Automation is the most popular trend in today’s world of business. It is general consensus that automation increases productivity, leads to higher returns, and makes life better, but there are broader differences on how it will impact the employment levels and society as a whole. The big question is: are we prepared to deal with its implications?
Automation has made life simpler. Think of ATMs and self-checkout machines at supermarkets and the simplicity they have brought to our lives. Digital banking has brought banks to our fingertips, while e-commerce has provided us unlimited choices. At the same time, automation has allowed major productivity gains for businesses, leading to lower costs and higher returns.
The majority of automation gains are achieved by productivity improvements on non-cognitive routine tasks that allow personnel time to focus on high-value activities, such as those that require problem-solving, creativity, interpersonal, and analytical skills as well as those activities that involve developing complex relationships with people. On the other hand, low-skilled (cognitive) non-routine jobs (e.g., tasks that require manual skills such as hairdressing or plumbing) are less likely to be automated – at least in the near future. However, with artificial intelligence, the goal post of technology as a whole has been increasing over the past few years, forcing people to adapt to changes.
Change is good. It is also often hard. This is the case with automation, too. While automation provides a plethora of opportunities both in our professional and personal lives, it also renders several jobs unnecessary, leads to labor displacement, and forces people to change. In their book, Flight of the Buffalo, James Belasco and Ralph Stayer said: “Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up.”
To see gains from automation, take a look at the e-commerce sector. Even though it directly affects brick-and-mortar stores, e-commerce is a good example of how technology can create both skilled and unskilled jobs – data & computer scientists and software engineers in the supply chain on the one end and personnel for warehouses, shipping, packaging, customer services, etc., on the other.
Michael Mandel, chief economic strategist of a Washington, D.C.-based think tank Progressive Policy Institute, estimates that around 397,000 jobs related to retail e-commerce were created between December 2007 and May 2017 in the United States compared with 76,000 jobs lost in the traditional retail industry.
In the energy and utilities industry, drones are creating new jobs. Many power companies are implementing drone programs for infrastructure and transmission lines inspection, with companies valuing lower costs, shorter inspection times, and improved worker safety when compared with traditional methods, such as inspection trucks and helicopters. And we now have jobs that didn’t exist 10 years ago, such as the remote pilot in command (PIC) and the person manipulating the flight controls of unmanned air vehicles (UAV).
However, it is difficult to estimate the impact of technology on jobs. This is highlighted by two separate studies conducted by Oxford University and OECD. They respectively predict that 47% and 9% of workers in the United States have jobs at risk of potential automation. The estimates are different because of the difference in their approaches. The studies have focused on estimating job losses or rather jobs at risk, and not on new jobs created, because predicting the future is understandably difficult even with reasonable assumptions. Even if we try to estimate the number of new jobs created, the estimates are going to vary significantly as we not only have to forecast the new jobs in the current industries but also estimate the new industries and functions that will be created because of the transformations. The rise of digital marketing, e-commerce, and data analytics provides perfect examples of how technology can lead to the creation of new industries / functions along with all the accompanying employment opportunities.
In a world characterized by rapidly changing technology, it has become imperative not only for companies but also for individuals to constantly focus on upskilling in order to stay abreast.
Here’s one example from Evalueserve’s business: The earlier business research industry was mostly about making phone calls and manually collecting data. The challenge nowadays isn’t collecting data, but making sense out of it. Huge amounts of data come from different sources, in different formats, are sorted or unsorted. For these tasks, Evalueserve applies its mind+machine strategy, a combination of smart technology with the minds of clever people. Most of the manual data collection tasks that were done by research analysts 15 years ago have now been taken over by automation (crawlers, macros, etc.), but now the research analysts’ job is much more demanding. While the job now requires more expertise, it is certainly also more interesting for the analyst who upskills to become a domain expert.
The new technological economy is here to stay, and adaptation should start right now! Do you work for a company that has changed its business model due to automation? Have you personally felt any effect of automation and technology in your job?