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Many economists are telling that the loss of jobs resulting from automation and artificial intelligence is not permanent, new jobs will be created and eventually the world will keep spinning as it always did. To sustain their claim they turn to the Industrial Revolution where we had the real first increase of production in the history of mankind, thanks to a multiplication of workers’ strength by steam, first, and electricity. If we are looking at the situation in the XVIII and XIX century and we compare it with today’s situation we clearly see that there are many more jobs opportunity today than 200 years ago (and also many more people!).
What they often forget to mention is that the transformation process was long and painful (it included wars, revolutions… partly caused by the social changes created by the Industrial Revolution).
The coming Industry 4.0 revolution to some will generate an even greater impact than the Industrial Revolution, and even if it will be similar the idea of waiting 2 centuries to have the social situation stabilised is not a good prospect.
I find interesting the graph shown in the header of this post. It is based on data from the US Bureau of Labor and applies to the US market but I suspect it is not significantly different from what has happened in other Western (developed) Countries.
Looking at the graph you can see that starting in 1990 the production output has improved significantly but the workforce has not been affected. Then, at the turn of the century the workforce started to decrease and it kept going down for the first decade of this century now showing a slight recovery. Also interesting that the production has kept increasing (in spite of the job losses) with a fall due to the crises of 2008 (decrease of demand, not of production capability).
This graph is not surprising, in the sense that the introduction of automation (robotisation in this case) is not immediately affecting the workforce, there is a period of co-existance of workers and robots. Once the automation takes hold, companies start reducing the workforce.
The job losses have not been uniform, blue collars suffering most, nor had it hit equally different Countries.
As shown in the graph, the Elephant Curve, the emerging Countries have seen a significant wealth growth whilst the middle class in the developed world has seen a decrease of wealth (and the richest people have become, thanks to globalisation and larger markets, even reacher).
If in the automatisation transformation in the 90ies blue collar workers were the most affected (and the ones to suffer from downsizing in the first decade of this century) the coming automatisation supported by artificial intelligence is more likely to affect white collars in the next decade. Furthermore, automatisation (robotisation) is happening in developing Countries as well and these may be affected twice as hard because in addition to the job loss due to robotisation of production several manufacturing activities will be moved from developing Countries to developed Countries since the manufacturing cost, with robotisation, is levelling out across the world leading to insourcing.
If the 90’ies have seen a loss of jobs in developed Countries but an increase in developing Countries that took up the manufacturing, the next decade is likely to see a more generalised job loss. The balance provided by new jobs creation in developed Countries may be weakened in the next decade by the competition to fill the new jobs coming from all over the world (as education, and skill, has increased worldwide).
Over time new jobs will be created, everywhere, but many will feel the heat. Continuous education is likely to become more and more important, essential I would say, but in turns this requires a cultural change that should be fostered early in life. The future generation of students need to understand that the education will have to be a life long activity.
It is clear that we cannot wait 2 centuries to rebalance the work market. It has to happen in synch with the transformation of jobs demand. This is something EIT Digital and IEEE are investing on. Fostering a Digital Transformation without considering its downsize would backfire and although changes in education are not a silver bullet they are an important component in managing the challenges ahead.
In 2 centuries we will be accustomed with a life where job or profession will not define our social identity and prestige. A new society will emerge and people will know that work is for machines and not for humans. As we knew in the past that if we plant a fruit tree- it’s job is to produce fruits and our job is to consume it.