Can automation create more jobs than it destroys?

Some experts believe that automation will destroy jobs. Others feel it will create more, new, better jobs. Here's how businesses can prepare for the shift.
19 September 2018

Will robots take away more jobs than they will create? Source: Bosch

In the early days of artificial intelligence (AI) and robotics, people didn’t think the technologies could achieve much.

Over time, as the technologies matured and proved their capabilities, workers and executives have been concerned with how these could ‘automate’ tasks and destroy human jobs — and that’s been the focus of numerous studies, irrespective of which industry or country it reviewed.

However, according to PwC Chief Economist John Hawksworth, just because a job has the technical potential to be automated does not mean it definitely will be.

“There is a variety of economic, political, regulatory and organizational factors that could block or at least significantly delay automation,” said Hawksworth in a recent blogpost for the World Economic Forum (WEF).

It is Hawksworth’s theory that AI and robotics will boost productivity, reduce costs and improve the quality and range of products that companies can produce.

However, in order to stay competitive, companies will have to pass on the gains to customers in the form of price cuts — which will raise income levels in society and help boost demand. To meet that increased demand, Hawksworth feels that new jobs will be created.

PwC considers the UK to be representative of the OCED as a whole and studied the impact of automation on jobs and made some forecasts for the future.

Numbers revealed that the estimated net impact on jobs is broadly neutral, with around 7 million jobs (20 percent) projected to be displaced in our central scenario but a similar number of new jobs being created.

While Hawksworth and PwC’s finding might be complimentary, there’s other research that suggests not all the new jobs created will have the same level of income, earnings, or benefits.

In the transportation industry, for example, this is a reality that is fast approaching according to a recent study published by UC Berkeley.

“Autonomous trucks could replace as many as 294,000 long-distance drivers, including some of the best jobs in the industry. Many other freight-moving jobs will be created in their place, perhaps even more than will be lost, but these new jobs will be local driving and last-mile delivery jobs that offer lower wages and poor working conditions,” said Dr. Steve Viscelli, a sociologist and trucking expert at the University of Pennsylvania.

A study by the National Bureau of Economic Research issued last year reviewed the increase in industrial robot usage between 1990 and 2007 on US local labor markets and found that robots definitely reduce employment and wages. In fact, it estimated that one more robot per thousand workers reduces wages by 0.25-0.5 percent.

Truth be told, at this point, experts can only guess the level of automation that industries will be comfortable with and that governments will allow. However, businesses and employees must be prepared.

Governments and businesses must formulate new plans to understand the training needs of their staff, the skills that will be needed in the future, and offer programs to bridge the gap and equip employees with skills for the digital future.