COMPASS MAGAZINE #10
COMPASS MAGAZINE #10

THE FUTURE OF WORK With automation poised to put millions out of work, economists debate if growth can create enough new ones

Since the 1970s, automation has eliminated the jobs of millions of bank tellers, retail cashiers, travel agents, airline front-desk workers and manufacturing employees. With the jobs of truck drivers, airline pilots and even medical doctors now at risk as well, it sometimes feels as if every human job except those of computer coders is destined to disappear. Compass examines the jobs at risk and the forces at work.

A pair of unusual trucks plies the highways in the US state of Nevada and along the German autobahn near Stuttgart. Although they look similar to most 18-wheel rigs on the road today, these trucks have a unique driver in the cab: an autonomous, computer-guided system dubbed Highway Pilot that steers the trucks without help from the human in the front seat.

So far, these ultramodern trucks made by Germany’s Daimler Trucks are only test vehicles; the humans are there in case anything goes wrong. Most highway regulations still only permit fully autonomous vehicles on the open road with humans near the controls. Once enabling legislation is passed, however, Daimler expects trucks based on these prototypes to be operational by the end of the decade, Stuttgart-based Daimler spokeswoman Uta Leitner said.

Repercussions for the future employment prospects of the approximately 7 million truck drivers now working in the US and Europe remains an open question: Will self-driving vehicles cause these jobs to disappear, following in the wake of elevator operators replaced by push buttons, bank tellers displaced by ATM machines and travel agents made redundant by online booking services? And what of other jobs that can be done by powerful computer algorithms, from medical diagnosis to automated coordination of rooftop power generating stations?

“If your job is repetitive, if it doesn’t require creative thinking, if you can write it out as a process, it’s at risk of being taken over by a bot or by a robot,” said Jacob Morgan, author of The Future of Work. “There’s a bit of fear there, and should be, so employees have to think about retooling themselves.”

INDUSTRIAL REVOLUTION 4.0

Since the Industrial Revolution began replacing workers with machines in the late 18th century, technology has been changing the nature of work. For every painful job loss, however, the economy generally created one or more new jobs in more advanced industries. Displaced workers had to retrain for the new jobs, but jobs still existed for those willing to learn new skills.

Now, however, due to a confluence of cutting-edge technologies – artificial intelligence, robots, automated big data analysis, the Internet of Things, nanotechnology and 3D printing, among others – many experts believe the world is at an important inflection point that may change work so dramatically it will become virtually unrecognizable. For example, in the not-too-distant future, there may not be any need to move goods at all, even with self-driving trucks; everyone will make their own products at home with downloaded 3D models produced on 3D printers – perhaps also displacing all of those factory robots that previously displaced their human counterparts.

Many believe the dystopian model is most likely. For example, a recent study of human resources executives from major multinational corporations worldwide, unveiled at the 2016 World Economic Forum (WEF) in Davos, Switzerland, predicted 7.1 million job losses in the next five years, two-thirds of them in office and administrative jobs eliminated by automation. Saying that the world is entering a Fourth Industrial Revolution – steam power, electricity and computers accounted for the first three – the study predicted that technological improvements and economic growth will create only 2 million new jobs – a net loss of more than 5 million jobs in five years.

7.1 MILLION

The number of jobs predicted to be eliminated in the next five years, according to a report given at the 2016 World Economic Forum in Davos, Switzerland. Economic growth, the report projects, will create only 2 million new jobs, a net loss of more than 5 million jobs in five years.

“The global workforce is expected by our respondents to experience considerable churn between job families and functions, with administrative and routine office functions at risk of being decimated” and strong growth in computers, mathematics, architecture and engineering, according to the WEF study, which surveyed human resources executives at 371 of the world’s largest companies.

Jerry Kaplan, who founded GO Corp, a pioneering tablet computer company, in 1987, and later studied the impact of technology on employment, worries about the trends he sees. Kaplan predicts that, while this round of technological change likely will yield a number of long-term economic benefits, the short-term impact may be brutal.

“Recent advances in robots, machine learning and computers are enabling a new generation of systems that rival or exceed human capabilities,” said Kaplan, author of Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence. “There are two reasons: the rate of innovation in automation is increasing, and there have been some significant advances in artificial intelligence.” While society will benefit from many of these changes, “we may be in for a protracted period of social turmoil.” 

PROFESSIONALS IN PERIL

As an example of the kind of sea change likely in the next few years, Kaplan cites medical doctors and airline pilots, professionals whom most people assume are not easily replaceable. But Kaplan said that robots are already performing some types of delicate surgery and that algorithms are better at diagnosing many diseases than humans, while automation aboard airplanes has a far better safety record than human pilots.

Martin Haegele, head of robot and assistive systems at the Fraunhofer Institute for Manufacturing, Engineering and Automation in Stuttgart, Germany, said he expects robots in workplaces to become even smarter and more flexible than the current models, which today are mostly limited to performing one repetitive task on factory floors. Their successors will have bodies that look like the upper torso of a human with arms. These robots will work collaboratively with humans, who can train each robot by guiding it through its tasks – no programming required.

Technological changes are also likely to lead to what author Morgan refers to as “the freelancer economy” and that others call “the Uber economy,” named for the freelance car service, which has prompted widespread protests by cab drivers in several cities, reminiscent of the Luddite protests by 19th century English textile workers displaced by automated looms. Due to innovations such as smartphones and the internet, Morgan said, freelancers can work as much or as little as they like, without being constrained to an office. As a result, he predicts that companies will replace as much as half their workforce with freelance workers whose output can be easily monitored and rewarded, lowering overhead – and eliminating the negative publicity of announcing layoffs in down cycles.

THE OPTIMIST VIEW

Not everyone shares a gloomy view of the future employment picture, however. Guy Michaels, an economist at the London School of Economics, published a study in 2015 that looked at employment in 14 industries, mostly in the manufacturing sector, that had introduced robots. He found that while the robots caused some job losses, new employment in those industries mostly balanced out the layoffs, though it was impossible to tell if displaced individuals fared better or worse economically. The companies were located in 17 countries.

“There will be people who are displaced from their jobs, and not all of them will find equivalent jobs,” Michaels said. “That doesn’t necessarily mean on a net basis there will be job losses. If consumers are better off, they can spend more. Firms can design other products and can take advantage of automation. We see rising productivity and wages, but not much change in terms of overall employment.”

The advance of technology, Michaels said, affects job categories differently. For example, the industry known as information communication technologies – which includes the mobile web – tend to benefit college-educated workers without seriously impacting high school graduates; instead, significant job losses hit those in a middle category: people with some university education, but not a degree. Robots, on the other hand, mostly replace low-skilled, high school-educated workers, he said.

“IF YOUR JOB IS REPETITIVE, IF IT DOESN’T REQUIRE CREATIVE THINKING, IF YOU CAN WRITE IT OUT AS A PROCESS, IT’S AT RISK OF BEING TAKEN OVER BY A BOT OR BY A ROBOT.”

JACOB MORGAN AUTHOR, THE FUTURE OF WORK

While some economists say a slowdown in innovation is likely, minimizing the risk of wholesale job displacements, others – including Massachusetts Institute of Technology (MIT) economists Erik Brynjolfsson and Andrew McAfee – argue that the plummeting costs of digital devices, coupled with the increased availability of analyzable big data from millions of smart, connected devices, means that innovation is expanding at a “rapid exponential pace,” faster than anything humanity has experienced in the first three Industrial Revolutions.

They note, for example, that automotive experts in the year 2004 expressed doubt that self-driving cars would ever be technically possible. Only a decade later, however, Google had combined existing technology, including satellite maps of roads, sensors on cars and massive computational power, to produce a working autonomous vehicle. Subsequently, in a one-week period in January 2016, General Motors announced a US$500 million (€439 million) investment in car-sharing service Lyft and plans to build a fleet of self-driving cars, while US President Barack Obama’s administration announced that it would invest US$4 billion (€3.5 billion) over 10 years to ensure that these autonomous vehicles are safe when they reach the highway.

THE ECONOMICS OF EFFICIENCY

Brynjolfsson and McAfee note that while the overall economies of developed countries have been growing at a steady pace, the growth has not applied equally to all workers. Eastman Kodak, which once employed 150,000 people, went bankrupt because demand for film cameras collapsed. Instagram, born from the digital camera revolution, moves billions of digital photographs a year, but employs only a few hundred people.

Going forward, the employees who will most enjoy the benefits of digital productivity increases will be technically trained professionals – but no one is certain how many displaced workers will be able to acquire the skills to transition into these jobs, or who will pay to retrain them.

Despite some dire predictions, most economists agree that humans will always be needed to design, program and oversee robots and other forms of automation. Even if the number of low-skilled jobs declines, demand for highly skilled workers is likely to soar in the years ahead. Whether these jobs will be sufficient to replace those lost to automation, however, is likely to be hotly debated for many years to come.

“I’m quite optimistic about the future of jobs,” Ellyn Shook, chief leadership and human resources officer at consulting firm Accenture, said in a recent webcast about the future of work. “It’s all about digital disruption. But humans are at the heart of digital disruption. The behaviors that humans have around emotions and creativity are not things that are going to be replaced by machines.”

by Charles Wallace Back to top
by Charles Wallace

Related reading from The New York Times: If robots take all the jobs: might humans be paid not to work?
http://bit.ly/PaidNotToWork
 
See why technology will eliminate 45% of today’s jobs
http://bit.ly/JobKillingTech