Economic implications of robotics and automation

RobotThere is increasingly serious discussion about the implications of major advances in robotics and automation and what these advances mean for the future economy, particularly whether robots will replace humans in many jobs. For example, the OECD has observed that the robots are coming, and MIT economist Erik Brynjolfsson has forecast that robots will replace humans in many basic occupations:

Why AI could destroy more jobs than it creates, and how to save them

I touched on these issues in my speech a couple of weeks ago to the University of the Third Age, Redlands. I expect a gradual economic adjustment to a growing reliance on robots in future decades. Robots will make the economy more productive and mean that we could afford to enjoy more leisure time. While we will enjoy more leisure time, I don’t expect mass unemployment. Robots won’t be able to replace humans in all jobs and I expect we will see even greater numbers of people employed in services occupations, particularly in those involving a human touch – e.g. personal training, yoga instruction, aged care, etc. As one attendee at my Redlands talk commented, the Luddites thought the industrial revolution would cause mass unemployment and they were proven wrong. It’s likely that current fears about robots are equally misplaced.

Advertisements
This entry was posted in Labour market and tagged , , , . Bookmark the permalink.

4 Responses to Economic implications of robotics and automation

  1. Sue Feeney says:

    Good article. My understanding is that the Whitlam government tried to tackle this issue at least conceptually since they saw the writing on the wall. Unfortunately they were replaced by governments committed to preserving jobs in the manufacturing sector thus prolonging the agony that is now Australia’s manufacturing industry.

    However i cannot help having images (stereotypical i know) of a GM worker enthusiastically embracing his new career as a masseur. And, we do indeed need an army of aged care workers in the very near future. But, i would like to see some more ideas on just what these jobs will be in the service sectors and reassurance that seeing this area as a panacea is more than a hopeful chimera.

    • Gene Tunny says:

      Thanks Sue. I think it’s very hard to forecast exactly what those jobs will be. We just need to hope people will continue to be able to sense what other people are willing to pay for and to supply those services.

      > >

  2. Paul McGuire says:

    It would seem common sense that greater automation will make the economy more productive and enable people to have more leisure time. However, I’m not sure that has actually happened in the past. ICTs have made the economy more productive, but people seem to be working longer hours than ever before. I’m not sure why this should be the case, as standard microeconomic theory would suggest that higher incomes would increase the demand for leisure. ICTs have also made it harder for many employees to escape work as they are able (and often expected) to access and respond to work emails after hours. Further advances in technology may make employees even more accessible, e.g. if we all have video conferencing facilities in our homes.

    • Gene Tunny says:

      Yes, good point, Paul, especially regarding professionals. Broadly speaking, however, technological progress has led to a reduction in average working hours. Historical data show a big drop in average (full-time) working hours over the twentieth century, from up around 50 hours per week at the time of Federation to around 40 hours per week or whatever it is now.

      It could be that recent ICT advances have reversed that trend, especially if you consider all the time eaten up by work at home that’s probably not picked up in average hours data. On the other hand, ICT does make it easier to escape work while at work, judging by the number of people you catch checking out facebook, twitter, etc during working hours.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s