Since the dawn of the Industrial Revolution, workers like the Luddites in 19th century Britain have feared that they will be replaced by machines and left permanently jobless. To date, these fears have been mostly wrong—but not entirely
WHAT IS BUSINESS AUTOMATION?
There’s a common misconception that automation involves towering robotics, but it can be as simple as a set of tools housed within common business software programs. At its core, automation is about implementing a system to complete repetitive and easily replicated tasks without the need for human labor.
Examples of common workplace automation
According to Townes, by automating repetitive business processes, employees are freed up for tasks that are more valuable than those that can be completed by machines. However, more advanced forms of automation – like machine learning – can now be used to complete higher-order tasks that require a bit more adaptability. The ability of these software programs to learn over time means they pore through massive troves of data quickly and effectively, before contextualizing that information in a useful way to support internal decision-making.
These are some of the ways in which workplace automation is already being adopted by forward-thinking companies:
1. Email marketing
Many small business owners already use at least one form of automation: email marketing. Companies like Zoho and Constant Contact offer software that allows users to tailor the parameters of their email marketing campaign to their liking and then set it to run automatically.
An introductory email can be uploaded into the software and sent as soon as a contact is added. The software is configured to send a follow-up email a few days later, but only to those who opened the original email.
2. Talent acquisition and hiring
Machine learning automation is making inroads in talent acquisition and employee recruitment, said Kriti Sharma, vice president of bots and artificial intelligence at accounting and payroll software company Sage. For human resources departments, automating processes like tracking down potential candidates and scheduling interviews frees up time for workers to determine who is the best fit for their organization.
“It is a big pain to hire the right people,” Sharma said. “A lot is happening in recruitment systems, using AI to match the right people to the right team for the right projects.”
3. Customer service
Customer service departments are also getting an automation makeover with the introduction of tools like chatbots and automated text message marketing solutions. These consumer-facing tools automate typical customer service interactions by answering common enquiries immediately. They only refer customers to a representative when the chatbot is insufficient for handling their needs.
AUTOMATION, JOBS, AND WAGES
On one hand, automation often creates as many jobs as it destroys over time. Workers who can work with machines are more productive than those without them; this reduces both the costs and prices of goods and services, and makes consumers feel richer. As a result, consumers spend more, which leads to the creation of new jobs.
On the other hand, there are workers who lose out, particularly those directly displaced by the machines and those who must now compete with them. Indeed, digital automation since the 1980s has added to labor market inequality, as many production and clerical workers saw their jobs disappear or their wages decline. New jobs have been created—including some that pay well for highly educated analytical workers. Others pay much lower wages, such as those in the personal services sector.
More broadly, workers who can complement the new automation, and perform tasks beyond the abilities of machines, often enjoy rising compensation. However, workers performing similar tasks, for whom the machines can substitute, are left worse off. In general, automation also shifts compensation from workers to business owners, who enjoy higher profits with less need for labor.
Very importantly, workers who can gain more education and training, either on the job or elsewhere, can learn new tasks and become more complementary with machines. For instance, while robots have displaced unskilled workers on assembly lines, they have also created new jobs for machinists, advanced welders, and other technicians who maintain the machines or use them to perform new tasks. In general, workers with at least some postsecondary credentials are often made better off, while those without them often suffer losses.
THE NEW AUTOMATION: IS THIS TIME DIFFERENT?
The “new automation” of the next few decades—with much more advanced robotics and artificial intelligence (AI)—will widen the range of tasks and jobs that machines can perform, and have the potential to cause much more worker displacement and inequality than older generations of automation. This can potentially affect college graduates and professionals much more than in the past. Indeed, the new automation will eliminate millions of jobs for vehicle drivers and retail workers, as well as those for health care workers, lawyers, accountants, finance specialists, and many other professionals.
So we must ask: Is this time really different? Will the ability of workers to adapt to automation by gaining new education and skills be swamped by the frequency and breadth of tasks that machines with AI will perform?
AI will increase the challenges many workers will face from automation, while still contributing to higher standards of living due to higher worker productivity. At the same time, we will need a much more robust set of policy responses to make sure that workers can adapt, so that the benefits of automation are broadly shared.
POLICY IMPLICATIONS
New and better policies should be adopted in the following areas: education and training, “good job” creation by employers, and wage supplements for workers.
Our most important challenge is to improve the breadth and quality of education and training. To become complementary to AI, more workers will need what researchers call 21st century skills. These include communication, complex analytical skills that often require careful judgements of multiple factors, and creativity. The onus is on K-12 and postsecondary schools to adapt and provide greater emphasis on teaching such skills.
