By Jacob Pressman, Investment Research Intern at Cervin Ventures
While some welcome the integration of artificial intelligence, machine learning, robotics, and other forms of automation into the workplace, many of the world’s thought leaders, politicians, media outlets, and much of the general public, feel otherwise. Former entrepreneur and tech-executive-turned-presidential-candidate Andrew Yang posits that automation will cause “Great Depression-level unemployment and violent unrest.” Tesla CEO Elon Musk shares a similar sentiment, saying at the recent World Artificial Intelligence Conference that “AI will make jobs kind of pointless.”
We find the Skynet doomsday theory a bit overblown. On the contrary, we believe that:
1. The future of work will manifest itself as a transition rather than a destruction; and
2. The effects on the labor market and society are, to a great extent, in our control.
Jobs will change, not vanish
The entrance of new tech into the workforce will not lead to the upheaval or immediate destruction of human jobs. These jobs are more likely to change in nature rather than flat-out disappear.
In a January 2017 McKinsey Global Institute report, researchers identified that activities involving data collection, data processing, and predictable physical labor were the easiest to automate with currently available technology and that tasks such as these make up 51 percent of economic activity in a developed economy. But this estimate does not mention that the same researchers suggest any one job includes 20–30 different associated activities and less than 5 percent of occupations consist entirely of automatable activities.
Echoing this sentiment, a June 2019 Deloitte Insights report debunked the myth that robots will take our jobs. The report reads, “While jobs are changing in nature because of automation, they will not disappear altogether.”
The changing nature of work also means a demand for different skills. Experts agree that the skills most valued in the future will transition away from those for which machines exceed human capabilities (like data collection and processing) and toward those which could be considered more uniquely human in nature (emotional intelligence, social skills, creativity, etc.). The Deloitte Insights report characterized this as a shift in skill bias “from hands, to head, to heart,” mirroring the shift in labor force skill requirements that has occurred over the past century, transitioning from menial work (like working on farms or building roads) to jobs which require thinking and are potentially more challenging and varied.
Another aspect of this transition is the shift in traditional workplace culture and worker identity. With the rise of the gig economy, the standard employee identity and traditional workplace environment have evolved into more independent contractor or freelance worker identities, as well as remote or virtual workplace culture. Gig companies like Uber, Upwork, DoorDash and TaskRabbit have opened up new opportunities for workers across the globe. Similarly, the penetration of cloud computing and related technologies have allowed more standard employees to collaborate virtually and complete assignments from remote locations.