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The Ongoing Debate – Do Robots and AI Destroy Jobs?

By Andrew White | July 03, 2017 | 2 Comments

RobotsProductivityGDPAutomationArtificial Intelligence

Last week there was an interesting Comment in the Financial Times (see weekend July 1-2, US print edition) by Tim Hartford (undercover economist) titled, “We are still waiting for the robot revolution“.  The piece explores the real concern, as old as we are, that machines replace people and that the new enthusiasm for AI and machine learning and robots will stoke that fire again.

 

But the article shows how such fears have rarely been realized.  For example, the ATM was to replace bank tellers.  According to the article there are now more bank teller jobs in the US than when the ATM was introduced.

Mr. Hartford refers, presumably, to some paper or analysis by James Bessen of Boston University.  It seems Mr. Bessen has other similar examples including cloth weaving and presumably the spinning jenny.  Apparently employment in the cloth industry increased just as weaving automation became established.  Other examples are given.

Apparently the only example that did prove automation led to redundancy of people is the elevator operator.  But I wonder if this is all an oversimplification.  Surely automation of menial and increasingly complex tasks does replace people.  The right conclusion is that when this happens, it may coincide with a time of increasing demand in that industry (which explains the desire for automation to drive productivity) and so net employment increases, even if employment of constituent parts may fall.  Do the bank tellers of today really only issue cash?

The article then highlights what is far more important than the concern from increased automation.  And the reference is to anemic productivity- which is more significant than robots but less sexy to talk about in the press.

The undercover economist refers to a recent paper by John Fernald (Federal Reserve of San Francisco) and Robert Hall (see The Disappointing Recovery of Output Since 2009) that suggests that the productivity slowdown predates the financial crisis which means the main cause of our productivity challenge predates 2006.  The author then takes a positive view and refers to another article by Michael Mandel and Bret Swanson (See The Coming Productivity Boom – Transforming the Physical Economy with Information) that suggests a new wave of productivity growth is about to emerge.

 

It’s all very pleasing and heartwarming.  But, as you will see from my review of the two papers, we are far from out of the woods on this productivity issue.  And the rosy picture layer out by Mandel and Swanson is more a dialog of what could happen, not really an explanation for how such good things will happen.  Roll on July 4th and be safe out there!!!!
Andrew White

Gartner, Inc.

 

Sent from my iPhone.  Excuse the typos.

 

 

 

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2 Comments

  • Craig Roth says:

    Good posting Andrew. Somewhere there’s an alternate universe where it’s 2017 and there are 10,000 elevator operators and 5,000 buggy whip makers earning enough salaries to support a full family. My guess is I’d probably prefer living in this universe.

  • Jose L. Rodriguez says:

    Two weeks ago the NYTimes had an article underlining what the author considers to be the real threats of AI.
    https://www.nytimes.com/2017/06/24/opinion/sunday/artificial-intelligence-economic-inequality.html