Ask yourself, which of these phenomena wasn’t visible in January this year, when the world had barely heard of the virus: powerful technology platforms, shared mobility, widespread use of robots and artificial intelligence in manufacturing and services, increasing contractualisation of work (aka gigs), and free or near-free digital services (mail, maps, apps, new blogs, virtual money)?
About the only thing that seems relatively new is working from home (WFH), even though this had already begun creeping in much earlier (eg Lijjat papad, or garment stitching). What Covid has done is mainstream a fringe trend like gig work in a technology mediated world. Covid accelerated previous trends; what might have taken a decade to play itself out has now been achieved in a matter of months. We have nowhere to hide.
The economy is being “uberised” (you could call it google-ised or amazonised or jio-ised, if you so prefer), where the middle function in most economic activity – the task of bringing buyer and seller together, or communicating from top to bottom and vice versa – has been taken over by technology.
Disintermediation – the elimination of the middle person – isn’t a new phenomenon. Even in the last decade of the last century, trading terminals and the internet had replaced brokers and jobbers in stock and commodity markets; many companies could raise loans without going to a bank; property could be bought or rented using websites; personal payments could be managed digitally. The only difference today is all this can be done universally through your mobile phone.
Nowhere is this disintermediation process more evident than in media and publishing, where a job once done by a handful of journalists and editors – the middle layer connecting the news maker to the news consumer – is being done by millions of bloggers and digital platforms. You no longer need to curry favour with a book publisher to get your life’s work published. You can do it at minimal cost in the form of an e-book using a global platform as distributor.
The technology trend that is irreversible is the replacement of middle skill, middle income work, especially jobs that humans find difficult to do without fatigue or error. Skill demand is polarising, with high demand for super-skilled or talented workers (AI programmers, cyber security experts, design and sales staff etc), and declining demand for cushy middle level jobs that those at the bottom of the pile have always aspired for, in banking and financial services and low level software coding.
Even where jobs cannot be eliminated (eg doctors and nurses), parts of the jobs will increasingly be done by algorithms and technology. The humble doctor will be humbled by technology; a few can do more, aided by databases and algorithms, and so we will need fewer doctors.
The era of shared ownership – rental housing and cars, use of idle homes for accommodating tourists (which is what Airbnb does), work spaces that can be hired instantly – is with us. The need for fresh investments to create new capacities will be lower as existing assets are flogged.
On the plus side, what this technology driven change will ensure is massive horizontal growth in what one can call “blue collar services” and “dependent” entrepreneurship. Even as the blue collar job in factories is vanishing, it is expanding dramatically in services. Consider the lakhs of people being hired as delivery agents and warehouse workers by e-commerce companies. Consider the massive expansion in shared mobility, the Ubers and Olas, where an app brings taxi services to consumers.
While app owners claim that their taxi services are provided by “independent contractors”, a UK government report on modern work trends (Good Work, the Taylor review of modern working practices) defines the relationship more correctly. Since the Uber driver cannot operate without the app, he is a “dependent” contractor of the company. Other apps bring you home and office services (plumbers, electricians, domestic help, chauffeurs) for a fee.
The reason for the explosion in “blue collar” services is that technology simplifies the learning of relevant skills. Example: Furniture today is increasingly made in factories and assembled at homes or offices. This means you don’t need expert knowledge of carpentry anymore. Companies like Ikea will ensure that you can assemble your furniture all by yourself, if you so want, even though you can hire an assembler for a small fee.
The short point is this: there is going to be massive demand for relatively low skilled work, and this is a trend we need to aid, not hinder. What the government can do is create or support such technology aided work practices so that they are not exploitative of the “dependent” contractors or gig workers, set up financial and safety nets tailored for part-time workers, including work from home (which, incidentally, can be a huge boon for home makers), and make schools and universities more agile at offering short term skilling courses rather than useless knowledge or degrees.
Uberisation, defined as the use of more technology in the middle function, is heading towards us at breakneck speed. We can either resist it and wonder where the jobs disappeared, or harness it and tailor it to our needs by adapting to this reality.
(The author is editorial director of Swarajya)