Abstract
We study the projected impact of automation on employment in the forthcoming decade, both at the macro-level and in actual (types of) sectors. Hereto, we unite an evolutionary economic model of multisectoral structural change with labor economic theory. We thus get a comprehensive framework of how displacement of labor in sectors of application is compensated by intra- and intersectoral countervailing effects and notably mopped up by newly created, labor-intensive sectors. We use several reputable datasets with expert projections on employment in occupations affected by automation (and notably by the introduction of robotics and AI) to pinpoint which and how sectors and occupations face employment shifts. This reveals how potential job loss due to automation in “applying” sectors is counterbalanced by job creation in “making” sectors as well in complementary and quaternary, spillover sectors. Finally, we study several macro-level scenarios on employment and find that mankind is facing “the usual structural change” rather than the “end of work”. We provide recommendations on policy instruments that enhance the dynamic efficiency of structural change.
Highlights
Mankind is on the brink of the Fourth Industrial Revolution in which breakthrough technologies such as artificial intelligence, robotics, data science, quantum computing, internet-of-things, etc. will enable advanced applications such as social robots, autonomous vehicles, virtual assistants, 3D printing and desktop manufacturing, etc. (e.g., [1])
We allow for a higher degree of specificity of narratives on the structural change driven by automation and place extant labor economic theories in a sectoral perspective
With the introduction of these additional dimensions, we enable providing an overview of which specific sectors and occupations are affected and allow further disentanglement of displacement and countervailing effects of automation
Summary
Mankind is on the brink of the Fourth Industrial Revolution in which breakthrough technologies such as artificial intelligence, robotics, data science, quantum computing, internet-of-things, etc. will enable advanced applications such as social robots, autonomous vehicles, virtual assistants, 3D printing and desktop manufacturing, etc. (e.g., [1]). With regard to the effect of automation using robots and AI, there are articles in popular media, consulting reports [4,5], and scientific publications (e.g., [6,7,8]) of how introduction of AI, robots, and automation affects a large share of workers and may even create a future with structurally high levels of unemployment (or even the “end of work” [7]), stagnating median wages, and growing income inequality With such consequences, further automation may well be economically and socially unsustainable in the long run
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