Human experience and expertise will still be needed to address areas where robots fall short
An endless debate continues to rage over whether or not robots are taking our jobs, as advances in robotics and artificial intelligence (AI) have made machines smarter and capable of replacing humans in a variety of increasingly complex tasks. But if history tells us anything, the future won’t see a mere replacement of human labor with the rise of the machine.
“If we look at the history of automation and its impact on the society in the last four or five decades, we realize that it is a much more complex story than is often told,” said Mehdi Miremadi, partner at McKinsey & Co.
Automation obviously disrupts many jobs. But it also creates new opportunities—entire new fields of employment, for instance, that may not have existed before robots came along. Fully judging the impact of machines requires thinking about what new fields of endeavor may be created by their presence.
For instance, the massive adoption of automated teller machines in the 1990s didn’t eliminate bank teller jobs, contrary to what many predicted. Instead, teller jobs have increased and even surpassed overall labor growth since 2000, as economist and author James Bessen said in a recent podcast. Bank tellers now simply engage in more complex work that machines can’t do.
Measuring the Impact
It’s a common trope to portray automation as a battle between men and robots—and indeed, there is a great deal of research indicating that there are dangers ahead for employment.
In one of the most dire predictions, Carl Frey and Michael Osborne, researchers at Oxford University, estimated in 2013 that around 47 percent of jobs in the United States were at risk due to automation.
However, Frey and Osborne looked at jobs that could be entirely replaced by machines, rather than activities or tasks, which led to doubts about whether their method of calculation was the most appropriate. In 2016, the Organization of Economic Co-operation and Development came up with a much lower estimate, showing that 9 percent of U.S. jobs were at risk. They made their calculations based on tasks, rather than jobs.
Another study, by consulting firm McKinsey and Co., focused on work activities rather than jobs or tasks, analyzing 2,000 work activities across 800 jobs.
According to McKinsey, 46 percent of current work activities in the United States have the potential to be automated by adapting current technology, representing about $2.7 trillion in wages.
Most recently, the accounting firm PwC reported that 38 percent of U.S. jobs could potentially be at high risk of automation by the early 2030s, more than in the United Kingdom (30 percent), Germany (35 percent), and Japan (21 percent).
One of the most striking findings of the PwC study was that the U.S. financial and insurance sector was almost twice as susceptible to automation as that of the U.K. (61 percent of jobs versus 32 percent). PwC attributed this disparity to the fact that the average education level of financial professionals in the U.K. is much higher than that in the United States. The U.S. financial sector also focuses more on the domestic retail market, where such jobs are more routine and automatable.
It turns out that in wealth management, the simpler the task, the more liable it is to be taken over by machines.