Trevor Dobbs, Staff Writer
As the world continues to increase its technological capabilities, we are bound to see increasingly more automation and artificial intelligence playing a role in our lives and the economy.
Over the years, as new technologies are developed and old technologies are improved, it is simply a fact of economic reality that we will eventually see workplaces transformed, new jobs created, and some jobs will sadly disappear. This is not a new phenomenon, as we have witnessed this throughout all of human history. When humanity stopped using bronze and began using the more superior metals such as iron, this was an example of a technological advance that had one of two effects on the current producers of bronze; when presented with the reality that bronze was no longer the most efficient material, the producers had to either update their skills to learn how to work with another metal, or they simply became unemployed and did something else altogether.
A more recent example of human innovation that is displacing workers is the printing press, eventually replaced by the typewriter, which was replaced by the modern computer. The people who operated those technologies had to update their skills, and those same typewriting companies had to change their product, or they simply went out of business or became unemployed. The same is true today, as many functions that employees perform in various sectors gain potential for automation, the employees simply need to adapt to their changing environment and learn new skills to use this new technology.
It is understandable for people to be fearful of this process, but we need not be if history is any indicator. We must understand that when old jobs are made obsolete, new jobs are created in their place. Business strategy consulting firm McKinsey (2018) reports that technological advances usually actually lead to a net surplus of jobs rather than a net deficit. This means that in terms of our jobs “disappearing,” we actually have evidence that shows the latter is actually true; more jobs are created as a result of this innovation than disappear as a result of it. When you think about it, it makes a lot of sense. The more technology your society has, the more complex it becomes, the more complex and expansive consumers’ demands become and so on. For instance, if we suddenly lost all of our technology and returned to a sort of pre-technological period, only a few types of jobs actually would exist: human security, agriculture, leadership and hunting/gathering. Technology gives us more variety of jobs and creates more jobs than it destroys.
The bottom line to consider with this particular topic is that automation and artificial intelligence are adopted by a company, they are making the conscious decision to take on this new technology with the hopes that it will create better efficiency and/or growth in the company. If I can have a machine harvest 10 times more crops than a person, then that means that my company will produce yields that are 10 times better than what a person can do. Maybe I don’t need this person to perform this function any more, but I can move him somewhere else in the company and hire three more people due to my increase in revenue as a result of the growth that the new machine produced for the company. In this scenario, the machine ended up creating a result that was better for everyone.
However, it is clear that there are people who aren’t going to do better in this scenario. Inevitably, there is going to be some percentage of the economy that is completely automated. Some experts put this number at 3 percent and others put it as high as 50 percent. In this particular scenario, if artificial intelligence and automation were to come too quickly, we would see large amounts of structural unemployment; this type of unemployment is a direct result of a lack of skills and perhaps the lack of ability to obtain those skills. We are seeing this happen with factories, as people well into their careers as a factory worker are suddenly informed that they will be laid off. It would be unrealistic to tell a 60-year-old to get a college degree and retrain to get into a different market, so what are we to do with those that fall through the cracks of this drastic change in our society?
In the scenario where technological innovation has placed individuals and societies in a net deficit situation, I think the best thing that we can do is alleviate these peoples’ situation by changing up the welfare state. In short, we should have an adequate safety net available for people who fall through the cracks. I do believe that everyone who is laid off as a result of technological innovation should have free access to retraining. I also believe that we would be wise as a society to offer tax incentives to companies to help facilitate this. But ultimately, we have to also take into account the example of the 60-year-old who realistically cannot be retrained. To navigate through this modern situation, so long as we make sure that people have a safety net to fall back on, I think that we can safely navigate into the future with technological advance.