However, while concerns about robots taking over the workforce have subsided in recent years (in part because there simply isn’t any evidence to support the idea), the introduction of new technologies will still inevitably have an effect on the job market.
Executive Chairman of cloud technology firm VeUP, Alexander Dick, says, “Throughout history, the introduction of new technologies has had an inevitable impact on the labour market, whether by displacing jobs, creating new ones, or significantly altering those that already exist.” “We are already witnessing this across the economy at the present time, with some new jobs being created, some being displaced, and many being altered by the introduction of technologies like AI and robotics.”
For example, the Kellogg School has studied past periods of technological disruption to determine if there are any trends in terms of the types of workers that are disrupted and, more importantly, how this disruption has affected their present and future income.
Imperatives of danger
The study authors devised a method to employees’ familiarity with emerging technologies. They do this by looking at the jobs and activities associated with each one and seeing if there are any parallels to the work described in recently issued patents.
From 1850 to 1970, the analysis found that manual labourers had the highest rate of exposure to new technologies. From the 1970s onward, as technology began to do more thinking in addition to heavy lifting, it became increasingly common in jobs requiring routine cognitive tasks to be performed.
Interestingly, this procedure meant that workers earning the highest salaries experienced the greatest income decline, even though they possessed the highest-level skillsets.
Even though society as a whole improved with each new technology, there were inevitable winners and losers, and the distribution of productivity and standards of living was far from even.
There were clear variations among the four occupational groups. Particularly vulnerable to the effects of technological change were those who performed manual labour. While this was to be expected, the study also found that those in more cognitive occupations were not immune, especially if their jobs involved repetitive tasks. It’s true that by the 2000s, this group was at the same level of risk as those without a college education.
According to the findings, this has a sizable effect on employment opportunities because there is a direct correlation between technological exposure and employment rates. However, there was also a correlation between exposure and lower income, and this was true even though wage data was not available until the 1980s.
Older workers were found to be particularly vulnerable to this risk, as they experienced slower wage growth than their younger counterparts despite having the same level of exposure to technology. The study authors hypothesise that this is because younger workers invest less time and energy in maintaining outdated skills and have more disposable income to put toward learning new ones.
the most to lose
Not even years of service could guarantee safety. The effects of technology were felt most keenly by the wealthy. When compared to others in the same profession and level of exposure, these workers saw a slower decline in pay of nearly twice as much.
This was especially true of positions that demanded extensive prior experience and put a premium on specific skill sets. It had a significant effect when those capabilities were automated. This provides strong evidence that it is not as simple as technology automating jobs, and that instead, the nature of the job itself changes, resulting in a corresponding shift in the skills necessary for success.
The result is that people who have invested heavily in time, money, and effort to learn and master a skill that is now obsolete. Since their expertise is no longer in high demand, they may face layoffs or, at best, a stagnation in their salary.
One common argument for the benefits of automation is that it will free people to focus on the “softer skills” that make them truly human. The history of technological upheavals shows that jobs requiring interpersonal skills are the least likely to be replaced by automation. In essence, it has always been difficult for technology to simulate human interaction.
Incomes remained high even for those with extensive exposure to technology, and this was especially true of those with high interpersonal skills. As it turns out, this has been the case for some time now; the now-famous analysis by Frey and Osborne also predicted that jobs like nursing would be relatively immune to the coming wave of automation.
Moreover, the study’s authors discovered that technology wasn’t universally negative. By analysing patents from a wide range of sectors, they discovered little to no duplication between patented technologies and common workplace duties. That is, they think that workers’ incomes increased because they were more productive as a result of the new technologies.
While this benefited some, it put others at a disadvantage if their skills were no longer in demand.
The research appears to have double-sided takeaways. One must first possess the ability to learn and adapt quickly and frequently. While recognising that massive open online courses (MOOCs) and other forms of online learning offer low-cost options, the researchers also recommend that policymakers consider subsidising lifelong learning at higher rates than they do now.
The second is that technical skills often seem to be the focus of industry and policy attention today, but soft skills remain a key differentiator between man and machine and deserve the same emphasis. It is essential that we take the lessons learned from previous technological transformations to heart so that we can avoid the disruption they caused.