Our world is slowly but surely moving to simplicity and autonomy. Many industries are boosting efficiency by letting machines do work for us. Trucks will soon drive themselves. Grocery stores are going cashierless.
The good side to all this is it allows machines and robots to do our mundane, labor-intensive, repetitive work so that we humans can focus on more challenging, meaningful, and creative tasks. Automation also improves supply-chain efficiency and lowers the cost of our goods. But at what cost? Although new technology will improve our lives in many ways, it will in fact replace many existing jobs just as we fear.
Automation is not a new phenomenon, and fears about its changes on employment date back centuries, even before the Industrial Revolution. In the 1960s, US President Lyndon Johnson put out the “National Commission on Technology, Automation, and Economic Progress.” Among its conclusions was “the basic fact that technology destroys jobs, but not work.” Fast forward to today with the recent rapid advances of AI, robots, and other autonomous systems, and our concerns are renewed with urgency.
The extent to which these technologies displace workers will depend on the pace of their development and adoption, economic growth, and growth in demand for work. Even as it causes declines in certain occupations, automation will change many more: 60% of occupations have at least 30% of work activities that could be automated. It will also create new occupations that do not exist today—as technologies of the past have done.
As history has shown, technology replaces jobs but it also creates new ones to support, develop, refine, or expand that technology. In hindsight, many of these jobs seem silly and ridiculous to us. But back then, it was the best and only way we could do things. As time passes, we will be thinking the same way about current jobs that will be replaced.
While about half of all work activities globally have the technical potential to be automated by adapting currently demonstrated technologies, the proportion of work actually replaced by 2030 will likely be lower because of technical, economic, and social factors that affect adoption.
The proportion varies widely across countries, with advanced economies more affected by automation than developing ones, due to higher wage rates and thus economic incentives to automate.
Even with automation, the demand for work and workers could increase as economies grow, partly fueled by productivity growth caused by technological progress. Rising incomes and consumption (especially in developing countries), increasing health care for aging societies, investment in infrastructure and energy, and other trends will create demand for work that could help offset the displacement of workers. Additional investments such as in infrastructure and construction could be needed to reduce the risk of job shortages in some advanced economies.
Even if there is enough work to support full employment by 2030, major transitions lie ahead that could match or even exceed the scale of previous shifts out of agriculture and manufacturing.
McKinsey and Company suggest that by 2030, 75 million to 375 million workers (3% to 14% of the global workforce) will need to switch occupational categories. Also, all workers will need to adapt as their occupations evolve alongside increasingly capable machines. Some of that adaptation will require higher educational attainment, or spending more time on activities that require social and emotional skills, creativity, high-level cognitive capabilities, and other skills that are relatively hard to automate (there is a business opportunity there).
Contrary to the political stigma, automation actually adds jobs. When you automate the production of a good or service, then it becomes easier and cheaper to produce at an equivalent or higher quality. As a result, that good or service becomes more appealing and accessible to more people, and demand for the product naturally increases.
In some cases, demand increases so much that it results in the expansion of productive capacities—and that can offset any tech-driven job losses because humans still need to manage certain parts of the process.
A good example is the bank ATM. In the U.S., banks were encountering resistance from their employees for their horrible working hours. The push for ATMs was motivated by the need to shorten banking hours, reduce congestion in bank branches, and cut labor costs.
The ATM amplified the ubiquitous nature of banking, where banking didn’t need to be tied to a branch or a human being, was available 24/7, and could be accessed through machines, and later through phones and laptops.
When ATMs were introduced in 1969, people expected the number of banking locations to shrink. Instead, Benanav said, “It actually made it possible to set up many more of them, it became cost-effective.” There were under 200,000 bank tellers in 1970, but over 400,000 a decade later. And with this new technology, the demand for workers in surrounding industries such as cybersecurity, programming, and IT increased.
More than 60% of jobs performed in 2018 had not yet been invented in 1940
MIT
According to the World Economic Forum, 65% of children entering primary school will end up in jobs that don’t yet exist. A 2016 World Economic Forum report found that “In many industries and countries, the most in-demand occupations or specialties did not exist 10 or even 5 years ago, and the pace of change is set to accelerate.”
While technology does in fact replace jobs, it also dawns new work, oftentimes jobs that we could have never imagined. Besides, who would have thought that today there would be content creators, yoga instructors, and OnlyFans models?
Here are two videos on the topic:
Economic Motivation 