What is the impact of automation?

Many studies have shown a large number of jobs at risk as a result of automation and news of jobs lost from automation are frequent. However despite this automation overall numbers of jobs have remained relatively stable. David Autor in an article in the Journal of Economic Perspectives recently looked into the reasons behind this.

Autor found while jobs have been lost these are mainly routine task jobs that are easily automated. Generally a computer can only replace a task if it is an easily understood and controlled process such as factory line assembly. Even Google’s driverless cars work by a large amount of pre-programming to guide them rather reacting to changing real life events and when a real life situation does not match their data need a human driver to take over. While learning computers are growing as a phenomenon their capabilities in the near future are limited more to predictions which will be right on average but can be horribly wrong as long as we cannot programme common sense. 

In contrast for jobs which require problem-solving skills, adaptability, and creativity he argues technology acts as a complement for these roles and increases the demand for them. In the last thirty years in the US there was a drop in employment for agriculture, labourers, skilled blue collar workers, and clerical/sales jobs. However jobs in the service industry, managers, and professionals/technical workers who use these difficult to programme skills increased in number.

In recent years this has meant some polarisation of the job market with middle-level good jobs like car manufacturing disappearing while there has been an increase in low paid service jobs and high paid professional jobs. Autor found this also led to greater polarisation of wages meaning increased inequality. However this polarisation is unlikely to continue much further as the jobs remaining at the mid-level now tend to combine a mixture of skills which would be hard to split apart to allow automation.

Autor’s final point is if automation does prove to be successful in eliminating a large number of jobs permanently this will change the dilemmas we face in managing out economy today. The chief problem would not be scarcity if we no longer need more work but rather of distribution.

Where do you see the opportunities for new work coming from? What will best ensure we have a highly skilled, resilient workforce to tackle new technology?

Read more about issues like this in our Technology issues paper.

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