26 Sep 2018

WILL EMERGING TECHNOLOGIES CAUSE FUTURE UNEMPLOYMENT?

Emerging technologies like industrial robots, artificial intelligence, and machine learning are advancing at a rapid pace, but there has been little attention to their impact on employment and public policy.

Two hundred years of breathtaking innovation since the dawn of the industrial age have produced rising living standards for ordinary people in much of the world, with no sharply rising trend for unemployment. Yes, there have been many problems, notably bouts of staggering inequality and increasingly horrific wars. On balance, however, throughout much of the world, people live longer; work much fewer hours, and lead generally healthier lives.

The great economist Wassily Leontief worried that the pace of modern technological change is so rapid that many workers, unable to adjust, will simply become obsolete, like horses after the rise of the automobile. Are millions of workers headed for the glue factory?

Since the dawn of the industrial age, a recurrent fear has been that technological change will spawn mass unemployment. Neoclassical economists predicted that this would not happen, because people would find other jobs, albeit possibly after a long period of painful adjustment.

OPPORTUNITIES

Technologies such as smart machines (advanced robots, machine learning), smart devices (personal computers, laptops, mobile networking, and smart phones), and smart techniques (cloud computing, big data, data analytics) have seen major advancements in the past two decades,1 and promise to have even greater.

These changes have also had a significant implication for employment. The technology industry has created millions of “digital jobs” directly, for people involved in ICT production and for advanced users, who use specific software and tools as a main element of their work, irrespective of the industry. But the larger impact has been, and could be through the use of digital tools. Everything from the simple mobile telephone to online work platforms has allowed more people to connect to work.

The proliferation of cheaper and more capable technology globally has allowed more people to gain access to digital tools that allow them to connect better to resources. A range of digital tools enable buyers and sellers of various goods and services to transact their business with greater efficiency and transparency. This includes the mobile telephone, which is well documented as allowing various workers to find information on prices better (e.g. farmers or fisher folk). This also includes electronic payment services, for example, that improves the reliability of financial transactions irrespective of location of the buyer or seller. E-Commerce has also begun to have significant impact. In China, village economies have changed and begun to create jobs outside of agriculture because SMEs could sell other products such as furniture or handicrafts through Taobao, the consumer-to-consumer arm of Alibaba.

As the Internet and mobile networks have become widespread, they have become a medium to match workers with jobs or tasks at different geographic levels. At the city level, these matching services have helped to unlock unused rooms in homes (e.g. Airbnb), connected car-drivers with customers (e.g. Uber), and created markets for “gigs,” where a person undertakes specific and time limited tasks that are typically non-tradable (e.g. picking up groceries or delivering packages).

CHALLENGES

The emerging consensus is that technology will complement workers in every job of the future, and some of today’s jobs will likely be substituted by technology. This means that the jobs of the future will be either digital jobs or jobs that use digital tools. Hence, there are growing concerns about whether the adoption of improved and lower-cost technology by businesses and governments could have negative impacts on employment or lead to inequality, allowing some part of the population to benefit greatly, while others might find themselves with limited economic opportunities.

Experts disagree on the size of the impact that automation technologies will have on the workforce.  While some warn of staggering unemployment, others point out that technology may create new job categories that will employ displaced workers. A third group argues that the computers will have little effect on employment in the future.

As technology becomes smarter, it is likely that entire jobs or a subset of the skills embedded in a job might be digitized. For example, advances in office technology since the 1980s have meant that few businesses hire typists any more. The responsibilities of clerical staff have had to shift, often along with their wages.

It is possible that jobs and tasks previously thought of as un-automatable could become digitized in the future. One widely cited study on this trend suggests that “about 47 percent of total US employment is at risk” from computerization. They divide jobs into “high, medium and low risk occupations, depending on their probability of computerization.” Notably, they “focus on potential job automatability over some unspecified number of years.” This echoes other studies that suggest that some share of occupations of today will not exist in the future.

It is critical to note that the elimination of specific types of occupations does not mean that those many people will be out of work. This is because some of those who were working in those occupations will transition successfully to other jobs.

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