The self employed are widely viewed as being in a precarious position in a number of ways. They often lack the kind of social safety net enjoyed by salaried roles, and the job by job nature of the work can render income highly uncertain.
Now, a new study from the University of Buffalo also suggests that the self employed are more at risk of their work being automated. The paper argues that much of self-employed work is low in technical expertise and fairly routine, which places the roles at high risk of automation.
“Those who are self-employed just don’t have the same access to AI resources that corporate employees do, which makes it difficult for them to keep up with these technological advancements,” the researchers say.
Testing the waters
Their findings emerged after reviewing every study published to date on the the impact artificial intelligence may have on the self-employed. This was then compared to the researcher’s own work on groups and teams from around 20 published studies across a range of different work settings. This helped them gain what they think is a nuanced grasp of the risk automation poses to various professions.
Their analysis suggests that roles that require people to collaborate, negotiate and make complex decisions are less vulnerable to automation, due in large part to the difficulties AI has in mastering such roles. This renders the likes of lawyers and doctors less at risk.
They also accept that various new roles will be created, not least in maintaining, developing and even distributing the new technologies.
“It’s like when the computer revolution hit decades ago—there was great fear that computers would replace people,” they explain. “But work just shifted and IT positions grew because we needed more support for our computers and networking.”
The study is interesting, but it does have a number of issues. Firstly, analyses of the various studies looking at the risk of automation have, if nothing else, highlighted the huge variance in the proposed risk of various roles and professions. While you may argue that the ‘wisdom of crowds’ will come into play and that taking these reports in aggregate form will make them more valuable than they appear to be in isolation, it nonetheless seems highly risky to be holding too much sway by reports whose basis seems quite so speculative.
Secondly, the authors make the assumption that a lot of self-employed work is low-skilled and routine. As a recently published report from the Centre for Research on Self-Employment (CRSE) highlights, this is largely not the case, and most dominant segment is what the authors refer to as the ‘project economy’, which consists of highly skilled workers who operate on a project-by-project basis. It’s a form of work the authors argue is five times more prevalent than gig work.
“The project-based freelancers account for 73 percent or £104bn of the £140-145bn economic output that SOC1-3 freelancers contribute to the UK economy,” the authors say. “The freelance gig economy accounts for just 14 per cent or £20 billion. Portfolio and other freelancers make up the balance.”
This gravitas is reflected in the earnings of those engaged in project-based work, with the 2.1 million freelancers earning over twice as much as equivalent employees on average. The freelance workforce consists of the likes of managers, directors and other professionals, and represent by far the most productive aspects of the freelance economy.
A new form of safety net
That’s not to say that the self-employed don’t warrant more attention however. Indeed, a new report from the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) argues that the government needs to act faster than it currently is to ensure that we have a social safety net that’s fit for the 21st century rather than the post-industrial revolution era.
The suggestion comes in the context of 73% of British workers expressing concern about the rising cost of living, with growing concerns around debt, pensions and living standards. Indeed, nearly half of those surveyed for the report said they would struggle to pay an unexpected bill of just £100, let alone any larger economic shocks, whether from recessions or Brexit-related uncertainties.
The survey found a clear distinction between those in self-employed roles, who tend to be higher skilled workers, and those in non-standard, gig economy type work, which tends to be lower skilled and far more volatile. Such workers reported relatively low savings to cope with any fluctuations in earning.
Retraining is preferable
Retraining was the preferred option for many workers, with the popularity consistent across worker types. This could be within their current workplace or outside of their current employment, but unfortunately the report reveals that work related training has waned in recent years. The report says that 30% of workers received some training on the job in 2004, but this had slumped to below 25% in 2017, with what training that is provided focused heavily on those in professions with graduate level requirements.
“Meanwhile, a recent OECD study warns that low-skilled workers at risk of automation are three times less likely to participate than those in jobs more resilient to technological change,” the authors say. “Without adequate opportunities for lifelong learning, these workers will be ‘left behind’.”
The report cites examples from France and Singapore, where citizens are awarded a personal learning account to support their professional development. These are not dependent on particular forms of employment, but rather follow the citizen around wherever they may be employed to give them support in their training and development.
There is clearly a need for changes in the kind of support society offers to self-employed workers, but it’s important that we do so based upon realistic expectations about the challenges they face. By extending social security to all employment types, and adopting a personal learning account to help people maintain their skills, that is likely to hold both high and low-skilled self-employed workers in better stead.
