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Space X and Tesla Motors entrepreneur Elon Musk startled attendees at a National Governors Association meeting in Nevada when he warned about the economic disruptions that automation and artificial intelligence will cause. For good measure he also sounded the alarm about the threat AI could pose to human life on Earth. In an interview  with Nevada Governor Brian Sandoval from a state where Tesla is building a highly automated electric car engine “gigafactory” near Reno, Musk warned that “until people see, like robots going down the street killing people, they don’t know how to react [to AI] because it seems so ethereal.”

Despite his skill as a hi-tech entrepreneur Elon Musk is getting ahead of himself, or at least ahead of the data.

Sandoval along with the other governors attending the meeting were stunned into dead silence. But Musk didn’t backtrack or qualify. He doubled down. The threat, he explained “is very real, at least, it will be soon.”

“When I say everything, the robots will do everything, bar nothing,” he said. He went on, as the automation revolution continues, “AI is a fundamental existential risk for human civilization, and I don’t think people fully appreciate that.”

These sentiments appear odd coming from the South Africa-born Stanford trained engineer-inventor and high-tech entrepreneur whose goals include reducing global warming through sustainable energy production and consumption, and reducing the “risk of human extinction” by “making life multiplanetary” by establishing a human colony on Mars.

Elon is Not Alone About the Threat of AI

Robot close up.

But Musk is not the only high tech leader with such thoughts. Microsoft founder Bill Gates says automation “will reduce demand for jobs, particularly at the lower end of skill set.” Last May, Facebook CEO Mark Zuckerberg told Harvard’s graduating class of 2017 that increased automation would strip us not only of our jobs but also of our sense of purpose.

Mark Nall, a program manager for NASA, told Pew Research Center’s Aaron Smith and Janna Anderson, who investigated AI, Robotics and the Future of Jobs, that “unlike previous disruptions such as when farming machinery displaced farm workers but created factory jobs making the machines, robotics and AI are different. Due to their versatility and growing capabilities, not just a few economic sectors will be affected, but whole swaths will be. This is already being seen now from robocalls to lights-out manufacturing. Economic efficiency will be the driver.”

“The central question of 2025 will be: What are people for in a world that does not need their labor, and where only a minority are needed to guide the ‘bot-based economy,” adds Stowe Boyd, lead researcher at Gigaom, an Austin, TX  research group studying emerging technologies for business and industry?

Such is the conventional wisdom among the technoratti: Robots and AI are going to do away with our jobs. And if we are not careful they will lower our living standards in the bargain.

The only problem is that the evidence of the last two centuries points in the opposite direction: Automation has generated lots more jobs. People have been worrying about automation wiping out jobs since English textile workers, calling themselves Luddites smashed weaving machines in the early 19th century in an effort to roll back the technical advances of nascent industrialization.

Elon Musk

Similarly in 1900, 41% of American workers were employed in agriculture, but by 2000, automated machinery brought that number down to just 2%. In the last 30 years computers are increasingly performing tasks humans once did. You may have noticed that the once ubiquitous typing pool has vanished. Despite the efforts of the followers of Ned Ludd 96% of the weaving  work became automated, but the number of textile workers grew. The increase in productivity caused the cost of cloth to rapidly go down making it far more affordable for everyone to own multiple wardrobes, which in turn led to more demand for workers to produce more cloth.

In the 1970s the invention of the ATM was said to spell the end of bank tellers. Initially this was true, but the raised efficiency that this entailed allowed banks to open more branches, which in turn prompted the hiring of more tellers. U.S. bank teller employment rose by 50,000 between 1980 and 2010, but the tasks of these tellers evolved from merely dispensing cash to providing services like credit cards and loans—skills that ATMs don’t have.  In fact, there is only one occupation where automation has actually destroyed jobs eradicating employment completely: Elevator operators.

History has taught us a great deal about how automation disrupts industries, but people seldom appreciate that its chief result is that of unintended consequences. Researchers at the McKinsey Global Institute  concluded that only 5% of occupations are fully automatable employing currently available technologies. They noted that jobs that people do today, thanks largely due to high productivity made possible by technological advances, are vastly different from those that were done at the turn of the 20th century.

Writing in the Harvard Business Review Mark Muro and Scott Andes, both at Brookings Institute, report that when it comes to automation’s influence on the labor force there is a great deal of ambiguity. Research suggests that while one cannot rule out that there is no effect of automation on employment levels, the effects tend to vary depending on skill level. Robots, for example, tend to increase the employment and pay of skilled workers even as it tends to “crowd out” employment of low-skill and to a lessor extent middle-skill workers. While robots don’t seem to be causing net job losses, they do seem to change the sort of workers that are in demand. In other words robots and automation seem to improve productivity, not costing jobs overall.

Automation and AI’s impact on employment is more about changing the nature of work than it is about harming people’s prospects. Despite his skill as a hi-tech entrepreneur Elon Musk is getting ahead of himself, or at least ahead of the data. The fields most transformed by technology have produced the biggest increases in employment, from medicine to management consulting. Disappearing factory jobs have been replaced by jobs in  services, where highly skilled workers, like doctors and computer programmers are paid more.

James Bessen, an economist, who serves as Executive Director of the Technology & Policy Research Initiative at Boston University School of Law, told Wall Street Journal’s Christopher Mims, “that the problem of [automation] is not mass unemployment, it’s transitioning people from one job to another.”

Dr. Andrew Moore, Dean of Computer Science at Carnegie Mellon University, said “I think it’s interesting we’re all so concerned about there being jobs available and there’s such a gap [in artificial intelligence training].”

Perhaps Musk, Gates and Zuckerberg and other members of the technoratti should take a look around sometime.  Despite the looming threat of runaway A.I., technology also presents an opportunity to create a number of new jobs.

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