Dear members,
Over the last few decades, we have witnessed tremendous technological developments that have drastically improved life for mankind. The next few decades are likely to be a period of profound scientific change. The inventions once confined to the realm of science fiction are coming into common usage. A German Sociologist and Media Researcher Volker Grassmuck says, “The ultimate promise of technology is to make us masters of a world that we command by the push of a button.”
With the rise of computing and digital technology, the automation process started crossing boundaries with automation of even mental work. Authors Erik Brynjolfsson and Andrew McAfee in their book “The Second Machine Age” make a case that humanity has reached an “inflection point” for the digital age. The computers and other digital advances are doing for mental power, what the steam engine and its descendants did for muscle power. The Artificial Intelligence (AI) and machine learning technology have enabled computers to make decisions, recognise speech and visualise in 3D. The Internet of Things (IoT) that connects devices, systems, and services and goes beyond machine-to-machine communications is spreading quickly and is expected to connect nearly 26 billion devices by 2020.
A case in point is the self-driving car being developed by several companies. You could get in the car, go to sleep and wake up at your destination. With Google, Tesla, Uber and now even Apple joining the race, autonomous vehicles are predicted to be commercially available by 2020.
Such technological developments result in unintended consequences. Brynjolfsson and McAfee argue that while automation of the physical work still requires humans to be the control system, it is less clear what the role of humans would remain with automation of the control system itself. Such developments could lead to technological unemployment as there may not be another big sector of the economy to absorb all these workers.
Stephen Hawking, a well-known scientist, has warned that AI could one day spell the end for mankind and that humanity faces an uncertain future as technology learns to think for itself and adapt to its environment.
In his book “The Rise of the Robots”, the Silicon Valley-based futurist Martin Ford forecasts significant unemployment and rising inequality unless radical changes are made. In the past, technology created as many jobs as it destroyed and made people better off by making goods and services cheaper. However, this premise is no longer valid. Martin argues that increasingly the humans are becoming less and less useful compared to machines. As an example, he cites New York-based start-up Work Fusion, which sells software to businesses to automate big projects that would previously have been done by office workers. The software divides the job into micro-tasks, automates the repetitive bit then recruits freelance workers through crowdfunding platforms for tasks that require thinking. The software not only manages these freelance workers, it monitors what they are doing, but also learns from them. Over time, the software can automate more and more. As freelance workers do their jobs, they are, in effect, training the software to replace them.
A survey of nearly 2,000 experts carried out by the Pew Research Centre, reveals over half of them believe the technology will have displaced more jobs than it creates by 2025. In a recent study conducted in the UK, Michael Osborne and Carl Frey from Oxford University conclude that 35% of UK jobs were at high risk of disappearing in 10 to 20 years because of automation.
The experts foresee the job categories most at risk include cab drivers as well as neurosurgeons as driverless cars would cause lesser accidents. It will also include professionals such as taxation experts and accountants where the job involves manipulating a formulaic information. Disruptive innovation does not take kindly to entrenched competitors, and autonomous car could severely impact not only the major automakers but also ancillary and allied industries.
Is it that we are extrapolating too far based on examples such as self-driving cars? Is mankind capable of adapting to the big shifts in employment? Probably the risk to some of the professions is exaggerated as the importance of human interactions and discretion cannot be underestimated.
Many believe that greater automation would continue to raise average productivity, new sectors opening up leading to more exciting, more cognitively challenging, better paid and fewer dangerous jobs. Some experts believe that there will still be plenty of room for humans, with common sense and judgment, to complement the work of machines. The advancements such as autonomous cars have the potential to reverse the trend of global warming and drastically reduce our dependence on fossil fuels.
Individuals will need to cultivate skills such as idea generation or performing arts where humans currently have the comparative advantage. The recommendations for policymakers could include boosting entrepreneurs to enable them to invent the new industries and jobs necessary to replace the old ones and refocusing education to emphasise creativity and interpersonal skills. Thus, while the debate over philosophical and ethical aspects will continue, mankind will need to exercise intellectual discernment to contain negative fallouts of technology developments.
On a separate note, the much awaited IndAS has finally seen the light of the day. The Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Rules 2015 which come into force on 1st April, 2015. The announcement came while the 5th Residential Study Course on IFRS/Ind AS organised by the BCAS was in progress. Thus, your Society became the first organisation in India to hold a program on the notified Ind AS.
By the time you read this message, we would be busy dissecting provisions of the Finance Bill, 2015 and the Union Budget for 2015-16. The recent election results in Delhi suggest that Aam Aadmi is getting restless. It tells that no ruling dispensation can take the public for granted and let’s hope that the Government has learnt useful lessons. We look forward to the first full-fledged budget of the NDA to be a step towards fulfilling all the promises made and meeting raised expectations that puts India back on a high and all-encompassing growth trajectory.
With warm regards,
