Is Technology Really Destroying Jobs?

If you’re reading this blog, the chances are that you’ve got at least a passing interest in technology. At the same time, you’re probably creating jobs for others as an entrepreneur or you’re an employee yourself. Either way, at some point, the question of whether technology could replace jobs – even yours – in the future has probably crossed your mind.

As I’ve mentioned before, the general public tends to overestimate the current ability of robots to rise up and consign mankind to the scrapheap. But clearly there’s still a tension here. After all, any time an industry is disrupted by the development of successful new technologies (think Skype, Netflix, Tata Nano etc), its always likely to result in job losses as the traditional big players struggle to keep up.

In the ideal world, everyone should ultimately win following advances in technology: the consumer gets cheaper, better services and products; the new business creates new jobs; and, as the technologies collide with mainstream demand, there’s an exodus of talent from the existing industries to the new exciting frontiers. The identity of the employer might change but, for the most part, everyone finds something to do and keeps working.

But does the evidence actually back this up?

Rising Productivity But A Slowdown In Employment Growth

Not according to Erik Brynjolfsson, a professor at MIT School of Management, and Andrew McAfee, associate director of the MIT Center for Digital Business at the Sloan School of Management. They argue that current developments in computer technology are destroying jobs more quickly than replacement roles are being created.

The US statistics seem to back this view up. Despite productivity and employment growth enjoying a very similar upwards trajectory ever since the Second World War, things changed abruptly in 2000 when productivity kept rising whilst the growth in employment stagnated.

So have we reached a tipping point in the continual development of new technology? Or is it pointless worrying since people have always found something else to do when faced with unemployment caused by technology in the past?

If we assume (perhaps naively) that the statistics are correct, we face a key question that economists know only too well the world over: can we honestly identify technology as being the main reason for this slowdown – or should we also be looking at the vast range of other macroeconomic factors?

The ‘Hollowing-Out’ Of The Middle Classes

I’m no economist. But putting aside the anecdotal scare stories in the popular press about the threat of faceless technological progress for a moment, the area that’s really of interest to me is how technology is affecting certain types of roles, such as clerical work and professional services. I’m not about to define the middle class here but if we’re looking at trends, it’s clear that computers are being used very effectively in certain areas of the workforce that share similar traits.

A report was released this week by the Oxford Martin Programme on the Impacts of Future Technology which shows that nearly half of US jobs could be at risk of computerisation, with transport, logistics and office roles being the areas most under threat. If you’ve got the time, you can get the full 72-page working paper at ‘The Future of Employment: How Susceptible Are Jobs To Computerisation?

Arguably, it’s those in the clerical and professional jobs that may have more to worry about as computers continue to improve their problem-solving abilities using a combination of artificial intelligence and big data. Take Watson, for example, IBM’s computer that beat the human contestants in a version of the TV show ‘Jeopardy!’ in 2011. That technology is now being directed towards a whole range of areas, including healthcare, customer service, investment advice and cooking.

So, for example, if you look at how Watson is being used in the field of medicine, the computer is now learning how to diagnose patients by combining its ability to assess vast amounts of medical data in conjunction with natural-language processing and analytics that are continually improving. It’s still early days but the potential for this scale of computing power are becoming clear.

How To Keep Your Job

Want to protect yourself? Current thinking is that you need a job further up the chain that requires you to use creative, social and problem-solving skills which will be far harder to automate over the next few years. In these areas, technology isn’t able to replace the individuals but is instead assisting them. Technology is used to enable the employee to do his or her work more effectively – think of the joiner who uses an electric drill to work more efficiently. He doesn’t get his P45 because the employer chooses to employe the drill instead.

An even more relevant example presents itself here when you start to think about the implications of the widespread adoption of technologies such as Google Glass in a work environment. It seems to be vital for employees to maintain a culture of curiosity whilst actively striving to become increasingly technologically literate if they want to continue to pay their bills.

Yet increasing number of people are still required to carry out low-skill jobs. Automation is just not very good yet at replacing janitors, home helps and restaurant workers, for example. Plus it’s important to remember that in many cases, technology is helping businesses not only to survive but also to expand quickly when they’re faced with a lack of available labour to employ to meet the growing demand for their new products and services.

Is It Just A Case Of Learning New Skills?

The reality is that many new technology companies are still heavily reliant on the humans behind the scenes. For example, Amazon might be increasingly dependent on Kiva to replace human warehouse staff with robots, but Kiva itself has a huge demand for new software engineers. The success of that business depends on finding talented individuals to constantly develop improved algorithms to ensure that the robots act more efficiently. Robots have never been good at dealing with change and uncertainty so if your job has that in droves, it’s safe to say that there could be a growing demand for your time.

The Autonomous Economy: Waiting In The Wings

But there’s (at least) one more significant factor that we need to consider when looking at how the development of technology in the modern era differs from the past. And that is quite simply that, in some areas, our economy is now developing without any direct involvement from humans.

Or, more accurately, more can now be done automatically by computers that are learning how to do things as a result of applying themselves to big data using new advances in artificial intelligence and smart analytics. According to W. Brian Arthur, a visiting researcher at the Xerox Palo Alto Research Center’s intelligence systems lab, means “digital processes talking to other digital processes and creating new processes”.

Result? We can do more with fewer people and some jobs become obsolete.

Here’s one of his examples. You no longer speak to humans as often when  you check in for a flight these days. Now you simply type your booking number into a machine in the airport. That one simple act sets in course a chain of events that involves many machines speaking to each other simultaneously about a huge range of topics without any human intervention (including flight status, your past history, security checks, seat choice, foreign immigration and, in some cases, making automatic decisions about weight distribution on the plane). Decisions are being made automatically in a way that was inconceivable before the networked internet age.

The Future?

Whether you believe in the argument that technology is destroying jobs or not, it does seem beyond question that income is moving gradually in favour of the so-called ‘tech-savvy’. The untapped potential of computer power, big data and individuals skilled in developing the sector is large enough to drive an exponential advance in digital technologies over the next few decades.

Whatever the eventual outcome, the one thing that’s clear is that change is a constant. The sooner we learn to continually recalibrate our expectations and skills, the more effectively each of us will be able to respond. In my view, anyway. After all, “anyone who claims they can reliably predict the future is a huckster with something to sell you – even if their product is only themselves”.

photo credit: Stuck in Customs via cc