Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Wednesday, 30 November 2016

Automation is Inescapable



In 1952 , American technocrat / visionary , John Diebold wrote a book titled :

  AUTOMATION

Since then , it has remained some kind of a " Bible " for enthusiasts of automation ( - that includes , me ! )

Fast forward to 2016 ( 64 years later )

A few days back , here is what the World Bank President , Jim Yong Kim said ;

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"  In large parts of Africa , it is likely that technology could fundamentally disrupt this pattern .

Research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69 % , in China it is 77 % and in Ethiopia the percentage of jobs threatened by automation is 85 %

Now , if this is true , and if these countries are going to lose those many jobs , we have to understand what paths to economic growth will be available for these countries and then adapt our approach to infrastructure accordingly

Mechanization and technology have disrupted traditional industrial production, upended manual jobs and call time on the work that has been done by generations of families

This trend is not isolated to the US . It is affecting people in countries everywhere  "


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QUESTION :

NDA government is trying hard to raise share of Manufacturing in our GDP , from current 16 % to 25 % , as is the case with most developed / industrialized countries


It is hoped that such a transition will enable us to provide jobs to those 12 million youngsters , joining our " Army of Unemployed " , each year


But what if that increase in " Manufacturing " comes about through vastly increased " Automation " ?


In that case , instead of being able to provide jobs to those 12 million , we may end up laying off / retrenching , even those who are currently engaged in " Manufacturing " !


Increased competition forces manufacturers to constantly cut costs


And since , they have very little scope to cut costs of land / machinery / materials / money ( interest ) etc , they focus on ways and means to cut " Labour Costs ( Salaries / Wages ) " - often through replacing humans with automatic machines


And wherever they can , factories are moving out of the cities / countries ( those " high wage islands " ) to areas where labour costs are still low !



POSSIBLE  ANSWERS  :

*   Reduce the " Cost of Money " , through lower Interest Rates to Companies
     (  This is expected to happen soon since the banking system is flush with funds after the
      recent demonetization )


*   Reduce the " Cost of  Land " , by mandating that the farmers providing their lands to
     become " Equity Share Holders " in all new projects ( whether Public Sector or Private
     sector / Infrastructure or Factories )


*   Reduce " Cost of Machineries ", by providing accelerated depreciation for new projects
    This will also spur the demand for Capital Goods, boosting " Manufacturing Employment "


*   Reduce " Cost of Materials ", by reducing GST rates from 18 % to 12 %



*   Reduce " Cost of Manpower " , by raising tax exemption limit to Rs 10 lakh

    By increasing " Consumer Surplus " , this will reduce wage-increase demands



*   Reduce " Cost of Corruption " by eliminating corruption ( embedding RFID chip in notes )


*   Reduce " Cost of Inflation " by limiting  " Annual Wages-Salaries Increases " to 75 % of
    the preceding year's GDP number ( ie: if GDP for 2015, is 8 % , maximum salary / wage
   increase that can be granted on 01 April 2016 , will be 6 % ) . 


This mechanism will set in
   motion , a VIRTUOUS CIRCLE , in reduction of CPI / WPI !



In short , we must make ours, a " Low Cost Economy " as far as " Manufacturing Sector " is concerned


But to save jobs , the above mentioned measures won't suffice !


That would require Indians to compete with the jobseekers around the World - compete with the jobseekers everywhere , in their own countries !


It is going to be a " Dog eat Dog world " where it will be " Survival of the Fittest " !


That would require us to turn India into " Back Factory of the World " described in my following blog ( sent as email to NDA Ministers / Secretaries / MPs / MLAs )


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Wednesday, 9 September 2015

" BACK FACTORY " OF THE WORLD ?


China is known as the " Factory " of the World 

India is known as the  " Back Office " of the World 

Can India become the " Back Factory " of the World ?


Wrong question !


Right question is : WHEN can we become the " Back Factory " of the World ?


Answer is " hiding in plain sight " !


This week , an astronaut , sitting in a satellite 400 km above the earth and hurtling through space at 16,000 km per hour , operated a robot on the earth


Earlier , scientists sitting in NASA space centre or  in Shri Harikota space centre , have operated Mars Rovers / MOM ( Mars Orbital Mission ) remotely


From a distance of millions of miles


And soon , astronauts  will be sending emails to earthlings from millions of miles away , using " Space Internet " on their Mobile phones 


Invariably , each such team of scientists , comprised Indians !


So , WHEN can our scientists - and software Start Ups - enable Indian workers , sitting in Hyderabad / Chennai etc , to operate / manipulate , machinery in factories of Europe / America / China ?


I believe this can become a reality by 2020 , if Central Government and State Governments , just get out of the way of our scientists / Start Ups and leave them alone !


Then tell them :

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" You are our next generation of Freedom Fighters . Free our millions from 
poverty / starvation / jobless depression / ignominy / suicides


Like war - ravaged people of North Africa , Indians cannot invade Europe / Australia / Canada , in search of jobs / better life


We depend upon you to bring the jobs to India - jobs such as ,


  *   Operating Machinery in Factories abroad

  *   Controlling Air Traffic at Airports around the World

  *   Operating upon patients in Hospitals , all over

  *   Teaching students in Schools , in remote Africa

  *   Any job that currently requires immediate presence of a worker


And , if you set up a " Back Factory " , you don't need to pay Corporate Income Tax for next 10 years !


Simply register on web site of Income Tax Department as a " Back Factory " owner and file annual " Zero Corporate Tax Return "

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When this happens , 


Millions of skilled Indian workers will operate factories around the World , 
    sitting in , internet connected " Back Factories " in small Indian towns


Foxcon will not need to replace its high-wage Chinese workers with one 
    million robots ( as officially announced sometime back )


    At half the wages of those Chinese workers , Indians will operate Foxcon
    factories , all over the World , remotely !


" Contract Labour Act " will need to be replaced with " Back Factory " Act 


*  " Minimum Wages Act " will need to be scrapped !


*   India will not need to fight with WTO on " Manpower / Service Exports " 


*   " Make in India " will morph into " Make from India " 



I hope NDA Ministers and members of NITI Aayog will ask , Narayan Murthy / Sam Pitroda / Azim Premji / Sundar Pichai / Satya Nadela / Ray Kurzweil etc :



"  How soon can this be done ?  How can you help ?  "

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01  Dec  2016

www.hemenparekh.in / blogs








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