The rise of the robot – good for business but bad for employees?
The so-called Fourth Industrial Revolution (4IR), with the rise of robotics, artificial intelligence and big data, is set to drastically change the workplace. While most would agree that these technologies are good news for big business, the impact on employees is much more debatable.
On the plus side, 4IR could improve life in the workplace for employees, ushering in an age of more fulfilling and meaningful work. By automating routine and tedious tasks, employees may be freed up to spend time on more creative and enjoyable work – such as devising new products and developing company strategy. Technology can also make it easier for more of us to work from home, or work more flexible hours. Working how, when and where we want could make us all happier – for example, by allowing us to avoid nightmare commutes in rush hour.
Yet, 4IR brings with it many risks too. Perhaps most concerning, automation and artificial intelligence could lead to significant job losses in the economy. Industries that were once deemed to provide a stable job for life – such as law and accountancy – could become much less secure as automation creeps in.
Giving individuals more ability to retrain will be crucial in the 4IR era – enabling those at risk of redundancy to acquire the skills needed to work in the high-tech, high-creativity jobs of the future. Government clearly has a huge role to play in making this happen, and ensuring we move closer to utopia rather than a high unemployment dystopia.
There is currently a lot of concern about the impact of automation and Artificial Intelligence on employment. The fear is that it will destroy so many jobs that the very notion of employment will disappear. The key point is that although perhaps novel in scale this is nothing new.
Huge numbers of jobs are constantly being destroyed/ceasing to exist – this is part of the process of economic activity, innovation and adaptation, and growth. At the same time lots of jobs are being created. AI and automation are just the latest instance of this process. The key things to focus on are whether there is a balance between employment creation and destruction – are there as many or more jobs created as destroyed – and the pace at which these two processes happen.
Economic theory and all of the history of the last 250 years say that we should not panic. Episodes of technological transformation typically destroy huge numbers of jobs but create even more – what happens is change in the nature of work not the end of work. This time it is largely routine white collar and professional jobs that will vanish along with a number of unskilled and routine production and distribution ones.
We crucially do not know what most of the new jobs will be, although we can guess. The point is to not hinder the process of new job creation through misguided policy. That would mean the two processes of employment destruction and creation would not keep pace and then we would have a problem.
Despite the growing capability of robots and artificial intelligence (AI), we are not on the cusp of a ‘post-human’ economy. Automation will produce significant productivity gains that will reshape specific sectors and occupations. In aggregate, however, these gains are likely to be recirculated, with jobs reallocated rather than eliminated, economic output increased, and new sources of wealth created.
Rather than mass unemployment, the critical challenge of automation is likely to be whether everyone can share in its rewards, or if inequalities of wealth and power are reinforced. As set out in IPPR’s paper Managing Automation, public policy should actively shape the pace, extent, and distributional effects of automation to ensure its benefits are fairly shared.
First, realising the benefits of technological advances will require the managed acceleration of automation. Government needs to provide greater support for firms in all sectors and parts of the country to integrate new technologies, improve management and increase investment. The skills system needs to be reformed to ensure firms and individuals can thrive in an era of greater human-machine collaboration.
Second, the public must be included in decisions on how to inform and regulate the use, and distribute the rewards, of automating technologies, through new institutions such as the Centre for Data Ethics and Innovation. Trade unions should also be important partners in shaping automation and its benefits at the firm and sector level.
Third, new models of collective ownership are required to ensure that everyone has a claim on the dividends of technological change, to enable automation to work for the common good.
New technology offers us greatly improved living standards and a higher quality of life in the future, as it has in the past.
Claims are made of massive job loss: 47% of all current US jobs are likely to be automated in the near future, according to one influential study. But this is disputed by OECD economists who point to flaws in the methodology and interpretation of data. ‘Technological determinism’ anyway ignores the engineering, economic, social and regulatory barriers to adoption of many theoretically possible innovations.
There is no evidence that technology is having a strongly negative effect on overall employment prospects in the UK or on the quality of jobs.
More positively, let’s emphasise how economies work to absorb the benefits of technical progress and generate new ways of earning a living.
New employment opportunities – everything from biomedical engineers to conservation professionals to social media managers – are being created all the time. But it is not just novel types of job. The numbers in older roles such as health professionals, care workers, fitness trainers and even hairdressers continue to rise as demand patterns shift. Such jobs will not be automated any time soon.
Moreover the average skill content of jobs continues to rise while the proportion of jobs in the top three occupational categories has risen from 42% to 45% in the last decade.
Today’s problems more likely relate to shortages of some types of skills rather than a shortage of work to do. We shouldn’t panic that the robots are taking over..