Eamybeg, Buck, Penrod, Waterboy, and Bellgriffin were the last in their batch to lose their jobs to a big technology transition 103 years ago. According to a blog on Microsoft.com, on December 20, 1922, a sleek motorised engine formally replaced the horse-drawn one, creating an emotional moment for the station crew at New York’s Brooklyn Heights who could do nothing for their equine co-labourers. As horses vanished from a variety of other professions, so did the numerous jobs that relied on the horse economy. In 1890 there were 13,800 companies in the US in the business of building carriages pulled by horses. By 1920, only 90 such companies remained. By some estimates, that number has come down to single-digits now. Even as the horse industry collapsed under the burden of technology, another industry came to life. In 1903, the year Henry Ford founded Ford Motor Company, 11,235 automobiles were sold to Americans. That number went up to millions subsequently. 

The US auto industry created new companies and jobs — and a lot of them. That cycle has been never-ending, which is both sobering and encouraging at the same time, especially when it comes to the impact on future jobs. It’s sobering because there are so many factors that genuinely are unpredictable in a technology’s infancy. It’s encouraging because new technology invariably spawns new jobs as industry finds new ways to work with. For example, think of the supplementary industries that were created by automobiles. Filling stations, automobile repair, auto showrooms. And then, of course, the possibilities of living further from work, enlarging your housing by moving out where land was cheaper than it was in the central city. And then vacations. With automobiles, you could go to many more spaces. Or, consider the introduction of the personal computer and then, after it, the Internet, and now, mobile phone-based computing and smartphones, which has destroyed some jobs but created many others. There have always been fears of mass destitution with each sudden shift in technology, but the so-called losers have eventually been absorbed back into new industries. Also, research from the McKinsey Global Institute has concluded that, indeed, the application of these technologies will force millions of workers to acquire new skills, as the jobs they perform are rendered obsolete. 

Yet, rapid advancements in the same technologies will create new opportunities for millions of workers, including many less-skilled ones. So when Microsoft chief Satya Nadella says while artificial intelligence (AI) is likely to displace certain jobs, it will simultaneously create new opportunities and facilitate accelerated learning, he is bang on. In a media interview, Nadella suggests that labour markets are dynamic entities capable of adapting to technological advancements. For instance, the World Economic Forum predicts that by 2025-end, AI will have displaced 75 million jobs but will also have generated 133 million new ones. That would be a big relief for a country like India which can’t afford job cuts as employment itself is scarce. The Economic Survey of 2023-24 indicated that we need to generate approximately 7.85 million jobs annually in the non-farm sector until 2030 to harness our demographic dividend. The FICCI-EY Future of Jobs 3.0 Report 2024 has pointed out areas like healthcare and energy which have seen massive changes in the way they function, leading to a surge in demand for tele-medicine specialists, healthcare data analysts, and AI-driven diagnostic experts. 

The energy sector’s sustainability transition is creating entirely new career paths. Solar energy technicians, smart grid managers, and carbon footprint analysts are becoming integral to the industry. As the Union Budget draws near, the government can draw lessons from successful examples from different countries in Europe on how they helped laid-off workers learn new skills so that they can be re-employed quickly. Take Sweden and Germany. They offer a similarly comprehensive suite of services to help displaced workers transition into new jobs, but they do it differently. In Sweden, it’s a private sector-led model, and in Germany, it’s done through the government, through public labour agencies. In Sweden, the worker-security councils are a system in which employers pay a small amount per worker into a private fund so that if the company downsizes and a worker is laid off, that individual goes to the worker-security council and they get a whole suite of services. And this is all privately run, but they get job retraining if they need it. They find out where other job openings are, what do they need to do to apply. It goes beyond simply providing income support to actually helping individuals find their next job. Germany has had a very successful government-run system that operates in many ways very similarly. Reforms that were implemented in the early 2000s, the so-called Hartz reforms, have enabled the country to reduce what was a relatively high unemployment rate, over 11%. 

The Indian dilemma is well captured in the QS World Future Skills Index 2025 report released last week. The country was ranked second in terms of preparedness for jobs of the future including AI and green skills, only behind the United States. There are, however, some parameters where India performed poorly. In terms of “skills fit”, India scored 59.1, which is the worst among the top 30 countries overall. While the analysis gave India a full 100 marks on account of economic capacity, the country fared the worst when it came to the parameter of future-oriented innovation in sustainability, both of which are sub-parameters under the larger umbrella of “economic transformation”. Here, India scored just 15.6 out of 100. In comparison, the G7 countries scored 68.3, EU countries scored 59, APAC countries scored 44.7, and African countries scored 25.4. Overall, India scored 58.3 on this parameter, which is the lowest among the top 30 countries overall. So major public investments are needed for education and skill-based training. This is necessary as employers expect 39% of key skills required in the job market will change by 2030. There should thus be a growing focus on continuous learning, and upskilling and reskilling programmes. 

It’s a fact that global Google searches for “is my job safe?” have doubled in recent months, as people fear that they will be replaced with large language models. The fear can only be minimised through public investment in digital skills for a large number of people, as well as digital highways that allow regions to participate in new economic opportunities.