Home » Artificial Intelligence » Robots and job fears: Destruction of large numbers of jobs unlikely, says new OECD Study

Robots and job fears: Destruction of large numbers of jobs unlikely, says new OECD Study

There is so much doom and gloom associated with robots and jobs it is time to add some common sense to the misunderstandings created by so called experts opinions about robots and jobs – thankfully authors from the OECD may have added some clarity to the debate — ‘finding that on average, across the 21 OECD countries, ‘9% of jobs rather than 47%, as proposed by Frey and Osborne face a high automatibility.’

Capitalism, the term for our global ‘free’ markets, is a uniquely future-oriented economic system in which people invest, make innovations, apply for patents, and in other ways bet on the future. Behind all of this we find the hallmark of humanity, which is our creative intelligence.

It is intelligence that drives these investments and innovations, and intelligence that forges within many of us an intense curiosity of what the future may hold.

It is also intelligence that forges in others an anxiety over what the future holds. For many the future is no longer a promise but a threat!

Pessimism is the easy way out.

This curiosity and anxiety has stirred the same debates in society for generations. On one side there is intense optimism for a future where machines can take over many of the dirty, dangerous, dull and repetitive jobs, opening up new and more ‘interesting and rewarding’ jobs for those that may be displaced.

And on the other side those who are concerned that this time really is different and the machines we are building now, or which we will soon be capable of building, will be so advanced that there really will be no ‘new types’ of jobs for humans – and so they claim the majority of jobs for humans will be eliminated.

To those pessimists I often quote Lord Thomas Babington Macaulay who in 1830 wrote[1] about the prophet’s of gloom:

On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?

In his 1995 book Jeremy Rifkin stated that ‘intelligent machines’ were being ‘hurried in to’ work environments, thus ending work for people.[2]

Now, for the first time, human labor is being systematically eliminated from the production process… A new generation of sophisticated information and communication technologies is being hurried into a wide variety of work situations. Intelligent machines are replacing human beings in countless tasks, forcing millions of blue and white-collar workers into unemployment lines, or worse still, breadlines.

It is 21 years since Rifkin made that claim, yet somehow human ingenuity marches on and continues to create more jobs and new industries. Sometimes new technologies eliminate jobs overall, but they also create demand for new capabilities and new jobs.

Looking with both eyes open

Despite the vast improvements we have made as a society, I wonder why it is that we look with one eye open, only seeing the negative aspect of technological change, instead of opening both eyes and seeing the benefits too. Often studies by ‘research scientists’ which receive significant media attention lead to misrepresentation of the potential benefits and impacts of technology and create fears, sometimes as if it is a fait accompli, even if this is not the intention of the study authors.

A new study by Melanie Arntz, Terry Gregory and Ulrich Zierahn[3] for the OECD argues that studies on robots or computerization eradicating jobs, such as that by Frey and Osborne, lead to a severe overestimation of job automatibility, as occupations labelled as high-risk occupations often still contain a substantial share of tasks that are hard to automate.

9 % of jobs could be automatable

The OECD authors provide far more realistic assessments than Frey and Osborne:

In contrast to other studies, we take into account the heterogeneity of workers’ tasks within occupations. Overall, we find that, on average across the 21 OECD countries, 9 % of jobs are automatable. The threat from technological advances thus seems much less pronounced.

Arntz, et al. argue that the estimated share of “jobs at risk” must not be equated with actual or expected employment losses from technological advances for three reasons.

  1. The utilisation of new technologies is a slow process, due to economic, legal and societal hurdles, so that technological substitution often does not take place as expected.
  2. Even if new technologies are introduced, workers can adjust to changing technological endowments by switching tasks, thus preventing technological unemployment.
  3. Technological change also generates additional jobs through demand for new technologies and through higher competitiveness.

Effectively the authors take into account that not whole occupations, but specific jobs are exposed to automatibility, depending on the tasks performed at these particular jobs.

They also demonstrate the necessity to view technological change as substituting or complementing certain tasks rather than whole occupations, which as I have mentioned before in this blog a major flaw in the Frey and Osborne study.

The OECD study authors state:

We find that in the US only 9% of jobs rather than 47%, as proposed by Frey and Osborne face a high automatibility.

We further find heterogeneities across OECD countries: while the share of automatable jobs is 6 % in Korea, the corresponding share is 12 % in Austria. The differences across countries may reflect general differences in workplace organisation, differences in previous investments into automation technologies as well as differences in the education of workers across countries.

Table 1 Automatibility by OECD Countries

Automatibility by OECD Countries

 

The main conclusion from the paper

Automation and digitalisation are unlikely to destroy large numbers of jobs. However, low qualified workers are likely to bear the brunt of the adjustment costs as the automatibility of their jobs is higher compared to highly qualified workers. Therefore, the likely challenge for the future lies in coping with rising inequality and ensuring sufficient (re-)training especially for low qualified workers.

Too many so called research experts have created way too much fear and public perception, which in turn can lead to bad policy recommendations. We need to be thoughtful in our vision, and analytical in our implementation – and realistic in our expectations of technologies capabilities.

Herbert Spencer’s words in “From Freedom to Bondage” are as relevant today as when he wrote them in 1891:

The more things improve the louder become the exclamations about their badness.[4]

 

[1] Thomas Babington Macaulay, Review of Southey’s Colloquies on Society, 1830 Edinburgh Review

[2] Jeremy Rifkin, The End of Work, 1995 Chapter 1.

[3] Arntz, M., T. Gregory and U. Zierahn  (2016), working paper  “The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis”, OECD Social, Employment and Migration Working Papers, No. 189, OECD Publishing, Paris.

DOI: http://dx.doi.org/10.1787/5jlz9h56dvq7-en

[4] Herbert Spencer, The Man Versus the State, With Six Essays on Government, Society, and Freedom (Indianapolis: Liberty Press, 1891), p. 487.


14 Comments

    • Ron Weintraub says:

      Hmmm, according to a January 2015 report by Friedrich Schneider from Johannes Kepler University, the average size of the shadow economy of 31 European countries in 2014 (in % of official GDP) was 18.3%. Perhaps those operating in the shadows will be the first to employ robots to automate themselves out of the labor aspects of their businesses, while increasing their overall productivity. Drug delivery drones?

  1. Richard says:

    It would be helpful to know the timeframe in which these job losses are expected to take place to get some understanding of how many additional new jobs p.a. the economy would need to generate to minimise the impact, at least in overall employment figures.

    Many of the technological unemployment studies in the last few years do not always make clear either the timeframe or if the jobs lost to technology are incremental to normal employment churn which runs to out 15% p.a.

  2. Argo Johnson says:

    Let’s say society does become automated, why on earth would that be bad? It would mean that people would no longer have to work yet society would be more productive than ever. The patently obvious and logical thing to do in that situation is to redistribute that wealth via UBI.

    Automation of labor will be one of the greatest moments in the entire history of humanity. People who argue against automation and UBI might as well be arguing to bring back slavery.

  3. […] OECD study suggests that we need not fear a robot jobs takeover. […]

  4. random@random.com says:

    9% is definitely better than 40% but 9% + currently unemployment rates = depression levels of unemployment. If that will be permanent, there will definitely need to be ways to rethink how wealth is distributed (such as the UBI). It’s not clear that everyone can be retrained unless there will be an additional 9% of jobs that will be created which the study does not address.

  5. […] Robots and job fears: Destruction of large numbers of jobs unlikely, says new OECD Study […]

  6. […] Turns out the robot apocalypse has been exaggerated – the prediction that 47% US jobs will be automated has been whittled down to 9%. […]

  7. adam simpson says:

    Great post and thanks for sharing the article. One issue I have with the OECD analysis is that it presumes that face to face interaction could pose as a block to automation, particularly in retail and “bookkeeping, accounting…” jobs. Just because these jobs now currently involve a lot of face to face interaction doesn’t mean that they can’t be automated. Restaurants are becoming automated despite 100% of them requiring face to face interactions.

    It’s possible that consumer preference may block some automation. We probably know someone that prefers a carpenter over ikea, but I don’t know that such preferences will block, in the longrun, automation at a level that likely exceeds 9%.

    Admittedly, Frey and Osborne’s 47% is a jaw dropping and the “decade or two” projection provokes some panic however…

  8. […] Robots and job fears: Destruction of large numbers of jobs unlikely, says new OECD Study « RobotEnomicshttps://robotenomics.com/2016/05/18/robots-and-job-fears-new-oecd-study-says-automation-and-digitali… […]

  9. David Pettus says:

    Just measure drivers: long-haul trucking and urban transportation ???

  10. […] as we understand them could be under threat from technology within 20 years(acknowledging there are differences of opinion on […]

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