The human cost of automation

 By Michelle Leslie

Digital transformation. Innovation. Automation. What is the cost of replacing people with machines?…

According to some think tanks, the cost is almost immeasurable. While the impacts of robots will vary by country, the United States and Germany could lose up to one-third of their workforce within the next 12 years. Every industry will be touched as well.
A report by the Center for an Urban Future highlighted just how far and wide the impacts of robotics will cut into economies around the world. “Machine learning, robotics and artificial intelligence are poised to bring about massive changes to a much larger swath of the economy in the years ahead, sweeping not just through factory floors but office towers, hospital wards, and main streets,” according to the organization’s June 2108 report.

Automation could wipe out economies

Large sectors of the workforce in countries like China and Mexico where the bulk of global manufacturing takes place are at risk of disappearing. As major manufacturing hubs, these two countries produce everything from toys and electronics to renewable energy and clothing, while they also serve as aircraft and automotive production centers. China has big plans for robots, with plans to automate one-third of the manufacturing workforce in the next few years; close to thirty million people, equivalent to almost the entire population of Canada, could find themselves on the unemployment line.

Robots operated by Alibaba's logistics unit Cainiao, move parcels at a new automated guided vehicles (AGV) warehouse in Hangzhou, Zhejiang (Reuters)

For developing countries, the situation is bleaker. Artificial intelligence brings with it not only the disruption and potential disappearance of jobs but of entire economies, reports the Eurasia group. With the human component rendered redundant, wages, labor laws, and even production locations lose their relevancy for corporations.
In Bangladesh for example, over three million people rely on factory work to feed their families. With the introduction of automation, manufacturing jobs could simply become a thing of the past.

United Nations raises concerns

The United Nations has sounded the alarm that automation could kill off industry and most of the jobs in developing countries, putting entire economies at risk. In its 2017 Trade and Development report, the UN stated that: on some accounts, the next generation of automated machines will be much more durable and will probably require only a small number of highly skilled workers for their operation, rather than the large numbers of workers at any skill level that complemented earlier technological breakthroughs. As a result, most workers will be unable to move to better-paid jobs by upskilling but will compete for a shrinking number of similar jobs or move to occupations with lower pay. … Hence, the main risk of digitization may not be joblessness, but a future where productivity growth only benefits the owners of robots and the intellectual property embodied in them, as well as a few highly skilled workers whose problem-solving adaptive and creative competencies complement artificial intelligence, while others are forced into precarious employment and “automated inequality.”

Swiss Economy Minister Schneider-Ammann stands beside as Belgian King Philippe looks at a robot during his visit to ABB Turbo Systems in Baden (Reuters)

Precarious employment leads to a precarious tax system and investments in major infrastructure projects. With a hollowed-out labor force, the resulting decrease in tax revenues creates challenges for the development of key projects like roads, bridges, schools or hospitals. Automation is nothing new; global economies have been automating for years. In fact, large portions of the global population have benefited from innovations in technology.
The rise of automation has assisted in everything from telecommunications to health care, and thanks to technological innovation, we have experienced greater global connectivity and sharing of information. Robots have assisted humans in allowing for faster and better productivity with fewer errors. Deloitte reported that almost a million new jobs have been created in the Swiss economy thanks to a more automated workforce.

What are countries doing to prepare for automation?

This new future could also disrupt global goals for sustainable development; in its report, the United Nations pointed out some issues to consider when moving towards a more automated society.
The future of automation is difficult to predict, as is society’s willingness to guide and steer its adoption. Given these uncertainties, some of the issues that should be considered by policymakers could include: strengthening social protection systems; implementing education policies that foster the skills required for a flexible, computer-literate workforce; policies that promote shifting the labour force from low to higher skilled jobs, with enhanced retraining and safety nets for workers adversely affected by trade agreements; and policies that promote investment in R&D, fostering innovation in developed countries and emulation in developing counties.
Basic universal income is one method that has been explored by many municipalities to help offset the cuts that will be brought about by artificial intelligence. Finland tried to implement a guaranteed income but they pulled the plug on the experiment, ending it after two years. In Canada, the province of Ontario recently launched a basic income. That pilot will target vulnerable workers to try to improve food security, housing stability and overall health benefits. In Italy, the outgoing government reported that their minimum income project, whereby people are given a monthly allowance, had helped over a quarter of a million people in just under a year.
The robots are coming and they will bring opportunities for disruption. While some industries and countries have already benefited from the upsides of automation, it is clear that we must be conscious of the impacts that this new intelligence could have on those who are at risk of being left behind. 

READ MORE: Automating oil and gas by Peter Ward

about the author
Michelle Leslie
Alberta, Toronto and now Ottawa. Meteorologist, Journalist & Munk School Of Global Affairs Fellow.