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When Automation Can Actually Mean More Jobs

Automation creates more jobs in the modern workforce

The introduction of automation or artificial intelligence (Ai) in the early 90’s in the workplace was viewed with skepticism, fear and reticence, even labeling it as a destructive tool that will eventually cut down the need for employing ordinary workers in a conventional manufacturing setting. But the truth is: automation creates more jobs than take over the modern workforce.

In late 2014, renowned physicist Stephen Hawking adamantly expressed his concerns in a forum about artificial intelligence, baring a more deep-seated, different reason: that automation, can and might eventually overtake and replace humans.

According to the World Economic Forum: “The development of artificial intelligence could spell the end of the human race. It would take off on its own, and redesign itself at an ever increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded.”

“there is a much smaller displacement effect of automation on employment”

Hawkings also mentioned that the downside in automation will, “in turn accelerate the already widening economic inequality around the world. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.” Hawking adds, “We are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing.”

But the super efficiency of these AIs, cutting down the work in half time, has undeniably saved the company additional operations expense, not to mention manpower required to finish a job. In a study made by authors Acemoglu and Restrepo (2017), they concluded that one additional robot per thousand workers reduces the US employment-to-population ratio by about 0.18-0.34% and wages by 0.25-0.5%, citing that the industry most affected by automation is manufacturing.

The lingering, hanging question as to whether machines will be able to continue to improve their performance beyond human levels that it will put humans’ jobs at risk and eventually reduce employment.  The gloomy outlook in Hawkings’ theory have been contradicted in the studies done by Frey and Osborne in 2013 showing “there is a much smaller displacement effect of automation on employment”. In their conclusion, the perceived estimated negative impact of automation is almost nil.

“It is largely already technologically possible to automate almost any almost any task, provided that sufficient amounts of data are gathered for pattern recognition”

In close scrutiny, Frey and Osborne actually focused on ‘whole occupations rather than single job-tasks or occupation-based approach’ which relegated their estimate on the risks of opting for automation.  Manyika et al (2001) for its part asserted that “a task-based approach can better capture the impact of automation”, reporting that at least 30%  from the 60% of occupations have activities that are automatable”.  Previously, other scholars had predicted that routine jobs were the most likely to be automated, although Frey and Osborne maintained that advances in computerization have already made even non-routine jobs automated, too. Some machines can do non-routine tasks and an example of which are the data from medical journals and patient records which oncologists are using to automatically create treatment plans for cancer patients. “It is largely already technologically possible to automate almost any almost any task, provided that sufficient amounts of data are gathered for pattern recognition,” the authors wrote.

From simple or basic tasks to complex virtual learning techniques, machines are now able to perform a wide range of physical and cognitive tasks. The efficiency and accuracy of these machines’ work is expected to increase as AI systems advance through machine learning, big data and increased computational power.

But fear not. While distressing concerns for the future of human work and employment persist, the benefits are clear.  Past cases suggest that displacement for many workers particularly in the area of manufacturing can indeed happen as a result of automation, where in fact many manufacturing jobs centered in the Midwest have already been automated, new industries also emerged, causing a positive impact on employment, reports said.

For one, the automobile industry experienced a robust growth, increasing the available jobs in the automotive sector. Jobs were also created in different sectors because of the growing number of vehicles on the roads. What else?  New jobs were created in the hotel and fast-food and allied service industries that serve the needs of motorists and truck drivers.

A stark case in point is the entry of the Automated teller machines (ATMs).  Initially, it was predicted to significantly reduce the number of bank clerks employed as the ATMs took over some of the tellers’ routine tasks. From 20 tellers per branch in 1988 in the USA, the number was reduced to 13 in 2004. The impact reduced the cost of running a bank branch, but it also allowed banks to open more branches in various cities to cater to growing customer demand. As more urban bank branches grew over the same period, so did the number of bank employees increased. Another benefit of automation in shopping is through e-commerce. Thru Lazada’s reliable recommendations, shoppers are encouraged to buy more online and this has increased in overall employment in retail.

Automation can mean more jobs

The benefits of automation are becoming crystal clear, and once markets and the  workplace have fully adapted to automation as an integral part of day to day routine, productivity is an inevitable effect that will yield innumerable positive impact on employment. Fear not therefore, for the advantages of automation far outweighs the touted disadvantages. For one, automation will generate labor and bring back production to the U.S.  Low-wage overseas labor will no longer be an appealing option since automation will give rise to an independent, flexible workforce thus eliminating the need to consider low-paying offshore jobs as freelancing professionals with 4-year college degree or higher with thorough  industry knowledge can fill in the job roles now redefined, efficiently complete a project even offsite in emerging high-skilled activities or niche like software engineering or product development.

Second, automation will redefine jobs and drive independent workforce demand.  The flexibility that automation offers has created a shift from what used to be traditional farm work, to factory setting where local workers now thrive.

Third, automation technologies enable companies to become more productive and create higher quality products, in a safer, less hazardous environment for their employees. Businesses in the US can now be even more competitive in the global marketplace as they grow their businesses. The advent of automation has led to new employment opportunities for American workers in a way that we could not even imagine few decades ago. The recent studies’ conclusion bear an upbeat prognosis: that with success (of automation or artificial intelligence) comes more jobs across all sectors and that is going to be a welcome certainty.

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