Friday Highlight 

Are you ready for robo-jobs?

Are you ready for robo-jobs?

For centuries, mechanisation in various forms has had an impact on working practices.

From Jethro Tull and his seed drill in the very early 18th Century, through Newcomen, Arkwright and Faraday to Henry Ford’s first automated car production line in the early 20th Century, man’s ingenuity has spawned innovations that have brought untold benefits to millions but at the same time have wrought dramatic changes to the way we work.

Historically, the impact on overall employment levels has not been dramatic, as people previously employed in newly obsolete, labour-intensive industries have retrained and/or taken jobs in emerging new industries.

This principle is well illustrated by the 2005 film Charlie and the Chocolate Factory in which Mr Bucket’s job putting the caps on tubes of toothpaste is made redundant by a machine, but he retrains to become the engineer who repairs and maintains said machine.

With the exception of the World War II years, the proportion of US workers in manufacturing has been in almost constant decline since 1939, as illustrated in Chart 1.

However, the fact that major economies such as the UK and US are even now at or close to full employment, with millions of people employed in sectors of the economy that have grown hugely or simply didn’t exist 10 or 20 years ago, would seem to support the idea of job replacement.

That said, there is a legitimate debate to be had about the relative quality of some of those jobs and the labour force participation rate.

The changes brought about by the Industrial Revolution were so profound that it might appear bold – bordering on reckless even – to claim that any subsequent ‘revolution’ could have even more far-reaching consequences. Yet we are, of course, living through exactly such a ‘revolution’ – the Information Revolution.

At the heart of this revolution is the second most abundant element on earth – silicon – and the discovery of its properties as a semi-conductor, combined with the insight of Gordon Moore, whose Law states that transistor density (which we can take as a proxy for computing power) doubles around every 18 months to two years.

History may not repeat itself exactly (or even as tragedy followed by farce) but broad patterns do
tend to recur. It is wise to be very careful (not least in investment) when claiming that ‘this time it’s different’.

Yet there are reasons to at least ponder whether the impact of the Information Revolution on jobs might be more profound than anything that has gone before and, particularly, whether the historic pattern in which old jobs are replaced by new ones (at least for humans) in new industries may be broken.

Three main reasons why now is different

There are three broad reasons to think that this time could be different. First, ubiquity. Historically, machines or robots have been designed to carry out specific tasks in specific industries, essentially on an ad hoc basis.