferried me to my destination. While the fact that Uber was available in a small Indian city was certainly interesting, I was more fascinated by this observation: Modern technology was helping low-skilled individuals generate income when few other viable employment options were available. And that got me thinking.
When Russian chess champion Garry Kasparov played against IBM’s Deep Blue computer almost two decades ago, he was quoted as remarking before the match that he was “trying to help defend our dignity” (referring to the human species). Since the dawn of the Industrial Revolution in the late 1700s, human labor and, by extension, human dignity, have been on the losing end of the battles between mankind and machines.
MORE PEOPLE, LESS POVERTY
We live in a crowded world. In 1900, the world held about 1.6 billion people. Just 115 years later, the population had swelled to more than 6 billion. Extreme poverty (which the World Bank currently defines as people living on less than $1.25 per day) declined from 36 percent of the world’s population in 1990 to about 18 percent in 2010. More than half of these extremely poor people live in just three countries, according to the World Bank: India, China, and Nigeria, in that order.
While “disruptive” and “game-changing” innovations are continually brought to market, in many ways these technologies are also making human labor less relevant to the process of creating value. So while extreme poverty decreased dramatically in the 20th century, the employment prospects for the folks at the bottom of the economic pyramid still don’t look very promising today.
In 1957, a blockbuster Bollywood film, “Naya Daur” (“The New Age”), explored how the introduction of a bus service threatened the livelihood of India’s traditional horse-cart (tonga) drivers. More recently, an Oxford University study that examined the impact of computerization on human employment reached a rather grim conclusion: nearly 47 percent of all U.S. jobs are at risk of being automated in the next 20 years. The metaphor of the tonga driver racing the bus is still alive, and frighteningly well, nearly six decades on.
THE IMPACT OF AUTOMATION
If you thought dealing with globalization was difficult, imagine throwing automation into the mix. The obsolescence of the human worker is no longer a theoretical abstraction; it’s fast becoming a reality for many people worldwide. According to Bloomberg News, installations of robots in India grew 23 percent between 2012 and 2013, with annual sales of robots hitting a record 1,900. The number may not seem that large, especially when compared to China’s deployment of more than 56,000 robots, but the trend is clear: less-skilled workers are at significant risk of being replaced by machines, especially as countries try to maintain a competitive edge in manufacturing.
Overall, China has a “robot density” of 30 robots per 10,000 workers, while Germany’s robot density is more than 10 times that. As robotization continues to grow in China, the impact will be felt not just in that nation’s domestic manufacturing sector, but also globally. In other words, there’s less incentive to manufacture in Germany (or any other higher-cost location) when you can get the exact same quality for a lower price in China. The implications of such a transition are nothing short of titanic.
Clearly, India is headed in the same direction. If India is to evolve into a middle-income country and finally shed its Third World tag, manufacturing will be critical. “India’s labor force will grow by almost 10 million workers per year for the next 10 years…India will require economic growth rates of 14 percent per year outside of agriculture to meet the need for jobs,” according to a December 2014 report from the James A. Baker III Institute for Public Policy at Rice University.
No wonder, then, that Indian Prime Minister Narendra Modi’s single biggest strategic initiative is the “Make in India” campaign, which he’s using to woo global companies to set up shop in India and actually manufacture products there, as opposed to merely using India for back-end services. Among the early success stories are that of Mercedes Benz, which has begun manufacturing luxury buses in India, and Samsung, which is building liquefied natural gas (LNG) tanker ships. Each example is a first for the country.
But even here, robots are beginning to creep in. India’s Royal Enfield Motors Ltd, producer of the iconic Bullet brand of motorbikes, now deploys robots to do painting and finishing work. In a particularly grim forecast, Tharman Shanmugaratnam of the International Monetary Fund estimated that India has only about a decade left before robots handle all labor-intensive manufacturing.
HUMANS AND MACHINES: WORKING TOGETHER
It’s clear that even if population growth slows down quite a bit, billions of people will still need gainful employment. Driven by the need for efficiency and cost reduction, most of our technology has been designed to automate processes and, ultimately, replace human workers. We don’t need technologies that can eliminate humans; instead, we need technologies designed to provide avenues for employment and increase productivity without replacing people.
Imagine the benefits if every rickshaw driver in India or every tuk-tuk driver in Thailand used a ride-sharing network like Uber or Lyft (or others like them). At that point, the situation is no longer a battle of humans versus machines, but, rather, humans using machines to survive in a crowded world. Any technology that can help the low- or no-skilled workers make a living with dignity is a technology that we ought to support.
Manju Bansal is vice president at SAP Startup Focus, which works with startups in the big data and predictive or real-time analytics spaces, supporting them in building innovative applications that use the SAP HANA database platform. The program serves more than 2,400 companies worldwide, such as Meteo Protect, based in France, which uses real-time weather data to customize risk and insurance solutions for small family farmers in India. The author has no interest, financial or otherwise, in the ride-sharing services mentioned in this article. Join the conversation on Twitter at @SAPStartups or follow the author: @BansalManju.
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June 11-12, 2019