Job loss is painful. It causes stress on individuals, families, and nations. Notably, the impending job loss threat due to technology has caused anxiety. Studies indicate that the roles of machines in performing all tasks will grow from 30 percent in 2020 to 50 percent by 2025. Besides, it’s expected that this trend of delegating increasing tasks to machines will continue. The rapid shift in job distribution towards machines has resulted from a new generation of intelligent machines. Advances in artificial intelligence (AI) and robotics could potentially replace a large proportion of existing human jobs. Despite its significant economic benefits, contributing up to $15 trillion to global GDP by 2030, it will cause high human costs. Hence, we need to pay attention to underlying causes and scale to realign the workforce to minimize the devastating effects.
Job loss due to technology is not a new concept. Although technology is a vital means of creating new Wealth, it naturally causes job loss in old economic activities. Hence, despite ushering economic benefits, it causes pain. Often, this pain triggers stress and even social unrest. For example, the invention of the flying shuttle in 1733 was one of the key developments in the industrialization of the weaving of fabrics. It considerably sped up the previous hand process, but it also halved the labor force. This is a typical example of the role of technology in advancing our production methods while lowering the role of humans. This characteristic appears to be a natural one underpinning our progression with technology. Due to its job loss effect, society has been continuously under stress to adjust. Our challenge has been to get clarity about the underlying patterns to predict better to prepare.
Job loss predictions:
Some of the predictions include that the adoption of AI and automation will impact roughly one-fifth of the global workforce. A survey finds that 50 percent of companies believe that automation will decrease their full-time staff numbers. To be more specific, a study indicates that by 2030, robots will replace 800 million workers across the world. Perhaps, the prediction of 800 million job loss due to robot need further clarification. According to the International Federation of Robotics (IFD), in 2020, we had 2.7 million robots globally. The highest job loss from this robot population is estimated to be 16.2 million (6×2.7), as atypical factory robot takes over jobs from 5 to 7 workers. Furthermore, the growth of the robot population by 373,000 in 2019 indicates that additional job loss in 2019 was 2.5 million.
Hence, historical data of robot population growth does not offer strong support in favor of 800 million job loss. However, physical ones, robots have been appearing as software (bots) taking over cognitive roles in office work. Hence, unlike in the past, white-collar office workers are now under threat of job loss due to robots. Some predictions about the job loss from bots or robot process automation (RPA) have been emerging. Despite disagreeing with job loss predictions, there is no denying that technology progression, notably in the form of robotics and automation, will keep killing jobs. To have greater clarity, we should look into significant causes of job loss—making the future of work uncertain.
Robotics and automation:
Upon Innovation of a product, the race begins to produce it effectively and efficiently. Hence, the demand for tools and automation emerges. To ease the difficulty, the production of a product is divided into components; steps of producing each part are developed; finally, the actions of assembling sub-systems and the whole product are developed. In this exercise, meticulous attention goes into developing tools in augmenting and replacing humans’ roles in production—giving birth to automation. Hence, automation is an essential characteristic of production. Furthermore, by leveraging technology advantage, innovators keep redesigning products, processes, and tools for taking increasing benefits from automation.
Hence, along with the maturity of products and technological advancements, the role of humans in the production of any product keeps falling. For example, over the last 100 years, in automobile production, the percentage of tasks performed by humans has fallen from over 80 to less than 20. Instead of being in charge of production, humans have taken the role of supporting automation to run automobile production plants.
Robotics is an extension of automation. In factories, human arms like manipulators have been taking over manufacturing tasks. The journey began in 1961 at an automobile plant of General Motors. Since then, the number of robots in factories has been growing, reaching almost 2.7 million in 2020, according to the international federation of robotics. There is no doubt that this number will keep rising. On average, each factory robot takes over the roles of 5 to 7 human workers.
Humanoid robots yet to find jobs—let alone taking over the human race
However, robots having the human-like appearance, known as humanoid, have not made much progress in taking over jobs from the human. Honda’s recent decision to stop further R&D on ASIMO indicates that despite creating thrill, humanoids are still far from being eligible to take any meaningful jobs. Upon securing the title of the perfect gentleman from The New York Times in the 1920s, Robot Eric disappeared. Since then, there have been many sensational demonstrations of humanoid Robots like Sophia or Ameca. But upon creating a sensation of taking over the human race, they disappear because they fail to qualify for meaningful jobs.
By the way, prior to Eric, the Japanese tea serving doll was also a wonder in the world of humanoid robots. There have been many barriers from touch, feel, and emotion to overcome for humanoid robots to takeover target jobs from the human. But will they succeed? Of course, they will. But not all of a sudden—instead, one step at a time.
Robotic process automation for job loss:
The robot has a synonym for manipulators working in factories or humanoids showing human-like abilities. But what about invisible, software robots. We call them bots—powering robotic process automation (RPA) of service. RPA has been progressing in a rapid space. Perhaps, its implication on job loss in office space will surpass the loss of factory workers’ jobs very soon. A recent report indicates that within just 2021 and 2022, America will suffer from 1 million job losses due to RPA. This figure is equivalent to the factory job loss figure created by the deployment of roughly 200,000 robots.
Unlike factory robots’ target of blue-collar jobs, RPA has been after white-collar cognitive office jobs. Perhaps, its implication will rapidly rise. Furthermore, due to zero complexity or cost in copying software, both the scale and scope effect of RPA diffusion is very high.
Job polarization—hollowing out the middle:
Human beings qualify for jobs due to having three types of abilities: (i) innate abilities, (ii) Codified Knowledge and skill, and (iii) experience earned Tacit capability. Among these three, innate abilities are extremely difficult, perhaps not impossible, to automate. Surprisingly, codified knowledge and skill earned through education and training are highly amenable to automation. And the tacit capabilities show moderate complexity to automation.
Due to the high relevance of codified capability in the middle layer, organizations look for degree holders to recruit white-collar employees. Due to the ease of software-intensive automation of codified ability, organizations have started to experience high job loss in the middle layer. On the other hand, people working at the bottom layer are less vulnerable to automation, as bottom layer jobs highly depend on innate abilities. As a result, there has been a job polarization, creating hollowing out the middle effect.
Job loss due to reinvention of technology core:
Although we blame automation and robotics for factory job loss, reinvention of products and processes has a very high impact on job loss. For example, reinvention of the automobile is cutting half the labor demand in manufacturing automobile components and assembling them. Electric vehicles require far fewer moving components than their gasoline counterparts. Similarly, LED light bulbs require far fewer discrete components than CFL or incandescent light bulbs. Again, reinvention of the camera has removed the necessity of many jobs engaged in developing, washing, and printing films. There have been many more examples. The growing scope of replacing the role of hardware with software has been accelerating this effect on jobs.
Product and Process innovation affecting jobs:
Yes, innovation of new products and processes creates jobs. But these innovations do not remain static. Innovators are in the race to improve them. One of the areas of improvement is to keep reducing human involvement, either through enhancing existing features or adding substitutes. Hence, their continued progression keeps reducing human involvement. Progression of innovations and their production processes has a natural tendency of causing job loss.
Although the role of robotics and automation in killing jobs is quite visible, there are other causes of job loss too. RPA, invisible robots, perhaps, has a far more significant impact on job loss due to relative ease of automation of codified knowledge and skill, and tacit capability. Furthermore, reinvention and advancement of innovation of both product and process innovations have a tendency of causing job loss. Hence, we should have a far broader and deepening perspective on job loss due to technology progression.
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