Three Transformation Stages
The technological progress over the last century has undergone a slow but definite transformation. This can be categorized into three different stages viz. craftsmanship, mechanization and automation (Datta 1990). Each of the stages had an influence on the nature of work and the skill level required to perform a job. The early craftsmanship was characterized by the worker/craftsman having control over the entire production process, from procuring the raw materials to the finished goods. This required end-to-end knowledge, where the worker got involved in activities right from pitching to potential customers to delivering the final produce/service. Each product/service could be characteristically unique as each reflected the skills of the employee. This model of operation can still be found in some of the present day service firms, what are termed as Service Complexes and Service Shops (Davis 1999). The second stage of mechanization was brought about by the application of principles of scientific management where tasks were broken down to simpler and specialized ones for large-scale production of standard goods, and methods of estimating a 'proper day's work' for the worker were developed. This required a complete reorganization of the methods of production. The role of the individual worker transitioned from a highly skilled one in the craftsmanship era to being considered one of the 'factors of production'. Mechanization also created a new portfolio of occupations such as engineers to design and produce the mass production machinery, the machine builders and tool makers and a wide range of skilled machine operators. The third stage of automation not only carried forward many of the features of mechanization but also qualitatively changed the way the worker undertook his/her job. The worker no longer directly got involved in the production process but monitored and maintained machines and helped in trouble shooting. This necessitated the worker understand the production process and the machinery rather than using his skill to turn out a product.
Technological change especially through automation has both advantages and disadvantages (Datta 1990, Datta 1996). Automated systems allow few skilled individuals to do the work, which previously required numerous unskilled and semi-skilled workers. They also allow tasks that are beyond human capabilities or those dangerous or monotonous jobs that would be considered inhuman for people to perform. Further the labour intensive ways of production are expensive and restrict the market for the product, which has a negative effect on the employment in the long run. Automated systems tolerate few or no errors and hence lack the inherent human flexibility in production.
Technology need not be restricted to just technical automation but can also involve a whole package of resources like capital, entrepreneurship and management (Virmani 1990). Further, technology as such is not quantified but what is quantified are those relating to its manifestations like a particular technique of production, productivity of a particular input, scale economics etc (Majumder 2001), e.g. in Singh & Nandini (1999) technological change at the firm level is operationalized in terms of R& D expenditure, technical collaborations and quality certifications, while Dhanaraj (2001) has taken gross fixed assets and value of plant and machinery to assess the impact of technology on worker wages.
With the liberalization of Indian economy in 1991 a number of private players started carving a major role in the economic output and simultaneously governments both at the centre and state levels started assuming a smaller role in running businesses. Increased domestic and foreign competition resulting from the economic reforms induced domestic manufacturers to improve efficiency and bring into use advanced technologies on a larger scale (Goldar & Kumari 1999). …