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Robots employment-augmenting rather than employment-reducing

Autor and SalomonsRobots are everywhere in the media again. In February 2017 The New York Times Magazine published an article titled, “Learning to Love Our Robot Co-workers” (Tingley 2017). An article in The Washington Post in March 2017 warned, “We’re So Unprepared for the Robot Apocalypse” (Guo 2017). And, in The Atlantic Derek Thompson (2015, 2016) paved the way in the summer of 2015 with “A World without Work,” followed in October 2016 with an article asking, “When Will Robots Take All the Jobs?

The automation narrative told by these articles and other coverage is a story in which the inevitable march of technology is destroying jobs and suppressing wages and essentially making large swaths of workers obsolete.

What is remarkable about the automation narrative is that any research on robots or technology feeds fear, even if the bottom-line findings of the research do not validate any part of it.

There are some good new research papers and essays that seek to dismantle the claim of a world without work. One such paper is highlighted below.

In a June 2017 paper, titled: “Does Productivity Growth Threaten Employment?” together with a talk at the European Central Bank (ECB) – “Robocalypse Now?”, co-researchers, David Autor and Anna Salomons, set out 200 years of fears of mass unemployment driven by automation.

Autor and Salomon sought to test for evidence of employment-reducing technological progress. Harnessing data from 19 countries over 37 years, they characterize how productivity growth — an omnibus measure of technological progress — affects employment across industries and countries and, specifically, whether rising productivity ultimately diminishes employment, numerically or as a share of working-age population. They focus on overall productivity growth rather than specific technological innovations because (a) heterogeneity in innovations defies consistent classification and comprehensive measurement, and (b), because productivity growth arguably provides an inclusive measure of technological progress: The findings:

In brief, over the 35+ years of data that we study, we find that productivity growth has been employment-augmenting rather than employment-reducing; that is, it has not threatened employment.

Another way to consider the robots taking all the jobs, at least in the short term, is summed up by the outgoing Chief Executive of General Electric, Jeff Immelt who did not mince words regarding his feelings about the impending automation take over. Speaking at the Viva Teach conference in Paris, Immelt said:

I think this notion that we are all going to be in a room full of robots in five years … and that everything is going to be automated, it’s just BS. It’s not the way the world is going to work.

When machines replace jobs, the net result is normally more new jobs

Two of the current leading researchers in labor economics studying the impact of machines and automation on jobs have released a new National Bureau of Economic Research (NBER) working paper, The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment.

The authors, Daron Acemoglu and Pascual Restrepo are far from the robot-supporting equivalent of Statler and Waldorf, the Muppets who heckle from the balcony, unless you consider their heckling is about how so many have overstated the argument of robots taking all the jobs without factual support:

Similar claims have been made, but have not always come true, about previous waves of new technologies… Contrary to the increasingly widespread concerns, our model raises the possibility that rapid automation need not signal the demise of labor, but might simply be a prelude to a phase of new technologies favoring labor.

In The Race Between Machine and Man, the researchers set out to build a conceptual framework, which shows which tasks previously performed, by labor are automated, while at the same time more ‘complex versions of existing tasks’ and new jobs or positions in which labor has a comparative advantage are created.

The authors make several key observations that show as ‘low skilled workers’ are automated out of jobs, the creation of new complex tasks always increases wages, employment and the overall share of labor increases. As jobs are eroded, new jobs, or positions are created which require higher skills in the short term:

Whilst “automation always reduces the share of labor in national income and employment, and may even reduce wages. Conversely, the creation of new complex tasks always increases wages, employment and the share of labor.”

They show, through their analysis, that for each decade since 1980, employment growth has been faster in occupations with greater skill requirements

During the last 30 years, new tasks and new job titles account for a large fraction of U.S. employment growth.

In 2000, about 70% of the workers employed as computer software developers (an occupation employing one million people in the US at the time) held new job titles. Similarly, in 1990 a radiology technician and in 1980 a management analyst were new job titles.

Looking at the potential mismatch between new technologies and the skills needed the authors crucially show that these new highly skilled jobs reflect a significant number of the total employment growth over the period measured as shown in Figure 1:

From 1980 to 2007, total employment in the U.S. grew by 17.5%. About half (8.84%) of this growth is explained by the additional employment growth in occupations with new job titles.

Figure 1

Unfortunately we have known for some time that labor markets are “Pareto efficient; ” that is, no one could be made better off without making anyone worse off. Thus Acemoglu and Restrepo point to research that shows when wages are high for low-skill workers this encourage automation. This automation then leads to promotion or new jobs and higher wages for those with ‘high skills.’

Because new tasks are more complex, the creation may favor high-skill workers. The natural assumption that high-skill workers have a comparative advantage in new complex tasks receives support from the data.

The data shows that those classified as high skilled tend to have more years of schooling.

For instance, the left panel of Figure 7 shows that in each decade since 1980, occupations with more new job titles had higher skill requirements in terms of the average years of schooling among employees at the start of each decade (relative to the rest of the economy).

Figure 7

However it is not all bad news for low skilled workers the right panel of the same figure also shows a pattern of “mean reversion” whereby average years of schooling in these occupations decline in each subsequent decade, most likely, reflecting the fact that new job titles became more open to lower-skilled workers over time.

Our estimates indicate that, although occupations with more new job titles tend to hire more skilled workers initially, this pattern slowly reverts over time. Figure 7 shows that, at the time of their introduction, occupations with 10 percentage points more new job titles hire workers with 0.35 more years of schooling). But our estimates in Column 6 of Table B2 show that this initial difference in the skill requirements of workers slowly vanishes over time. 30 years after their introduction, occupations with 10 percentage points more new job titles hire workers with 0.0411 fewer years of education than the workers hired initially.

Essentially low-skill workers gain relative to capital in the medium run from the creation of new tasks.

Overall the study shows what many have said before, there is a skills gap when new technologies are introduced and those with the wherewithal to invest in learning new skills, either through extra education, on the job training, or self-learning are the ones who will be in high demand as new technologies are implemented.

 

 

5 Reads in AI & Robotics – The Rude Bot Rises

Carer robot.png

 

The AI chatbot who learned via the Unabomber Manifesto!

Charles and his team actually created a chatbot called cobot. It was really simple, and it was really dumb. But the users wanted it to be smart, they wanted to talk to it. So Charles and his team had to come up with a quick and easy way to make cobot appear smarter than it actually was. So they showed the robot a bunch of texts (they started, weirdly, with the Unabomber manifesto) and trained it to simply pick a few words that you said to it, search for those words in the things it had read, and spit those sentences back at you.

The resulting conversations between users and cobot are…. very weird. (Rose Eveleth, Flash Forward) You may also want to listen to Rose’s episode Love and Sex With Robots)

 

A fallback plan for when 95% of human labor isn’t valued or needed due to automation 

Basic Income is not necessarily my ideal scenario, but Andrew gives a terrific overview of the pro’s and con’s in this excellent article. The 95% figure comes from Y Combinator Manager, Matt Krisiloff!

Silicon Valley techies hope a guaranteed income would cushion the blow as automation replaces human jobs. Those with a more utopian bent, such as the organizers of the Swiss referendum, want to open up more options, to let people create art and free the world of what Daniel Straub calls “bullshit jobs.” (Andrew Flowers at FiveThirtyEight)

 

Stanford’s robotic diver recovers treasures from King Louis XIV’s wrecked ship

OceanOne looks something like a robo-mermaid. Roughly five feet long from end to end, its torso features a head with stereoscopic vision that shows the pilot exactly what the robot sees, and two fully articulated arms… Every aspect of the robot’s design is meant to allow it to take on tasks that are either dangerous – deep-water mining, oil-rig maintenance or underwater disaster situations like the Fukushima Daiichi power plant – or simply beyond the physical limits of human divers. (Stanford News)

And just think Frey and Osborne said there is only an 18% probability commercial divers will lose their jobs to robots!

 

Progress in A.I. will affect society profoundly

The first wave of AI is already beginning to pervade our lives inconspicuously, from speech recognition and search engines to image classification. Self-driving cars and applications in health care are within sight, and subsequent waves could transform vast sectors of the economy, science and society. These could offer substantial benefits — but to whom? (Nature – Editorial)

 

In your old age what happens if your carer just happens to be a robot?

“There’s a pressing requirement for robots in the social care of the elderly, partly because we have fewer people of working age,” says Tony Belpaeme, a professor in intelligent and autonomous control systems at Plymouth University. Traditionally among the poorest paid of the workforce, carers are an ever more scarce resource.

Policy makers have begun to cast their eyes towards robots as a possible source of compliant and cheaper help. (Geoff Watts in The Atlantic)

 

What are you reading?

 

 

 

In an era of mass unemployment will we become robots pets?

Industry associations and analysts are a special kind of nuisance. They write research papers with titles like: “A World Without Work;” “Anticipating a Luddite Revival;” “Our Work Here is Done;” “Who Owns the Robots Owns the World;” “Robots not Immigrants Could Take Half of Jobs;” and “AI and Robots Threaten to Unleash Mass Unemployment.” These alarmist titles cause news editors to rely on the research papers like fortune-tellers rely on tealeaves.

Despite the good intentions of the authors and their predictions the research evidence is limited and primarily correlational in nature, few studies have demonstrated a causal relationship between the impacts of robots on jobs.

In the minds of many analysts and researchers, humanity is nearing a robot apocalypse where Robots will have taken over most jobs within 30 years leaving humanity facing its ‘biggest challenge ever.’

Then there are the researchers that believe we will all take on a super human intelligence and be implanted with artificial intelligence and robotic limbs like cyborgs, or Max, Matt Damon’s character in the film Elysium. As Yuval Harari sees it, in the one big area I disagree with him in his otherwise very thorough book[1], ‘ordinary’ humans will be unable to compete with robots or enhanced people:

I think it is likely in the next 200 years or so homo sapiens will upgrade themselves into some idea of a divine being, either through biological manipulation or genetic engineering [or] the creation of cyborgs…It will be the greatest evolution in biology since the appearance of life. But we will be as different from today’s humans as chimps are now from us.

If we are to believe the research then unless we upgrade our brains with an implanted A.I. and bodies with some form of exoskeleton, a combination of Edward Scissorhands and a Turing machine, then those that fail to transform are destined to become the “indeterminate blob” described by Robert Nozick.[2] Or as Steve Wozniak, co-founder of Apple, speculates our robot masters might keep a small number of humans around for pets.[3]

Of course, whilst it will be some time before we are robot pets millions of dollars is being put into development of new kinds of drones with the strength and agility of a Pterodactylus that can deliver books to us within 30 minutes and robots that can empty trash bins because we’ve already solved cancer, climate change and homelessness, right?

The facts are, robots, those mechanized metal arms that now assemble and paint most of our cars, still have a long way to go to reach a tipping-point in manufacturing let alone come anywhere near our grandparents as elder care givers. Incidentally, I’ve never understood why we would need robots to take care of our elders when everyone else is going to be unemployed – surely if we have mass unemployment, we can take better care of our elders than a lump of metal with a potty mouth?

There will of course be more and more robots and it will come with some pain as they displace people from jobs. Technological change, like fashion, is always disruptive, and in the long sweep of human history, that disruption has been one of the fundamental sources of economic growth. Who would have thought that the economy could be predicted on sales of men’s underwear or that wearing a non-functional scarf indoors or beanie hat at World Bank meetings would become the norm?

Is this time different?

Business has always been — if you want to increase your bottom line, you’ll move to increase production by cutting out the human element.

My thesis is that current job displacement by machines is inevitable, and whilst this will lead to a significantly large number of people losing their jobs and yes this could be a long-term scenario, we are a long way from the day when the majority of human beings will have no work.

With increasingly ‘intelligent,’ easier to program and more dexterous machines replacing humans both in the manufacturing and the service sectors there will STILL be new jobs for humans to do – we just don’t know what they are yet — and this is one of the reasons we will need robots for elder care.

I’m hopeful – – the best is yet to come.

 

[1] Yuval Noah Harari. Sapiens: A Brief History of Humankind. New York: Harper, 2015. [Google Scholar]

[2] Robert Nozick. Anarchy, State, and Utopia. New York: Basic Books, 1974, pp. 42–45. [Google Scholar]

[3] Benjamin Snyder. “Apple’s co-founder: We’re all going to be robots’ pets one day.” Fortune, 25 June 2015. Available online: http://fortune.com/2015/06/25/apple-wozniak-robots-pets/ (accessed on 30 March 2016).

 

 

Drones are set to add hundreds of thousands of jobs to the world economy

BBC drone pilot and jobs

 

One of the most read articles on Robotenomics is Five areas in Robotics and their economic impact. The first area in the article I cited is drones. Subsequent client research reports by Robotenomics and articles, such as this one on Amazon’s drones have qualified the employment growth for drone pilots. The BBC have a nice summary of job projections which is well worth a read…

Globally, the world market for piloted drones is forecast to more than double by 2022 and be a 4bn euros ($4.37bn) business per year, according to a European Commission impact assessment report issued in December in conjunction with its proposal to gradually create a legal framework for the safe operation of drones. Europe would represent about 25% of the world market, translating into some 150,000 jobs by 2050.

and…

For the next 40-50 years there’s going to be guaranteed jobs,” for those with special skills as a drone pilot or systems engineer

 

 

 

 

 

 

 

 

5 insightful articles about A.I., Robotics and the jobs debate

How Artificial Intelligence Will Revolutionize Our Lives
On one hand, it may help cure cancer and let robots rather than humans fight wars; on the other, doctors and lawyers may be out of a job. (National Geographic)

Interview with LinkedIn founder touches on A.I. and basic income
“We cannot ignore this problem. Right now, everybody’s punting. We know the share of income that goes to wages is a declining portion, compared with capital expenditures. What does that mean for jobs? Entrepreneurship is part of the answer. Mass-scale entrepreneurship. Before you even get to A.I.” (The New Yorker)

Are We Approaching an Economic Singularity?
Information Technology and the Future of Economic Growth — The idea here is that rapid growth in computation and artificial intelligence will cross some boundary or Singularity, after which economic growth will accelerate sharply as an ever-increasing pace of improvements cascade through the economy. (William D. Nordhaus NBER Working Paper)

The Future of Work: The Three Dimensions of Artificial Intelligence
What worries you most — and/or excites you most — about the future of work and workers? Put another way: What will be the most consequential changes in the world of work and workers, and what anxieties and possibilities will they produce?

“In periods of technology diffusion including the current period, the future of work and workers depends as much on how we deal with the technology as on the technology itself. It is time we corrected AI’s third dimension so we can return to the job of building the future of work.” (Pacific Standard)

Rodney Brooks warns that technologists must consider how advances in robotics and AI will eradicate jobs.
Brooks admitted he was sometimes guilty of focusing on technological innovation rather than its social implications himself. But he added that it was increasingly clear that this needs to be part of the debate. “Technological innovations can have severe impacts on society,” he said. (MIT Technology Review)

Robot economy – growth and progress is not a one way street

Over the past two centuries, human ingenuity has produced groundbreaking innovations that have reshaped industries and improved the quality of life for people around the world. The Industrial Revolution, which is said to have reached its peak in 1840, heralded a time of ‘great optimism,’ of talks about ‘full employment,’ longer life-expectancy and technological advances. A few decades later the developed world entered a downward swing in industrial capitalism and a long period of social and economic depression lasting from 1873 to 1879, followed by a period of very low growth and deflation until 1896.

This period coincided with the emergence of the Age of Steel and Heavy Engineering, generally known as the Third Technological Transformation, or the second industrial revolution, which began around 1870 until the late 1920s and was far more complex than the Industrial Revolution.[1] The main technological advances were the substitution of steel for iron as an engineering material, the start of the petroleum and electric-power industries, and the development of the internal-combustion engine. Steel, gasoline, and the internal-combustion engine made the automobile possible. Technological spin-offs from these advances resulted in the creation of a number of new industries such as the telephone networks and road networks which heralded a need for new skills and vast investments in infrastructure.

In the 1950s onwards more new industries arose such as air transportation, consumer electronics, computers, pharmaceuticals and plastics, and in the last twenty to fifty years the computer and Internet sectors have once again led to the creation of new industries and skill sets.

The world economy is six times larger than it was fifty years ago. New technologies have promoted economic growth, and have paved the way for more efficient production systems in a wide range of industries.

During each technological development or breakthrough, whole industries have been demolished and new ones created – resulting in long depressions and redundancies followed by the need for new job skills, and ultimately leading to an improved quality of life.[2]

History may not be a great predictor of the future, but the technological transformations of the last 250 years or more give a good indication of the long waves of economic development that the world has passed through, and may provide us with a better understanding of where we are going in the future. Technology may be speeding up, but economic growth has always been uneven rather than continuous. Technological progress has always resulted in both job destruction and job creation.

Robots fastest growing industries?

Arguably one of the most important growth industries today, with a steady rise in jobs, is within robotics and associated technologies, such as Artificial Intelligence and Machine Learning. Indeed one report titled The Transformation of the Workplace Though Robotics, Artificial Intelligence (AI), and Automation by Littler Mendelson indicates: “Robotics is the fastest growing industry in the world, poised to become the largest in the next decade.”[3] Whilst Forbes Political Editor and a Senior Economic Adviser, John Tamny has indicated: “Robots will be the biggest job creators in history.”[4]

Theory, claims, and data

Economists and general observers have been discussing the effects of technological innovations on the job market for a long time. The repeated complaint is that technical progress hurts labor whilst at the same time it helps the owners of the capital profit more; through increased productivity with fewer jobs and therefore larger profits, these larger profits are however needed to invest in the machines. Mario Draghi chairman of the European Central Bank suggested the opposite may be true when it comes to investment in technology: “Even before the crisis, many companies were no longer productive partly because they had not invested in new technology.”[5]

Which raises the question should robots be seen as a positive thing, rather than the “dystopian world” some fear?

Notes:

[1] Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

[2] There are several notable studies which use formal modeling to conclude that technical progress reduces employment in the short run, but not the long run, see for example those by Gali (1999), Basu, Fernald, and Kimball (1998), and Francis and Ramey (2002). These studies indicate that job loss is transitory (and not without pain), but not permanent.

[3] Littler Mendelson (the world’s largest labor and employment law firm): The Transformation of the Workplace Though Robotics, Artificial Intelligence (AI), and Automation (http://www.jdsupra.com/legalnews/the-transformation-of-the-workplace-thro-67856/).

[4] Forbes, Why Robots will be the biggest job creator in world history (http://www.forbes.com/sites/johntamny/2015/03/01/why-robots-will-be-the-biggest-job-creators-in-history/?utm_campaign=yahootix&partner=yahootix)

[5] Interview with Mario Draghi, President of the ECB, conducted by Giovanni di Lorenzo on 17 December 2014, published on 15 January 2015 (https://www.ecb.europa.eu/press/inter/date/2015/html/sp150115.en.html)

See also Technology has created more jobs than it has destroyed, says 140 years of data (H/T)