We’ll conclude with our third post in a series derived from a recent group of articles published in the June 25, 2016 issue of The Economist discussing artificial intelligence, the rise of machines, and the potential impact on jobs in the future.
In our prior post, we ended by noting that in prior revolutions (like the Industrial Revolution) it’s always been true that as old jobs were replaced by automation new jobs sprang up in their place to perform other tasks that could not be automated. History is full of examples, such as farming, weaving and one more recent entry: the ATM.
When ATMs were thought to be the death knell for bank employees a couple of decades ago, bank tellers did indeed see their average number fall from 20 per branch in 1988 to 13 in 2004, according to The Economist’s editors. But… that reduced the cost of running a branch, and in turn banks opened more branches. The number of urban branches rose by 43% during that time, so the total number of employees actually increased. Rather than destroying jobs, ATMs changed the work mix for bank employees, and they moved away from routine tasks towards sales and customer service, tasks machines could not do.
The same pattern can be seen across industry with the rise of computers; rather than destroying jobs, technology redefines them, often in ways “that reduce costs and boost demand.” Between 1982 and 2012, employment actually grew faster in occupations that made more use of computers, according to a study by James Bessen, an economist at Boston University School of Law. More computer-intensive jobs ended up replacing less computer-intensive jobs. Thus, jobs were reallocated more than replaced. It’s true across a wide range of fields.
One low note: only in manufacturing did jobs expand more slowly than the workforce did over the period of the study. That had more to do with business cycles and offshoring to China during that time period than with technology, Besson notes.
While in the end we can’t predict which jobs will be replaced by technology or what jobs will created in the future, “we do know that it’s always been like that” says Joel Mokyr, an economic historian at Northwestern Univ. Think about it: Who knew 100 years ago that there would be jobs like video game designer or cybersecurity specialists?
So while the truck driver of the future may be no more, we can only speculate about what heretofore uninvented job may take that one’s place. Remember, 100 years ago there was great concern about the impact of the switch from horses to cars. While the horse jobs went away, countless new jobs were created at motels, fast food joints, and travel agencies (now another in a dying breed of jobs). Tomorrow’s autonomous vehicles, the editors note, may also greatly expand the demand for food product delivery.
So who is right: the pessimists who say this time it’s different and machines really will take all the jobs (the techie sentiment) or the optimists “who insist that in the end technology always crates more jobs than it destroys?” as the editors question. The truth, The Economist concludes, probably lies somewhere in between. AI, they note, will not cause mass unemployment but it may speed up the trend toward computerized automation at a faster pace than heretofore known. It may disrupt the labor market – it’s happened before, certainly – and will require as always that workers learn new skills.
These are difficult transitions, though not necessarily as Besson notes “a sharp break with history.” But regardless of your viewpoint, most agree: what’s required is that companies and governments make it easier for workers to acquire new skills and to switch jobs as needed. In the U.S. in particular, we have far to go in this regard, and there is indeed a role for government, education and the private sector. Hard change will be required. But then, like job displacements and replacements themselves, they create their own necessary forms of reinvention. Always have, always will.
But the pace of change has never been faster, and therein lies the ultimate jobs challenge for the next generation of jobs and security both here and abroad.