People consider employment and job opportunities as major issues. Much of the blame for lost jobs goes to globalization and manufacturing facilities overseas. However, automation seems to bear more blame. Technological developments will replace many jobs around the world. Therefore, some solutions that could tackle the job losses will be described. I will identify the problem in the labour market, with respect to automation, and come up with two possible solutions to overcome future job losses.
Many jobs will be exposed to automation, which could result in job losses. For instance, 47 percent of the total employment in the US seems to be at risk. Furthermore repetitive and predictable tasks are at higher risk than jobs involving social interaction and creativity. However, computerization also affects the healthcare sector, where social interactions are unavoidable. This implies that automation could potentially affect the whole labour market and solutions are required.
Although automation leads to future job losses, it also helps to create new jobs in auxiliary sectors. For instance, jobs like app developers did not exist ten years ago. In order to benefit from technological developments, the labour market policy requires change. Governances should focus on cross-disciplinary cooperation, which needs to be tailored to unique locational advantages of a region. This could create the right mix of local specialization, education and welfare policies. Successful examples of sectoral employment programs include Project Quest in San Antiono and Per Scholas in New York City, which successfully facilitated collaboration between employers and other stakeholders. Moreover, in the future, people will probably work in transitional labour markets and switch between socioeconomic statuses like ‘employed’, ‘caring’ or ‘in education’. Employment programs could potentially help people to remain socially included.
Another solution is to provide ownership stakes in robotic machines for employees. To implement this, the ownership of capital should be widened. A form of ownership that seems to have an economic benefit is ‘employee ownership’. Employees could make profit through owned shares and stock options or other forms of incentive payments. Furthermore, this benefits a firm’s performances. Companies like Google and John Lewis compensate their employees with capital stakes. This seems to motivate them to work harder, which results in better firm performances. When employees own capital, they can benefit from technology that replaces them. Thus, no person individually owns the machines, but every employee owns a substantial part. However, people will work less, which could make them feel bored on the long road. Sectoral programs could partly manage this problem, but other additional solutions are necessary.
Changes in labour market policies are required, in order to overcome unemployment or social exclusiveness due to automation. Therefore, governances should focus on sectoral employment programs. Furthermore, employees could own larger stakes in firms instead of receiving wages, in order to benefit from technologies that replace them. Technology continues to develop, and it is important to be prepared in order to benefit from it. Do you think these proposed solutions could tackle the problem of automation in the labour market? Let me know in the comments!
References:
Freeman, R. B. (2015). Who owns the robots rules the world. IZA World of Labor.
Frey, C. B., & Osborne, M. A. (2017). The future of employment: how susceptible are jobs to computerisation?. Technological Forecasting and Social Change, 114, 254-280.
Katz, L. (2014). Long-term unemployment in the Great Recession. Members-only Library.
Lukina, N. P., Slobodskaia, A. V., & Zilberman, N. N. (2016). SOCIAL DIMENTIONS OF LABOUR ROBOTIZATION IN POST-INDUSTRIAL SOCIETY: ISSUES AND SOLUTIONS. Man In India, 96(7), 2367-2380.
Mahdawi, A. (2017). What jobs will still be around in 20 years? Read this to prepare your future. The Guardian. Retrieved December 2, 2017, from https://www.theguardian.com/us-news/2017/jun/26/jobs-future-automation-robots-skills-creative-health.
Rotman, D. (2017). “The Relentless Pace of Automation”. MIT Technology Review. Retrieved December 2, 2017, from https://www.technologyreview.com/s/603465/the-relentless-pace-of-automation/.
Van Dijk, J., & Edzes, A. (2016). Towards inclusive and resilient regional labour markets: challenges for research and policy. Investigaciones Regionales, (36), 169.
Hi Jeroen,
Automatization and increases in task efficiency has been a process that has existed for hundreds of years, think of inventions that made it possible to do a 10 men job by yourself, for example the plow.
Don’t you think that automatization will just cause a shift in the labour market where the focus will change from a hand labour to a service focussed labour market? Like it has been in the past.
Hey! Nice article about the potential effects of automation on (un)employment. I like your examples about the jobs that exist today but didn’t exist a decade ago, like app developers. You also mention the ownership of employees in either a company or investments (i.e. machines) within a company. Further, you talk about social exclusiveness which, I think, could be quite a problem in the future.
One thing I’d phrase otherwise is your final question: “Do you think these proposed solutions could tackle the problem of automation in the labour market?”
Personally, I consider automation not a problem at all but more like a blessing. What’s more, taking a step back, why do we need a job in the first place?
The reason I clicked on your article is because I wrote about the exact same subject a few months ago on Medium;)
I also shared the same article at this blog website under the name: “why innovation is different this time”
In case you’d like to read it on Medium, here you have a link: https://medium.com/@diekstraj/opportunities-through-automation-1141509c4dfe
Hi Jeroen, thank you for this interesting article. In my opinion, automation will definitely boost the emergence of new type of roles in the labor market. However, some conventional roles will still require human engagement. Repetitive desk jobs are really likely to get replaced by AI disruptive techniques such as machine learning and RPA processes. On the contrary, human interaction and human interface will remain extremely valuable in some type of industries. For example, I delivered a strategic roadmap for the implementation of Artificial Intelligence techniques by the global microfinance leader ASA International (FinTech company who provides banking to low income rural secluded women in Africa and Asia). One of the main findings was the fact that personal contact was highly important for assessment of customer credit risk by loan officers, which might seem as a position that is very likely to get replaced by automation. Regarding your proposed solutions, I think enlargement of ownership stake in robotic machines by granting stocks and shares could be a very interesting business model, in which both physical human beings as well as robots take part. In order to tackle the problem of eventual boredom of employees, I think companies should invest in retraining their employees in order for them to be able to replace their conventional repetitive job desk by performance of the higher-skill-required job positions. In this way, instead of losing their job, employees will become a much more valuable asset to the company as well.