The big buzz at the World Economic Forum (WEF) in Davos this year is about the ‘Fourth Industrial Revolution’, described by the founder and executive chairman of WEF, Klaus Schwab, as a “technological revolution that will fundamentally alter the way we live, work and relate to one another”.
The fourth industrial revolution is conceptualised as an upgrade on the third revolution — and is marked by a fusion of technologies straddling the physical, digital and biological worlds. In a paper on The Fourth Industrial Revolution: what it means, how to respond, Schwab says that three things about the ongoing transformation mark it out as a new phase rather than a prolongation of the current revolution — velocity, scope, and systems impact. The speed of change is utterly unprecedented, it is disrupting almost every industry in every country, and it heralds “the transformation of entire systems of production, management, and governance”.
Case of India:-
In 1750 AD, India’s share of global industrial output was 25%; by 1900, this had declined to 2%. The reasons were the chaos triggered by the decline of the Mughal empire, colonization by Britain and the first industrial revolution.
Like China, India missed out on the industrial revolution which saw the invention of the steam engine and powered looms and unleashed a productivity revolution. As a result, our handloom industry was decimated; India became deindustrialized and fell into abject poverty. China has re-industrialized with a vengeance, while India is still struggling to catch up.
This bit of history is more relevant than ever. The industrial revolution was a massive disruption. Countries that drove it or embraced it went from rags to riches, while those that missed out went from riches to rags.
Today, we are in the midst of the fourth industrial revolution that promises to be profoundly more disruptive. The question is whether India is positioning itself to ride this tidal wave or whether once again we will be swept away by it.
The world is at the beginning of a revolution where there are huge advances in genomics, artificial intelligence, materials and manufacturing technologies. Machines are closing in on human ability with astonishing speed. Robots are replacing humans not just on factory floors but in homes too. Reusable rockets promise to make space travel and colonies on Mars and the moon a reality.
Possibly in our own lifetime, we will reach a point called “singularity” where machines become as smart as humans and then keep getting smarter. We will soon be able to edit genes to create favourable traits and new life forms. Science fiction is becoming reality.
As with previous industrial revolutions, new technologies will create new jobs and simultaneously destroy many old ones. The rise of machines, from robots to smart software, threatens to impact not just low-skilled factory workers, but everyone including software engineers, stock traders and taxi drivers.
Even chief executive officers are not exempt; a recent McKinsey study estimates that half the tasks done by CXOs can be automated. While in the long run, it is possible that more jobs will be created than are destroyed; in the medium term, the opposite will be true.
An Oxford study estimates that 47% of the jobs in the US, 69% of the jobs in India and 77% of the jobs in China will not exist in 25 years. This is not conjecture. China’s factories are adding robots faster than they are hiring people. India’s information technology sector is already witnessing jobless growth and total employment may have peaked.
The really vital question is this. While lots of people will lose their jobs all over the world, where will the new jobs be?
Today, much of the world’s fundamental research and innovation is happening in the US. Disruption is being driven very disproportionately by American companies such as Google, Amazon, Tesla, Illumina or First Solar.
The chances are quite high therefore that the bulk of the new jobs will be created in the US. This is important. In the first industrial revolution, Britain and Europe were able to export the job losses created by machinery to colonies such as India. Productivity growth and trade eventually resulted in enormous job and wealth creation in Europe even as it resulted in famine and devastation in India, China and Africa.
Let us assume that all the new developments will create five new high-end jobs and destroy 10. Current trends would suggest two of these will be in the US, two in China and perhaps one in Europe. If this is true, do countries like India once again become colonies? Not of countries perhaps but of companies such as Google, Pfizer or Monsanto? Do we simply become markets for innovations developed elsewhere? Will the vast majority of our people then live on subsistence-wage service jobs? Is India doomed to remain a low-middle-income country?
India is already facing a severe jobs crisis. The consequences of the fourth industrial revolution are truly frightening unless, of course, we learn to ride this wave. But what exactly does that take?
People often wistfully wonder whether India will have its own Microsoft or Google. This is exactly like wondering when we will win an Olympic gold medal. If we win a gold medal, it will be because of a freak event—a person of extraordinary ability and tenacity—not because of the system.
What allowed Apple, Microsoft and Google to emerge is fundamental scientific research at world-class corporate labs such as Xerox PARC or Bell Labs and universities such as Stanford and Massachusetts Institute of Technology. The US government has played a vital role in underwriting high-risk, long-term research projects through institutions such as Defense Advanced Research Projects Agency and National Science Foundation; virtually all the technology in the iPhone was funded this way.
Sensible immigration policies attracted the brightest minds from India, China, Russia and Hungary to these labs. Finally, a vibrant entrepreneurial ecosystem allowed the commercialization of research.
The contrast could not be more stark. There is almost no understanding or discourse on these matters in India; our policymakers, scientists and business leaders are firmly stuck in the old paradigm.
Not one Indian university is ranked in the global top 300. It is hard to think of a single Indian company that is at the leading edge of any of the disciplines that matter to the future. To do cutting-edge work in most scientific and engineering disciplines, our finest minds have either to join the research and development centre of a multinational company or leave the country. Government funding for science-based technology research has been minuscule. It is no wonder that all our entrepreneurial activity is restricted to me-too businesses rather that game-changing ideas.
The fourth industrial revolution simultaneously poses the biggest opportunity and the largest threat to a prosperous future. India cannot afford to squander this moment. What we need urgently is a national mission like the Apollo space programme.
Recent Posts
- In the Large States category (overall), Chhattisgarh ranks 1st, followed by Odisha and Telangana, whereas, towards the bottom are Maharashtra at 16th, Assam at 17th and Gujarat at 18th. Gujarat is one State that has seen startling performance ranking 5th in the PAI 2021 Index outperforming traditionally good performing States like Andhra Pradesh and Karnataka, but ranks last in terms of Delta
- In the Small States category (overall), Nagaland tops, followed by Mizoram and Tripura. Towards the tail end of the overall Delta ranking is Uttarakhand (9th), Arunachal Pradesh (10th) and Meghalaya (11th). Nagaland despite being a poor performer in the PAI 2021 Index has come out to be the top performer in Delta, similarly, Mizoram’s performance in Delta is also reflected in it’s ranking in the PAI 2021 Index
- In terms of Equity, in the Large States category, Chhattisgarh has the best Delta rate on Equity indicators, this is also reflected in the performance of Chhattisgarh in the Equity Pillar where it ranks 4th. Following Chhattisgarh is Odisha ranking 2nd in Delta-Equity ranking, but ranks 17th in the Equity Pillar of PAI 2021. Telangana ranks 3rd in Delta-Equity ranking even though it is not a top performer in this Pillar in the overall PAI 2021 Index. Jharkhand (16th), Uttar Pradesh (17th) and Assam (18th) rank at the bottom with Uttar Pradesh’s performance in line with the PAI 2021 Index
- Odisha and Nagaland have shown the best year-on-year improvement under 12 Key Development indicators.
- In the 60:40 division States, the top three performers are Kerala, Goa and Tamil Nadu and, the bottom three performers are Uttar Pradesh, Jharkhand and Bihar.
- In the 90:10 division States, the top three performers were Himachal Pradesh, Sikkim and Mizoram; and, the bottom three performers are Manipur, Assam and Meghalaya.
- Among the 60:40 division States, Orissa, Chhattisgarh and Madhya Pradesh are the top three performers and Tamil Nadu, Telangana and Delhi appear as the bottom three performers.
- Among the 90:10 division States, the top three performers are Manipur, Arunachal Pradesh and Nagaland; and, the bottom three performers are Jammu and Kashmir, Uttarakhand and Himachal Pradesh
- Among the 60:40 division States, Goa, West Bengal and Delhi appear as the top three performers and Andhra Pradesh, Telangana and Bihar appear as the bottom three performers.
- Among the 90:10 division States, Mizoram, Himachal Pradesh and Tripura were the top three performers and Jammu & Kashmir, Nagaland and Arunachal Pradesh were the bottom three performers
- West Bengal, Bihar and Tamil Nadu were the top three States amongst the 60:40 division States; while Haryana, Punjab and Rajasthan appeared as the bottom three performers
- In the case of 90:10 division States, Mizoram, Assam and Tripura were the top three performers and Nagaland, Jammu & Kashmir and Uttarakhand featured as the bottom three
- Among the 60:40 division States, the top three performers are Kerala, Andhra Pradesh and Orissa and the bottom three performers are Madhya Pradesh, Jharkhand and Goa
- In the 90:10 division States, the top three performers are Mizoram, Sikkim and Nagaland and the bottom three performers are Manipur and Assam
In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)