Industry 4.0 and Gig Economy: The Future of Work and the New Labour and Industrial Regime
Written by: Anubhav Seth
The Fourth Industrial Revolution is referred to as “industry 4.0.” This is the era where “smart gadgets” will have a significant level of control over manufacturing and distribution systems. During the first two industrial revolutions, India did not farewell. However, due to increased access to technology, better connectivity, and the expansion of computer resources, the country benefited to a certain measure during the Third Industrial Revolution. Thus, it is critical that India prepares itself to gain from the Fourth Industrial Revolution, which is underway.
India has made some headway in incorporating new technologies into many sectors, and digitalization is progressing in a variety of businesses; however, the amount of penetration differs depending on sector needs. The Indian job market will be revolutionized by technological innovations, globalization, exponential technology use, and demographic shifts.
Some analysts, however, believe that the adoption of industry 4.0 technology, notably automation, might result in job losses. Others argue that it will not only not result in job losses, but it may also not result in an increase in jobs. As a result, coordination amongst stakeholders—particularly industry, government, and academic institutions—is critical to making progress under Industry 4.0.
WHAT IS INDUSTRY 4.0?
The term “Industry 4.0” was coined to describe the digital revolution that had taken place in the German manufacturing industry. Individualised production, horizontal integration via collaborative networks, and supply chain integration are the foundations of this new industrial model. Though technological advancements may not be a fundamental revolutionary shift in themselves, however, their influence on production and distribution adds additional value to the product. It impacts international relations, the functioning of institutions, and, inevitably, society.
The 21st Century is characterized by the digital revolution, which is based upon the giant economy found on artificial intelligence and algorithms. The digital revolution, which is based on the huge economy, artificial intelligence, and algorithms, has characterized the twenty-first century. The partnership between man and technology characterizes the labour pool of the twenty-first century, resulting in a high level of wellbeing for all countries.
We might even say that neither politics nor governments, but it is the economy that binds us globally at the present, and the gig economy foresees the impact of industrialization and the opportunities it may offer. The gig revolution brings to the surface issues that may be turned into opportunities, but it takes innovation and the right human capital strategy to achieve a maximum advantage while mitigating potential threats of the revolution.
The gig economy is a reaction to the system’s routine and structure, which has resulted in the gradual loss of the imaginative and innovative spirit of the human capital. The term “gig economy” refers to recent developments in the global labour market, as well as to the response to full-time work. Giggers choose to work on a contractual or part-time basis rather than signing up for a long-term relationship.
With technological advancements taking place, the number of opportunities to improve welfare using technologies has also grown substantially. Independent workers may now readily interact with employers all around the world, this is so because the internet and intelligent programs have become intermediaries between these two groups.
One of the driving forces behind the global expansion of the gig economy is a continuous technological advancement that supports and enhances the ways of adaptation and inclusion in the labour market. As a result of these factors, and the assets provided by the gig economy, the number of jiggers is increasing steadily, thus compelling the recruitment and hiring industry to develop alternative systems to substitute employment structures.
PREVIOUS THREE INDUSTRIAL REVOLUTIONS
Water and steam power sparked the First Industrial Revolution, which highlighted the shift from human labour to mechanical manufacturing. After analyzing developments from 1760 to 1840, Toynbee (1884) created the phrase “Industrial Revolution.” The culmination of the 18th century was marked by this time period. This time period represented the end of the eighteenth century. Electric power was used to assist mass manufacturing based on the division of labour during the Second Industrial Revolution.
It occurred during the turn of the twentieth century. Electronics and information technology were utilized to automate production during the Third Industrial Revolution. It started in the early 1970s. The present trend of automation and data interchange in industrial technology is known as the Fourth Industrial Revolution. IT, electronics, and robots constitute the main technologies of Industry 4.0. It also embraces other technologies like biotech and nano-tech. It is undeniable that it is founded on a cyber-physical system (CPS).
It may be helpful to take a holistic approach towards understanding Industry 4.0 as the Fourth Industrial Revolution by examining three major aspects of each revolution: technological advancements, economic scenarios, and demographic factors. The key technologies of each revolution must be examined in terms of technological advancements. The term “economic scenario” refers to the availability of capital and market trends. Demography is considered as the revolution’s driving force because it impacts consumer demand and the labour supply market.
In recent years, a new set of technologies has developed. This is the point of the Fourth Industrial Revolution. The Fourth Industrial Revolution has arrived at this moment. The drive to innovate has created a dynamic market, meaning that competitive advantage is no longer permanent. It puts pressure on businesses to embrace new technologies on a regular basis.
FUTURE OF WORK
India is the sixth-largest manufacturing country, given its strong focus on Industry 4.0 through the “Make in India” plan for future development. The government has introduced a number of policy reform measures, including the adoption of the GST and the liberalization of the FDI policy. Industry 4.0 offers the Indian manufacturing industry on the whole a huge opportunity. India is currently trailing behind its international rivals in terms of Industry 4.0 implementation.
A significant portion of the manufacturing industry is still in the post-electrification phase, with technology confined to systems that operate independently of one another. The core concept of Industry 4.0 is still in its infancy, with the integration of physical systems on a cyber platform. More importantly, the micro, small and medium enterprises (MSME) segment has very little access to modern technology due to its high cost.
In India, several industries are undergoing digitalization. However, the amount of penetration varies depending on the sector’s needs. To take advantage of technology, several of these businesses are experimenting with or developing small-scale Industry 4.0 solutions. Nevertheless, capital-intensive businesses that demand highly trained workers, such as the automobile industry, are leading the way in terms of implementation.
The Indian automobile sector is at the forefront of implementing Industry 4.0’s core features Automotive companies have been compelled to embrace important components of Industry 4.0, such as robots, due to evolving technology, an expanding number of parts, greater competitiveness, and rising labour costs. Additionally, several automobile OEM (Original Equipment Manufacturer) and auto component manufacturers are developing prototypes utilising additive manufacturing/3D printing in their R&D centres.
NEW LABOUR AND INDUSTRIAL REGIME
Nearly three decades after the economic liberalization, India has adopted labour laws that amount to a jump from a primitive age to a gig economy. The 41 laws that have been combined into four new codes on wage, social security, industrial relations and occupational safety are a reaction to two inevitable forces:
- The first is the need to bring tens of millions of employees out of the catacombs and legitimise their contributions to the economy, enabling them to qualify for social security benefits.
- Second, the laws acknowledge that digital involvement in our workplaces, factories, and homes is transforming the nature of work, and that we must adjust.
The disparity between India’s old labour rules and its new economic environment has cost the country dearly: recruiting qualified employees has been more expensive, and inequalities in pay for identical work have enraged employees. These and other anomalies will be dealt with by the codes. A total of 470 million employees, many of whom are women in the unorganized sector, would benefit.
Amongst the key ideas behind this change, the most prominent measure is the new status of employment known as ‘fixed term’ or ‘on demand’ workers in the gig economy. In a model known as that of ‘portable benefits’, fixed-term workers will be entitled to the same social security benefits as those given to permanent employees. This fundamentally narrows the unorganized sector’s frontiers, bolstering programmes like the opening of bank accounts, which draws millions of more people into the formal economy. Social welfare, from a philosophical standpoint, is offered to the half of our population who are disadvantaged by poverty or opportunity.
The codes take a ‘jobs-first approach, focussing on the needs of businesses to serve the needs of individuals and the economy. The business will gain the flexibility long denied by the cost and rigidity of ‘permanent’ recruitment, even if the cost will be higher employer contributions to social security. The codes adopt a ‘jobs-first policy, recognizing the role of businesses in catering for the requirements of individuals and the economy. Businesses will gain the flexibility advantages previously they were deprived of due to the cost and rigidity of “permanent” recruitment, even at the cost of increased employer contributions to social security.
The second main notion is the future of work. The pandemic, which has caused millions of individuals to work from home, is a tangible and personal example of how individual circumstances have transformed, making the law timely and pertinent. Work today is more networked, susceptible to upheavals, project-based, and involves several employers over the course of a career. The idea of having a single job and employer for the rest of one’s life is a thing of the past. Lifelong learning and skill up-gradation is the new workplace lifeline. The pandemic has heightened the need for businesses to redefine work and employment.
The codes are especially pertinent to the Indian service sector, as we progress towards the next version of business organisations, broadly termed Industry 4.0. The internet economy’s aggressive expansion will continue to generate more service jobs, which account for 55 per cent of GDP. Foreign investors looking to invest in Indian manufacturing should rejoice.
The rigidities of recruitment, the reign of labour inspections, and the chess-games of collective bargaining that have often priced out investment, have been replaced with a lexicon that is clear and a compliance regime that is digital, remote, and with risk assessed on the basis of self-declaration and a record of prior violations.
Only enterprises with more than a certain number of employees were subject to laws that suffocated management and stifled free enterprise under the previous regime. Manufacturing’s response was to take advantage of the flaws. Governance will improve once again as a result of simplification. There are several gaps that will hopefully be filled. Labour is a matter that both the federal and state governments are interested in. The new codes will need to be ratified by state governments before they can be enforced.
However, despite the boldness of the regulations, businesses would have preferred more flexibility in industries with seasonal peaks, such as exports. The new rules encourage a nation that is forward-thinking. Investors, companies, and workers stand to benefit the most from all of this as they cooperatively redesign the worker-company relationship on the path to a digital future.
About the Author
Student at Vivekananda School of Law and Legal Studies, VIPS.
He traces his academic roots from majoring in CBSE Class XII Commerce from Lancers Convent Senior Secondary School, Delhi. His areas of interest and research work are Constitutional Law, Criminal Law, Corporate Law, Intellectual Property Rights, and International Laws.
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