Since Frey and Osborne’s hugely popular paper in 2014, the traditional narrative surrounding automation at work has been that millions of jobs will be lost to the march of technologies such as robotics and artificial intelligence.
It’s not a narrative that has really been supported by the evidence in the intervening years, and indeed, data suggests that those firms investing in these technologies tend to hire more people than their peers who do not. This alternative narrative was reinforced by a recent study from Wharton, which showed that robots are undoubtedly impacting the workplace, but that the only people who may need to fear for their jobs are managers.
Creating jobs
The study found that investing in robots helps to boost the efficiency and quality of work, with the reduced costs often meaning that there are more jobs to go around for their human peers.
The researchers assessed five years worth of business data from across the Canadian economy to understand what impact automation has on employment, labor, and other aspects of working life.
The analysis reveals that robots are generally not replacing workers at all, as while some firms may reduce their workforce after adopting robots, in general the increase in automation results in more hiring overall. This is due to the fact that these firms become far more productive, and therefore need more workers to meed the increase in demand.
“Any employment loss in our data we found came from the non-adopting firms,” the researchers explain. “These firms became less productive, relative to the adopters. They lost their competitive advantage and, as a result, they had to lay off workers.”
Looking at the bigger picture
The authors argue that firms need to think of the big picture when they’re contemplating investing in automation. The key, they suggest is to frame such decisions in terms of how to become more productive, and therefore competitive.
Whereas investing in automation generally helps the overall workforce, however, the researchers did find that managers may not be so fortunate. This is because as various tasks and processes become automated, the errors in those processes fall, which in turn means there is less need for monitoring of the work by managers.
“Technology can generate reports on what the robots did, what material they used, and they can aggregate it at the firm level, division level, to get lots of different operational metrics very easily,” the researchers explain. “And those are the kinds of things that managers tend to do.”
Workforce composition
This decrease in the number of managers is also a consequence of the changing composition of the workforce, as while investing in automation does increase employment across the board, this is not uniformly felt across all skill levels. For instance, both low-skilled workers and high-skilled workers were found to brow in numbers, but middle-skilled workers actually fell.
“When you see a huge decrease in middle-skilled work and an increase in those extremes — high- and low-skilled labor — it means the type of managers you need to manage this new workforce will be different,” the researchers say.
For managers, this spells trouble, as the inevitable standardization of robotic output means that a single manager can oversee significantly more work than when the work is done by humans. This is not the case, however, for managers of high-skilled workers, as managers in areas such as innovation, as opposed to operations, were still in demand.
“Highly-skilled professionals are very good at what they do, better than their managers. They don’t need managers to tell them how to do their jobs or make sure they arrive to work on time,” the researchers continue. “Managing high-skilled workers is much more like coaching or advising. Managers advise them to help them to achieve the best they can at work, and that kind of skill is very different from supervising work.”
Change is inevitable
That such technology-driven change is inevitable is perhaps one of the few things that the doomsayers have gotten right in their hyperbole about robots taking our jobs. It almost certainly won’t happen as quickly or as dramatically as they predict, but it’s fair to say that it will happen eventually.
All of the data to date suggests that organizations do best when they actively embrace new technologies, such as AI and robotics, so that they can boost their productivity and become more competitive. This seems to benefit not just the firm generally but also their workforce. Indeed, any job-related trouble is likely to emerge in those firms that don’t invest and therefore get left behind.
“In the next couple of years, you’re going to see huge industry turbulence, if you haven’t seen it already,” the researchers say. “The firms that figure it out, either by luck or by ingenuity, are going to kill it. And the firms that don’t figure it out are not.”
