Tue, 19 Aug 2014 - 21:00
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Is technology eating jobs?

As technology proceeds at a rapid pace, what does that mean for the future of work?  Will we see more and more jobs disappear?  And what if nothing comes along to replace them?

Google for example is well advanced with its plans for a driverless car.  In twenty or thirty years’ time, what could that mean for the large numbers of people currently working as bus drivers, truck drivers, couriers, taxi drivers, hire car drivers, delivery drivers and the like? According to the latest Census data, 266,000 Australians are employed in these occupations.

It might seem impossible to imagine a world where we no longer need people to drive vehicles. Yet no doubt in the 1890s it would have seemed ludicrous to suggest that most of the jobs associated with horses – groom, farrier, coachman, harness maker – would cease to be major sources of employment in rich countries within fifty years. As history shows, the car comprehensively displaced the horse – and in turn whole categories of jobs largely disappeared.

There is a vigorous debate going on today about whether, as ‘software eats the world’, more and more jobs will disappear. One part of the story seems hard to contest:  many types of jobs will be affected by the rise of technology and the number of people employed in them will drop sharply. Much more contentious is the other side of the story: will new types of jobs be created – to work with and leverage the possibilities of technology – that we cannot imagine yet? 

One of Australia’s internet pioneers is Daniel Petre. A long time tech sector executive and investor – as well as author of a prescient 1996 book, The Clever Country?: Australia’s Digital Future – Daniel is a thoughtful observer of and commentator on technology and policy. Daniel is closely watching the debate about technology and the future of work – and recently forwarded me a lively podcast covering these issues. Its participants include Andrew McAfee, Director of the Initiative on the Digital Economy at MIT, author of ‘The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies’; and Ray Kurzweil, Director of Engineering at Google, futurist, inventor, and author of ‘The Age of Spiritual Machines’ and ‘The Singularity Is Near’.

The core issue discussed by the participants in the podcast is the claim that half the jobs in the US will be lost to computers and robots in the next 20 years. You can listen to the full podcast here, but there are certainly some striking points made by its participants. For example, Andrew McAfee argues that historically, the number of jobs created by new technology was greater than the jobs destroyed – but he says he has lost faith that in future job creation will outweigh the job destruction.

Ray Kurzweil says that this claim – that half of US jobs will be lost to technology in coming decades – could also have been made in the early 1900’s: but as the old jobs went away new jobs were created in their place. He points out that we are continuing to destroy jobs at the bottom of the skill ladder but creating jobs at the top of the skill ladder.

McAfee’s fairly gloomy view is at odds with the findings of a 2011 study by management consultants McKinsey, available here. McKinsey surveyed 4,800 small and medium enterprises in developed countries, and found that for each job lost due to technology, the internet created 2.6 jobs. There is also a good discussion of these issues in a recent Economist article, available here­. 

These are obviously vitally important questions for policymakers in every country. If the claim of disappearing jobs is true, what would that mean for employment and for wealth and income distribution? And will it mean the same thing for every country? Will some industries be more susceptible than others to the loss of jobs? Will countries with a strong tech sector handle such a transition better than those which generate most of their prosperity from other industries?

And even if the gloomy view is wrong – in other words, even if the internet keeps creating more jobs than it destroys – what does that mean for the skill levels required of those who will be employed in the future?

As Kurzweil notes, these kinds of predictions have been made before as technology has developed. But of course we have never before had technology at the level of sophistication it has reached today – let alone where it will get to over coming years.

Predicting the future impacts of technology is notoriously difficult, but one thing seems certain: the social and economic effects of technological change will continue to be a topic generating a lot of debate.