For India to adopt Industry 4.0, it is essential that policy makers harness the change instead of being a reactive agent, says Adithya Anil Variath
The neologism — fourth Industrial Revolution or Industry 4.0 — is not uncommon for policy makers and technocrats. Klaus Schwab, founder and executive chairman of the World Economic Forum, published a book titled, The Fourth Industrial Revolution, and coined the term at the Davos meeting in 2016. Since then, ‘Industry 4.0’ has been a buzzword in all major economic and business summits. The world is at the cusp of an unrivalled revolution. The first one captivated water and steam to mechanise production; the second exploited electric power; and the third relied on electronics and IT. The fourth is a conglomeration of various automation technologies such as Artificial Intelligence, Internet of Things, blockchain, fintech, autonomous vehicles, 5G telephony, nanotechnology, biotech, machine learning, robotics, quantum computing and the like.
‘Industry 4.0’ is shaped by advanced technologies from different spheres like physical and digital worlds that combine to create innovations at a speed and scale unparalleled in human history. The fourth industrial revolution demands ubiquitous digitisation, automatic machine-to-machine communication and is constantly transforming how individuals, Governments and companies relate to each other and the world at large. With such sudden disruption, it will radically change macroeconomics and the way the industry responds to civil society needs.
By its very nature, great and sudden change is painful to accommodate. Preparing for the fourth Industrial Revolution is a subjective task. Developed economies like the US, Russia and China will have to frame policies according to their economic and technological demands. For a growing economy like India, with its underutilised population, young age and cultural diversity, a more people-intensive approach must be adopted. This will require our policy makers to harness industrial change instead of being a reactive agent. In developing democracies like India, it is effective law-making that plays a major role to deliver regulatory frameworks that change often and respond to the stimulus.
The speed of change is unexcelled. It is disrupting almost every industry in every country and it presages the transformation of production and governance. The gap between the first and second industrial revolution was around 100 years, second and third was 70 years, third and fourth is 25 years. Analysing this trend, it cannot be ruled out that the next industrial revolution may take place within 10-15 years. So, it is important that economies pool their resources, take risks, make new investments and come together for better agility to adapt quickly to make best use of this global change.
Going into the history of industrial revolutions, it is apparent that whichever country early participated in the industrial process, turned out to become world leaders. India is a young nation aiming to be the third largest with a $10 trillion economy by 2030. It has no option but to not only participate but also be the front runner.
In 1750 AD, India’s share of global industrial output was roughly above 25 per cent. India missed the first industrialisation due to the devious British Raj and by 1900, this had plummeted to two per cent. While India’s contribution to the world GDP was 2.6 per cent in 2014, it increased to 3.3 per cent in 2017. Addressing a joint sitting of Parliament, the President said that the country’s GDP has been growing at a rate of 7.3 per cent on an average, making India the sixth largest economy in the world. The President also noted that this is an opportune time to play a decisive role in the fourth Industrial Revolution considering our economic position.
Proper channelling of resources towards Industry 4.0 can help India leapfrog traditional phases of development. Being the fastest growing economy, deploying these technologies optimally and strategically can create sustainable growth. A culturally accommodative nation with more than 70 per cent of its population under the age of 32, India’s role will be crucial in shaping the global fourth Industrial Revolution agenda in a millennial and inclusive manner.
Governments, entrepreneurs, business houses and start-ups are rapidly adopting technologies involving AI, IoT, 3D-printing, advanced robotics and blockchain. AI can be used to reduce poverty, improve the lives of farmers and make the lives of the differently abled simpler. The application of AI in sectors from health to law, from manufacturing to finance, from elections to governance, is not an impossible reality. Blockchain can facilitate cross-border data and technology transfers to support Government services and natural resource management. India recently came up with its unmanned aircraft systems policy, commonly referred to as drones, having the ability to strengthen defence and security, make dangerous jobs safe and act as a lifeline for remote populations.
Considering the pace of growth of automation technologies, it is possible that we will reach a point called ‘singularity’, where machines become as smart as humans and then keep getting smarter. Repetitive processes are increasingly becoming automated. Digital technologies have the potentiality to bring about the balance between green and growth, data and infrastructure and profits and people. Technology will soon be able to edit genes to create favourable traits and new life forms. 3D printers may become capable of producing fully functional, usable organs. Banks and financial sectors are already using chatbots and humanoid robots.
It is estimated that between 2018 and 2022, as many as 75 million jobs will be displaced worldwide due to automation; however, as many as 133 million new ones would be created. In the US alone, it is estimated that 1.4 million workers will be displaced in the coming decade as a result of the introduction of new technologies. India’s IT sector is already witnessing jobless growth and there are various reports that show India’s unemployment rate hit a 45-year high in 2017-18. The biggest concern of ‘Industry 4.0’ for every growing economy is the loss of jobs. A potential answer to this problem is — smart politics. In a country like India with 1.3 billion people, it is practically impossible for any Government to provide jobs to everyone, what is practical is to engage people. This engagement is not only about job creation but also about start-ups, alliances, businesses, offshoring, and so on, which will sufficiently help an economy to capitalise the resource pool.
Like all revolutions that preceded it, the Industry 4.0 has the potential to raise income levels and improve the quality of life. Mitigating the relevancy of jobs is not India-specific, it is a global issue. But the peculiarity of this problem is the method of tackling it. Smart policies and thinking can reconstruct these challenges into opportunities. When the first computer was invented, there was a worldwide outcry on its impact on jobs, but history is evidence that computers created more jobs than it destroyed. India, too, faced national protests against the computerisation of railway tickets as economists predicted it would take its toll on the jobs. Today, Indian Railways is India’s largest employer and is about to conduct the world largest employment drive with around 2.37 crore applicants competing for 1.27 lakh posts.
Given the fourth Industrial Revolution’s rapid pace of change, it is important for Governments and international organisations to evaluate whether to create change or follow the change. Legislators and regulators are being challenged to an unprecedented degree and for the most part is proving unable to frame a flexible framework. Unconventional challenges need collaborative efforts. India will have to create a long-term ecosystem with the right mix of accelerators comprising regulatory frameworks, educational ecosystems and Government incentives that train and educates its professionals.
The philosophy of Vasudhaiva Kutumbakam has guided the nation since Vedic times. It is based on the blending of science and spirituality for harmonious co-existence and reaffirms faith in innovation. India can act as a coordinator to collaborate with global economies to form a joint platform or inter-governmental task force involving all stakeholders for leveraging most of the Fourth Industrial Revolution technologies.
(The writer is a student at the School of Law, University of Mumbai)
