Artificial intelligence can lead to more job loss, says Raghuram Rajan

Former Reserve Bank of India (RBI) governor Raghuram Rajan has said that artificial intelligence (AI) will pose a threat to job creation in the country. Speaking at the Global Digital Summit #Future in Kochi on Friday, Rajan said growing automation can lead to substantial job losses in the future.

"There has been a steady loss of jobs in routine and unskilled segments. Routine skilled jobs are also being replaced as it is easy to automate them. In future, the routine jobs will be replaced and creativity will be in focus. Jobs that require human empathy will remain relevant. There will be restructuring across all sectors," Rajan said.

Over the last 30 years, India has seen a steady job loss and the fear continues. "One of the big issues in India is jobs and how can we create more of them. We don't want any jobs but good ones. And a big part of the job programme is to try and give people capabilities to move out of agriculture into industry into services where incomes and productivity are much higher. This is how every country has grown; we need to figure out ways to do it," Rajan commented on being asked how the government can create more jobs.

"Education is part of the answer, construction is part of the answer because that creates connectivity and physical connectivity allows people to start businesses, dairy, horticulture etc but also the jobs in construction itself a wearable culture. That's the one way which helped China to grow. We can create jobs which are less threatening. We need to make people adapting to change in jobs which means flexible education and constant renewable of capabilities, some countries like Scandinavian do this very well. In India we can learn both of that," he added.

Highly skilled people may face job loss due to advancements of robots and AI in the country. Rajan also said, "There are lot of things happening globally and we have to bring in a revolution. We cannot be a victim."

Job creation has been a constant issue for the country. There is a scarcity of jobs in every sector at present. "Job statistics in India are not very good. We need to do more. It is only for people to enter the labour force but also for existing people in the force. We have 40-50% in agriculture which is producing 15-18% of GDP that means they are essentially having much lower incomes than the rest of the country," Rajan said.

On the current trade-war issue, Rajan said, "I don't think we should take this lightly. I do hope that better sense sort of prevails and we move off from a full-fledged process of one country doing it and others just reacting and so on. I don't want to use the word 'trade war', I don't think we are there yet but I do think it's very important to stay away because it could harm the current recovery which has been beneficial for the world. And for it to do that, when the US is strong has got good employment is growing quite reasonably, it seems to me this not the time to do this."

ON TRADE WAR

• I don’t want to use the word ‘trade war’, I don’t think we are there yet.
   
• But I think it’s very important to stay away because it could harm the current recovery which has been beneficial for the world.
   
• I hope we move off from a process of one country doing it and others just reacting.