Martin Ford is the author of Rise of the Robots: Technology and the Threat of a Jobless Future. Mr. Ford will be the keynote speaker at ISG’s Sourcing Industry Conference, September 28-29 in Dallas. Visit the SIC website to learn more.
Over the past two decades, information technology has advanced dramatically and is increasingly being used to automate jobs and tasks of all types. Job automation technology, together with globalization, has likely been the primary force behind recent stagnant wages and diminished opportunities for low-skilled workers.
Because advances in information technology are accelerating (with computing power roughly doubling every two years), rather than increasing at a constant rate, we can expect to see even more dramatic progress over the coming years and decades. In the future, automation will no longer impact only low-wage, uneducated workers. Technologies such as artificial intelligence, machine learning and software automation will increasingly enable computers to do jobs that require significant training and education. College graduates who take “knowledge worker” jobs will find themselves threatened not only by low-wage, offshore competitors but also by machines and software algorithms that can perform sophisticated analysis and decision-making.
At the same time, continuing progress in manufacturing automation and the introduction of advanced commercial robots will continue to diminish opportunities for lower-skill workers. Technological progress is unrelenting, and machines and computers will eventually approach the point at which they will match or exceed the average worker’s ability to perform most routine work tasks. The result could well be structural unemployment that ultimately impacts the workforce at all levels — from workers without high school diplomas to those who hold graduate degrees.
Most mainstream economists dismiss this scenario. They continue to believe that the economy will be restructured to create an adequate number of jobs in the long run. Historically, this has, in fact, been the case. Millions of agricultural jobs were eliminated when mechanized farm equipment was introduced, resulting in a migration to the manufacturing sector. More recently, globalization and automation in manufacturing has resulted in workers transitioning to a largely service-based economy in the United States and other developed countries.
In the past, technology has typically impacted one employment sector at a time, leaving or creating other areas to which workers could transition. That’s unlikely to be the case this time around. Accelerating change in information technology is ushering in a completely unprecedented level of work capability that may lead to an equally unprecedented level of worker instability.
As technology providers compete and innovate, automation will become more affordable and accessible to even the smallest of businesses. If a business can save money through automation, competitive pressures will leave it no choice but to do so. While there will certainly continue to be jobs that cannot be automated, the reality is that a very large percentage of the 140 million or so workers in the United States are employed in jobs that are fundamentally routine and repetitive in nature. An enormous number of these jobs are going to be vaporized by technology in the coming decades, and because that technology will be available across the board, there is very little reason to believe that entirely new employment sectors capable of absorbing massive numbers of workers will be created.
The problem is not just one of unemployment. As unemployment increases and wages fall, discretionary consumer spending and confidence will likewise plummet. The result could be a downward economic spiral that will be very difficult to arrest. Beyond some threshold, the business models of mass market industries would be threatened as there would simply be too few viable consumers to purchase their products.
I believe that the impact of accelerating automation technology is likely to present an enormous economic, social and political challenge over the next ten to twenty years and beyond. If we are ultimately destined to live in a world in which traditional jobs are simply unavailable and a huge percentage of the population has little in the way of marketable skills or opportunity to earn an income, the only viable solutions to those systemic problems are likely to be radical ones.
About the authorMartin Ford is the author of Rise of the Robots: Technology and the Threat of a Jobless Future. Mr. Ford will be the keynote speaker at ISG’s Sourcing Industry Conference, September 28-29 in Dallas. Visit the SIC website to learn more.
