Skip to main content

Efficiency economics

We are in the teenage years of AI. The playful toddler of 2021 (when models were cute) and the promising childhood of 2023 ( that AI will eventually replace us all) are well past us. Today we have to take the difficult call of whether the replacement of workforce that was promised is to be strategically acted upon. More than the risk of adopting the tech, lies the fear of missing out on the bus, since the wrath of failing to modernise is well documented.

In 2025 alone, around a million jobs were lost to AI (that's what the company's memo read). And there is some merit to it. Many companies have publicly committed their AI investment, and have to now show the result of the massive bills - the unanimous answer to which has been productivity increase. But, such is the story of economics that one lever can be pushed without comprising on another.

Efficiency is simple maths, the output must grow for the similar input (read workforce - and tip your hat to Karl Marx). The sinister side of comes to face when firms, unable to increase output (or attribute the output growth to AI) look at the prospect of reducing the employees. This is fueled by, the growing gamut if strategic activities that firms engage, and a relatively bloated workforce.

The consequences of this efficiency shorthand, is long run economics impact. Downsizing of workforce, in a coordinated manner would lead a systemic rise in unemployment. This one one hand will make the other employees anxious, pushing a culture of fear than excellence. More so as all macroeconomists agree - large scale unemployment is the first sign of upcoming recession. However, this is a unique recession where output is not decreased, but workforce has been squeezed to make room for more profits. 


Economics thinkers have urged governments to prepare for this. Either in the form of a automation tax, levied on industries which are rapidly downsizing their workforce. Or a unemployment cess, that funds lifestyle of unemployed citizens. 

Popular posts from this blog

Changing face of Entertainment

The entertainment industry in India is waiting for yet another disruptive innovation, with millions of young users equipped with gigabytes of data every day, there is a new untapped customer base. Not particularly untapped since it makes do with pirated movies and free web series. But, there is an apparent lack of entertainment streamed towards them. Also, the shift from television sets to mobile devices, sets the stage clear for a change in content. the spikes in porn consumption and adult web series do speak of this unattended guest. The popularity of two platforms, mostly youtube and TikTok, have also helped in developing a new class of actors. To name a few Sumeet Vyas, Jitendra, Bhuvan Bam and much more. It has become apparent that the arduous task of going from one to another production house seeking a side role in a daily soap or movie, is on a decline. Not that, people won't get their debut at soaps and movies, but it seems easier to get a web series and keep working tha...
dive in...

The Theatre Era

As tough times await us, it's frivolous to talk about theatres. But doesn't it look like theatres would go out of fashion before the pandemic ends( But would it ?? ) With the footfall on OTT platforms rising daily. Looking at a screen stuck to the chair, with no ability to pause or even play subtitles, sounds so technologically inferior. The blockbuster release has increasingly been  generously funded , mega-multi-starrer films, which keep running sequels until they go unprofitable . In fact, content is sometimes the second priority; the fan base and the festive season come first. Over the years, movie houses have mastered this art. Roping in top actors into characters that have gone synonymous with their name. The OTT platforms, however, are earmarked for the content. Their promise to give a shot to the aspiring director who doesn't have funds to compete against the mult-million movie releases. Thus i n its cast and crew shines the raw, untamed art which any critic would b...
dive in...

Politics of Perpetuity

There are obvious downsides to democracy. When we look at the distribution of opinion on a particular issue, it generally follows a normal distribution. This implies that to achieve the majority, it's theoretically advised to stick to the centre. And this love for mediocrity makes democracy allergic to politically solid decisions.  Along with it, democracies tend to be the rooster for sweet talkers. And that is an outcome rather than a voluntary trait. Primarily because most voters need to be equipped to deal with the complexities of the field. For example, it could be more practical for an electrical engineer to comprehend medical patterns and the pandemic's effect on production. Thus, democratic institutions need people managers who have two keywords to watch out for - sweet talking and status quo. However, democracies have been hugely popular. And people have reported being happier. Whether this is induced, indoctrinated or influenced is another question. But history has cho...
dive in...