Monday, May 29, 2017
Drones, driverless trucks and the jobs threat; US growth revised up to 1.2%; India failing in job creation
1 Drones, driverless trucks and the jobs threat (Max Opray in The Guardian) Morgan Stanley has forecast that freight operators could save $168bn a year by replacing humans with vehicles that drive themselves with no need for toilet breaks or sleep, and Uber last year bought an automated truck firm with the intention to roll out a global service.
It is a theory that has been put into practice in Australia: Rio Tinto has been relying on a fleet of driverless trucks at its iron ore mines in the Pilbara for years, yielding performance improvements of 12%.
A PWC study in 2015 predicted an 80% chance that Australia’s 94,946 professional drivers of road and rail vehicles would be replaced by automation in the next two decades. The prospect has union officials extremely concerned.
If self-driving vehicles – whether that is lumbering autonomous trucks driving for days without rest or airborne drones zipping across the skies – do push human drivers into unemployment queues, unions want compensation.
2 US growth revised up to 1.2% (BBC) The US economy grew at a faster pace than initially thought in the first three months of the year. The latest figures indicated the economy expanded at an annual pace of 1.2% in the quarter, up from the previous estimate of 0.7%.
The initial estimate had been seen as a blow to US President Donald Trump, who pledged in his election campaign to raise growth to 4%.cHowever, the revised figure still represents a slowdown from the 2.1% growth rate recorded in the final quarter of 2016.
Ben Herzon, senior economist at Macroeconomic Advisers, said temporary factors, such as lower spending on heating bills thanks to a relatively warm winter, restrained first quarter growth.
3 India failing in job creation (Mihir Sharma in Gulf News) Three years ago, Narendra Modi was sworn in as prime minister of India amid much hope and tremendous expectation. But Modi’s tenure cannot yet be judged a success for one central reason: He’s signally failed to create jobs for the desperate young people who gave him his massive mandate.
Three years in, some important steps forward have been taken, including the passage of a landmark reform of indirect taxes. Foreign investors remain bullish on the country. Yet Modi’s jobs record is even poorer than that of the much-maligned Congress government that he replaced. India needs to create as many as a million new jobs every month just to keep up with the growing population.
Under Modi, just over 10,000 jobs a month are being created instead, according to government figures from 2015. The scale of this failure is enormous — especially since it will add to the angry army of already underemployed young Indians.
Modi certainly didn’t worry about political capital last November, though, when he took the puzzling and destructive step of rendering 86 per cent of India’s currency illegal overnight. Far from paying a political price for a decision with a poor economic outcome, Modi and his party were rewarded with another unprecedented victory in state elections a few months later.
Modi seems to realise that he hasn’t moved swiftly enough to create jobs, which could cost him when he runs for re-election in 2019. That may be why his party and government have subtly changed the emphasis of their promises to the electorate. There is much more talk now of protecting cows — sacred to many Hindus — and of defending India’s interests in Kashmir.
No lower-middle-income country can ascend to middle-income status without generating mass employment, which in turn requires a dynamic manufacturing sector. Given the quickening pace of automation, India has precious little time left to ramp up industrialisation.