We already wrote an article about why we think automation and job elimination fears are overblown. You can check that out at Will Automation Eliminate Our Jobs? This next portion of the series focuses on why people are getting this wrong. We’ll offer a rebuttal to some common logic streams that people have on this subject…
Incorrect Assumption #1 – Technology’s Existence Automatically Leads to Mass Automation
This is wrong for two reasons:
First, sometimes humans are better at things than machines. For example, we’ve seen predictions about autoamting sales and debt collection teams. Sure, the technology exists. Right now, you can have an auto-dialer call anyone that is late on their payments. That technology existed 10 years ago. And yes, in a few years you might have chatbots capable of doing the same thing (and programmed to counter any responses).
However, people are better at convincing people to act on something. Nobody is going to buy from a machine listing all the wonderful reasons to purchase their product. Ask anyone in sales or marketing and they will tell you that people buy on emotion and not a list of logical reasons. Same goes for collections. You pay because someone has convinced you to do it and not because a machine calls you every day.
There are so many jobs that humans are better at. Why would we implement an inferior solution? We will retain the human interaction pertinent jobs. Chatbots might exist for simple things like FAQs. However for anything complex, we will still turn to empathetic, problem-solving, and rapport-building humans.
Second, just because the technology exists to do something doesn’t mean it’s profitable. We’ve seen people talk about automating barbers, manicurists, massage therapists, and other service related jobs. It’s absurd. A small hair salon is not going to have the money to invest in expensive robots to cut your hair. They might only employ 3 people at a time and you think they can spend the money to purchase and maintain a highly skilled machine? Doubtful.
Robotics have already gained a strong foothold in industries like manufacturing because these companies can afford large capital expenditures and have a strong business case for eliminating hundreds of jobs, while increasing output at the same time. A small business can’t afford this type of technology. Especially not one that only charges $20 for a haircut. These jobs are not going away. And since 2/3 of US jobs are small business (and that statistics is higher in other countries), automation won’t be profitable for the companies that can’t make the investment.
Now with all of this said, we will still see job automation and other changes. However, it’s just not as dramatic as people are predicting. Just because the technology exists doesn’t mean it’s logical, profitable, or capable of being widely used.
Incorrect Assumption #2: All the low skill jobs are going away.
We’ve addressed this before but will repeat our rebuttal. Low skill jobs like cashiers, drivers, and data entry analysts will largely be automated. However, every piece of technology in history has automated low skill jobs. And yet it always rebalances. Agriculture jobs were once the biggest employer around the world. When machines helped automate a lot of that, people went into industry. These jobs have largely been automated in recent years, leading people to service jobs. We think these will largely be automated with AI, robotics, etc. So what low skill jobs will replace them?
Leisure jobs. If we all have more time freed up, we will use that time for leisure activities. So there will be plenty of jobs addressing that increased demand. Entertainment, hospitality, travel, food and drink, exercise/sports, and other fun activities fall under this category.
Customer service and basic technicians. We will always require basic servicing, maintenance, and customer support. It’s easy to train in such functions too.
Service jobs. If we have freed up labor jobs, we can now afford to do interesting services for people. This is largely already happening.
Marketing. This is a skilled job but is also easily learned/entered. So we see a lot of people moving into this field. And as larger companies free up operational costs, they’ll use the excess amount for expansion (increasing marketing jobs).
New sectors. Virtual reality will add a tremendous number of jobs. Some will be skilled (programming, design, etc) and others will be non-skilled. Ditto for things like alternative energy, 3D printing, and more.
Incorrect Assumption #3 – Any time new technology touches a job, it will be eliminated.
A lot of times, technology might eliminate aspects of someone’s job description but it doesn’t necessarily eliminate the job. A widely publicized example is the self-driving car. While it might automate the physical driving, it still necessitates emergency steering or unloading the truck’s cargo.
Sometimes it just changes how they do their work. A replaced McDonald’s cashier or cook might be re-deployed to greet customers, clean the shop, provide better service, or perform food quality control.
Sometimes the product changes. For example, people that work in television or mobile phones might change and work in virtual reality.
Sometimes the job just re-balances. If a bank no longer needs human tellers, they might re-train that same employee on financial planning or sales. Any large company will continue trying to expand their profits (as owners/shareholders demand). So they will take their human talent and create new products, new services, and fund new projects.
Incorrect Assumption #4 – The robots are coming!
When the average person thinks about the upcoming technology boom, they are imagining the types of robots we see in Hollywood. Think of a Terminator type robot minus the killing part. People often think it will be a machine that looks like a human and can do pretty much anything a human can do.
That’s not likely. First of all, the programming and engineering required to make that happen is incredible. Even if it’s theoretically possible, it’s a long long way away. When people talk about robots or artificial intelligence, they are talking about sophisticated machines that do one or a few tasks really well. They don’t look anything like a human. The machines that sense when a red light should turn green… that’s artificial intelligence. That algorithm that determines which Amazon book you should read next is artificial intelligence. The machines that automatically open a letter and sort the check you wrote to pay your bill are robots. As you can see, they are built and coded to do one thing really well.
Now certainly some of these machines will become more and more advanced over the years. However, the Hollywood robot is not coming to steal your job. It takes many complex skills to do the average job. If you do one thing all day long (data entry, sorting mail, etc) then yes your job is at risk. But if you have any level of complexity (interacting with people, critical thinking, creativity, etc) then your job is more likely to be safe over the long-term.
Incorrect Assumption #5 – We Can Ignore Basic Economics
Let’s say that machines do take a lot of jobs. Let’s say that as a result, there will be mass unemployment (or at least underemployment). You now have a large percentage of people that have reduced income and purchasing power. What’s the result of this?
Economics 101 can answer that question very quickly. First, because machines will inexpensively produce goods/services, it will greatly decrease their end cost. We’ve actually seen that over the past century. Almost everyone can afford basic human necessities (communication, transportation, food/water, electricity, etc) in developed countries. The the cost has widely decreased over time. Add more machine productivity to this and it’s even easier to afford.
The more important point, however, is that when there is enough demand for something, someone will take the opportunity to supply it. So in this world of underemployed people, there will exist a market for everything they need and want. And someone will seize that opportunity. If it’s something the machines can produce, it will be affordably priced. If there is no market demand for its end price-point, the machine is disassembled or redeployed to something that does have a market. And guess what happens if the machine doesn’t produce it? That sector gets re-employment!
So if the major corporations are able to automate most tasks, what do you think people do in response? Just starve in the streets? Absolutely not. They find something else to do with their time. They notice that the underemployed have more free time. So they create a market for entertainment and leisure. If the underemployed have a hard time affording a service, they create a local, cheaper service to accommodate the demand in that market.
We don’t need to guess on this. It happens every time in human history. When agriculture jobs were automated, people turned to manufacturing. When those jobs were automated, we turned to service. Now that service jobs are being automated, what do we turn to next? Maybe communication jobs. Tech servicing jobs. Local entrepreneurship. Entertainment and leisure. Maybe to customization (since the machines are mass producers). The key point is simple. Supply always accommodates demand. It’s the first law of economics. Tech people tend to ignore it in their dire warnings on automation.
People are getting overly concerned about automation and job elimination. Individual jobs might be at risk of changing or being automated. However, market economies are very resilient and have re-balanced following technology disruption. This time will be no different. Don’t buy into the fear many people are trying to sell you. However, prepare yourself now with the right future skills so you can thrive in the times ahead. And let Reverse Tide help you do exactly that!