The belief that robots, automation, and AI simply displace jobs and make humans irrelevant is not borne out in Asia, reports Chris Middleton. However, there are lessons to learn from the technologies’ impact – in Asia and the rest of the world.
Robots and automation are creating more jobs in Asia than they destroy, according to a new report from the Asia Development Bank (ADB).
ADB analysis of a dozen Asian economies between 2005 and 2015 found that rising demand more than compensated for jobs lost to automation. The adoption of robotics and other connected systems stimulated higher productivity and economic growth, creating 134 million new jobs, compared with the 101 million lost to new technologies.
“Rising demand offsets job displacement driven by automation,” says the ADB. “New technologies allow a given output to be produced by fewer workers. While some workers are displaced, improved productivity and lower prices often spur higher demand. Increased demand may even expand the number of jobs in factories that automate part of their production process.
“Moreover, the productivity benefits of new technology in one industry lower production costs in downstream industries through input/output channels, contributing to increased demand and employment across industries. An increase in demand and production in one industry heightens demand for upstream industries as well.”
A banker’s dozen
The bank’s data shows rising demand more than compensating for jobs displaced by technology. Using productivity as a broad measure of technological advance, ADB’s input/output analysis of 12 economies in Asia found that, had output remained the same, technology-driven increased productivity would have brought a 66 percent decrease in employment, equal to 101 million jobs per annum.
However, concurrently higher demand for goods and services related to increased output and technology changes more than offset this, with an associated 88 percent increase in employment, equal to 134 million jobs per annum.
Robotics, AI, and the Internet of Things also create new companies, industries, and jobs, adds the bank. In addition, the greater complexity of modern production and growing demand for new personal services in healthcare, education, finance, and others areas, are countervailing forces against technology-related unemployment, as they create new jobs.
New types of jobs have emerged to handle new technologies,” explains the report. “A detailed analysis of occupation titles in India, Malaysia, and the Philippines found that 43–57 percent of new job titles that have emerged in the past 10 years are in ICT.
“A large share of new job titles emerged in one of India’s fastest growing occupation categories: craft and related workers. This was driven mainly by the different types of specialised technicians needed to work with computer-controlled machines. Such trends will continue.”
The non-routine hotspot
Demand will grow most for non-routine cognitive, social, and ICT tasks, adds the ADB.
“Jobs requiring routine and manual tasks will be less in demand. This is suggested by analysis of five economies in developing Asia showing that, over the past decade, annual expansion of employment in jobs intensive in non-routine cognitive tasks, social interactions, and the use of ICT, was 2.6 percentage points faster than total employment. Average real wages for these non-routine jobs increased faster than for routine and manual jobs.”
However, the bank acknowledges that technological advances threaten jobs as well as fuel productivity and demand. “Emerging technologies such as robotics, 3D printing, artificial intelligence, and the Internet of Things, will help drive future prosperity, yet they also pose challenges for workers,” says the ADB.
“The apparel and footwear industries, for example, are experimenting with completely automated production. Similarly, it is becoming technically feasible to automate more complex service tasks, such as customer support.”
“These developments have raised concern that automation could cause widespread job loss, slow wage growth, and worsen income inequality in developed and developing economies alike,” acknowledges the report. “Some studies indicate that over half of the jobs in some economies in developing Asia are at risk.”
Reasons to be cheerful
That said, the bank says that there are reasons for optimism, despite the threat to many lower-skilled or routine jobs. Technologies often automate only some tasks, not the whole job, says the report. “Automation targets mainly routine tasks, such as soldering components onto a circuit board repeatedly on an assembly line, which is both routine and manual, or counting and dispensing cash in a bank, which is routine and cognitive.
“While task automation may displace some types of jobs, in other cases it restructures the job such that machines handle only the routine tasks, freeing up workers to focus on more complex tasks. The introduction of ATMs, for example, changes the job for bank tellers to one of customer relationship management.”
Job automation goes ahead only where it is both technically and economically feasible, adds the bank. Data on industrial robots in Asia shows that the two largest users are the electrical/electronics industry and automobile manufacturers, each accounting in 2015 for 39 percent of total robot use but, together, only 13.4 percent of total manufacturing employment.
By contrast, producers of textiles, apparel, leather goods, and food and beverages together accounted in the same year for only 1.4 percent of robot usage, but 31.4 percent of manufacturing employment.
“This pattern reflects both technological and economic feasibility,” explains the report. “More technological sophistication is required to give a robot the dexterity to stitch cloth, for example, than to handle large metal parts.”
At the same time, low pay in apparel and footwear is a disincentive to automation: it is often cheaper to employ human beings, suggests the bank.
“In 12 economies in developing Asia that account for 90 percent of employment in the region, an estimated 40 percent of manufacturing and service jobs entail mostly routine tasks, either manual or cognitive. However, many of these jobs are unlikely to be lost. Some will be restructured instead, and automating others will not be technically or economically feasible.”
Nevertheless, automation will hurt workers in routine and manuals jobs, admits the ADB. “New jobs will appear, but they may require skills that such workers do not possess. Further, as firms and industries adjust to new ways of producing and distributing goods and services, the resulting disruptions along existing supply chains may cause unemployment.
“In addition to more job losses, routine and manual workers will likely experience lower wage growth, worsening income inequality.”
Thinking on their feet
Even some routine cognitive jobs may be displaced. The business process outsourcing (BPO) industry is a case in point, says the bank. “Industry experts estimate that, in 2016, 47 percent of BPO workers in the Philippines worked at process-driven tasks requiring little abstract thinking. With the advent of new technologies, such jobs are likely to decline as a share of all BPO jobs.
“There will be new opportunities driven by greater demand for more complex BPO services, which can expand along with technologies. But they will require more specialised training. Workers employed as medical transcriptionists, for example, may lose their jobs to increasingly sophisticated software able to recognise voice, text, and image signals.”
In general, workers with weaker foundational skills could find themselves left behind, concludes the bank. Foundational skills – those that are best learned at school, encompassing not only basic reading, writing, and numeracy, but also digital literacy and teamwork abilities – support the transition into jobs that require higher intensity of non-routine and cognitive tasks, says the ADB.
“Without adequate skills development or retraining, workers with weaker foundational skills face hurdles in seizing the opportunities that new technologies provide.”
Internet of Business says
The bank repeats the oft-quoted belief that automation and robotics free up human beings to do more creative, cognitive, non-routine work. While there is evidence for that, the reverse is sometimes the case, too: humans often end up in menial support roles to the machines, as our recent report on the new robot-powered restaurant in the US explained.
That aside, it is clear that skills, not unemployment in simple terms, will be the real battleground. And not only in Asia: governments throughout the world need to pursue education reform and promote lifelong learning in order to give human beings the best chance against the machines.
In particular, schools need incentives to strengthen the foundational skills that enable individuals to learn – and to relearn. Critical thinking and teamwork will be key abilities to acquire for the future, along with transferrable skills, niche/industry-specific expertise, and/or skills in the technologies themselves, such as robotics, AI, the IoT, and data analytics.
The bank says, “For imparting the specialised skills needed to work with new technologies, universities and institutions specialising in technical and vocational education and training (TVET) are key, and they will have to cater not only to the rising number of graduates from secondary education, but also to adults seeking to upgrade their skills or retrain.”
And there is cause for optimism here, too, says the bank: new technologies can facilitate skills development, job-matching, and social protection. Machine learning and big data analytics are increasingly able to personalise services, including via adaptive learning and training – techniques that have been adopted in the West by education publishers such as Pearson, among others.
However, there must be troubling lessons here for the UK. The bank’s finding that rising demand and productivity are the key to ensuring that new technologies don’t create mass unemployment may alarm policymakers: in the UK, productivity is flatlining and growth is low and fragile.
Factor in the unpredictable effects of Brexit, including the risk of large employers quitting the country for continental Europe, and the prospects for local employment may be grim, especially as companies will have little choice but to implement robotics, AI, automation, and other new technologies, in order to cut costs and compete with Asia.
Skills, as ever, will be the key to long-term employability.