New Urban Agenda; jobs for all, equality crucial

The New Urban Agenda adopted at the Habitat-III in Quito last month is a visionary, concise, forward looking, actionable document which will guide national, sub-national and local governments during the next two decades in building better habitats for the world population.

 

 It aims to ‘readdress the way we plan, finance, develop, govern and manage cities and human settlements…’.The document strives and commits to work towards inclusive, sustainable cities with rights for all to a safe and prosperous life. It realizes that as a means to this end, all need to have adequate, regular incomes. This realization is reflected in a number of points and sub-points across the document.

For example, under ‘Our principles and commitments’ at serial no. 14 (b) it says “…by promoting full and productive employment and decent work for all by ensuring the creation of decent jobs and equal access for all to economic and productive resources and opportunities…”.This commitment, while indeed laudable, may prove the greatest challenge because while it is central to the theme of equity, inclusion and sustainability, the economic forces of the free world are loaded against it.The challenge is starker in the context of the developing countries where poverty and inequalities are grinding and widely prevalent.It is not because this objective is not well chosen or articulated, or because we are incapable of working towards it. It is simply because new forces of technology and digitization are pulling in the opposite direction.

Jobs for all is a crucial narrative receiving sharper focus in view of the demographic dynamic of our population.With about 50 percent of the country’s population below the age of 25 and nearly 65 percent below 35 there is an urgent need to effectively harness the energies of this vast population. They need jobs and incomes.Let’s look at the macro trends. India’s share of agriculture in the GDP (15%) and in employment (61%) remains higher than world averages but continues to decline, displacing many farm and farm-related jobs.Globally, the share of agriculture in the economy fell from 6.4% in 1995 to 3.0% in 2010. Its share in employment fell, while still very high, from 41.8% to 33.1%. In India, government is pushing manufacturing through initiatives such as ‘Make in India’. Organised manufacturing however is now being overwhelmed by a huge technological onslaught which hinges on automation of processes on the shopfloor. Robots are increasingly taking over repetitive, precision operations and the trend will continue. Nearly 1.5 million such robots are estimated to have been deployed in 2015 worldwide. As per a May 2016 BBC News report a large electronics assembler replaced 60000 workers by robots in its China factory.Digital transformation, calls for rapidly enhancing productivity and cost-cutting imperatives in an ever competitive market place are resulting in a race to the bottom as far as lowering production costs is concerned. Manufacturing, it seems presents few prospects for absorbing workforce in large numbers.

What about services? World over and in India, the share of services in manufacturing and employment is the highest. But what are the prospects for employment? In the case of banking, rapid technological advances-internet banking and the proliferation of ATMs means fewer branches (and therefore fewer employees) will be required. Large numbers of accountants who filled out our tax returns are no more required, thanks to many apps in the digital marketplace. Net enabled distance learning and online computer based testing in exams can over time get rid of many teaching jobs.

Policy makers chase economic growth in order to provide jobs and livelihoods to the struggling millions. But what is the reality? Mr. Sidharth Birla former President of FICCI writing in the Hindu BusinesslIne says, “despite the economy growingat a good pace, employment seems to have grown meagerly, at 4.1 percent and 0.3 percent in FY 14 and FY 15…core sectors had negative employment growth in FY 15.” So economic growth seems no guarantee for more jobs.

Another well-meaning objectiveof the NUA is inclusive development where the benefits and opportunities are shared by all equitably thus reducing inequalities. But what is the reality? Digitization and technological advances are resulting in an increasing gap or disparity among various classes of citizens; in income, wealth and other determinants of well-being. In simple terms, the rich are getting richer. The poor may or may not be getting poorer. A very recent Credit Suisse Report quoted in Live Mint says that in 2016, the top 1% of India’s population has 58.4% of the country’s wealth up from 53% last year. In 2000 the top 1% had just 36.8% of the wealth. Globally too, China’s top 1% account for 43.8% of wealth and in Russia a whopping 74.5%. Why? Take the example of the tax filing app. The entire income from this activity is now acquired by the developer/s of the app and his few employees rather than the thousands of accountants. In this manner, technology is redistributing income and wealth and enriching a few (app developer) in place of several thousands (accountants). In other cases, new technologies may re-distribute wealth from one set market participants to others; for example in the e-commerce space, brick and mortar retailers may lose out to logistics providers. Some say that technology, innovation and productivity gains have ensured that all are better off. Households spend a smaller proportion of income on essentials like food, clothing, footwear and gadgets than before and hence are better off. So what if the rich are much better off? However, one needs to consider that other vital needs like education, entertainment and healthcare are far more expensive now. Housing is the most glaring example of a vital need gone out of the reach of many.

Disruptive technological advances driven by entrepreneurship, innovation and emerging opportunities will be sustained and relentless. A Deloitte report London Futures on the subject argues “A widening gap between ‘haves’ and ‘have-nots’ is also a risk as lower skill jobs continue to disappear…Deloitte has called for the appointment of a city-level Chief Talent Officer to coordinate a strategic response.” It further adds “Looking forward, agility seems to be the key; an agile workforce with the skills to adapt to fast-changing job requirements.”  Policy makers need to ensure sustained and sharper focus on education and skilling/re-skilling, using contemporary methods and content so that large populations remain relevant and employable. Innovation and complex problem-solving and higher level skills are to be imbibed. Adequate and well targeted allocations for basic services like affordable housing and healthcare in addition to education will protect vulnerable sections in times of stress.  These and more proactive measures will help realize the vision of the New Urban Agenda and the SDGs.