Technology and The Labour market

In 1811, British skilled knitters in England saw their jobs threatened by new technology and they responded by organizing violent revolts. In the early 20th century Henry Ford combined moving assembly lines with mass labour to make building cars much cheaper and affordable to the masses. A recent example of Technology advancement can be seen as retailing giant Walmart.  Walmart has found ways to bring goods to consumers at a lower cost than traditional retailers. Each cashier manned each customer at a time , now as many customers can make purchases with reduced queues and less labour overhead. Also walmart has destroyed many small mom and pop grocery stores.

Technology has always been a driving force behind economic growth in an economy but it has some consequences on the labour market as well. Growth in Technology was very important was realized by the policy makers when there was a global slowdown in economic growth during 1972-1995. And the reason for this fall was the rate at which the production function was increasing. The rate was quiet slow and it itself explains how important technology growth if for the economy.

Today a group of innovative entrepreneurs is striving to do the same to all services, bringing together computer power with freelance workers to supply luxuries to all. OLA, Meru cabs provides you chauffeurs. Zomato reviews your choice of food , Bluedart delivers couriers to your doorstep and many online portals try to fulfill your wishes at your doorstep. Yet this on-demand economy goes much wider than occasional luxury. The on- demand economy is small but growing very rapidly. Karl Marx said that the world would be divided into people who owned the means of production and people who work for them. Infact today it is being divided between people who have money but no time and people who have time but no money and this on demand economy has provided a way between these two groups of people to trade. Labour market becomes more competitive hence freelancers have to master many skills at a time and to keep their skills up-to-date.

Talking of India’s labour market involved in e-commerce. Iwould like to use Flipkart as an example.

Flipkart was founded in 2007 by Mr. Sachin Bansal and Mr. Binny Bansal who initially worked for Amazon.com. In a country like India where people still prefer to shop in person e-commerce start-ups faced many challenges and today thanks to Flipkart it has become one of the fastest growing sector. Flipkart initially started with selling books and soon expanded and began offering a wide variety og goods . In2008-09 , flipkart made sales to Rs 40 million and targets to hit  Rs 1 billion in 2015. today Flipkart employs about 33,000 people across country and to make several strategic hires in 2015.

Technology advancement is indeed a key to sustained growth and persistently rising living standards. But with that comes the Creative Destruction with every advancement in technology

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