With advances in Machine Learning, Artificial Intelligence and Robotics, this was going to change still further, as they take up the jobs, ranging from those in unskilled sweatshops to high-skilled professions like medicine, the former RBI Governor said.
Rajan said India has to embrace technology and become a leader in the digital transformation taking place around the globe without being bogged down by unfounded fears of job losses, incomes or machines replacing humans.
Among the biggest obstacles to technology adoption were fears of the man being replaced by machines a fear that has existed since the industrial revolution, but never materialised.
“Two hundred years since the industrial revolution, jobs are still around. People and society adapt to do the things that machines cannot do,” Rajan said.
Rajan said that in every industrial country, more jobs have disappeared in routine skilled and non-routine unskilled jobs, which has partly led to the anxieties.
The former RBI Governor said another aspect of the fear was where the incomes would come from; the answer to which was an assured Universal Basic Income.
In terms of business opportunities, the government needs to do far more for start-ups to flourish in India by creating easy paths to incorporation and funding, he said.
Rajan said that one of the big lacunae in India was risk financing and so start-ups go elsewhere because they need risk financing, which was not available in the country.
Another significant area where India effectively needs a revolution in education and skill building, Rajan said.
“We need to remedy weaknesses in education at every stage, build more world-class institutions domestically and bring the talent back from abroad,” Rajan said.
“We are not as global as we should be even now. Too many of our people are too poorly educated or skilled to compete in a globalised tech-enabled economy,” Rajan noted.