Economies around the world will have to redesign themselves to adopt automation.
In some countries of the world, working population is constantly decreasing. Not all of these countries will allow people from other countries to migrate. Some of them feel threatened with cultural dilution and therefore are opting for automation. Others are scared of xenophobia, import of ideologies that do not gel with their national culture. Instead of encouraging migration, they are opting for automation.
The advances in the field of robotics, artificial intelligence and machine learning have ushered an era of automation. It is estimated that almost half the activities people are paid almost $16 trillion in wages to do in the global economy, have the potential to be automated by adapting currently demonstrated technology. The technology is expected to change the contour of more than 2,000 work activities across 800 occupations. Since machines do not err, they could raise productivity growth globally by 0.8 to 1.4 per cent annually.
The activities that will be automated would be in sectors like manufacturing, retail trade, food and accommodation services and middle skill jobs. While few occupations are fully automatable, 60% of all occupations have at least 30% percent technically automatable activities. Most predictably, physical activity will be automated more widely, as much as 81%. Although automation is a global phenomenon, four economies”China, India, Japan, and the United States”account for just over half of the total wages and almost two-thirds the number of employees associated with activities that are technically automatable by adapting currently demonstrated technologies.
The Czech writer Karel Capek coined the word “robot” almost a century ago, in a 1920 play about factory androids that each do the work of two-and-a-half humans at a fraction of the cost. Since the science fiction has since become business fact. Robots are commonplace in manufacturing, and algorithms are playing an ever-larger role in companies from UPS to Amazon. With recent developments in robotics, artificial intelligence, and machine learning, technologies not only do things that we thought only humans could do, but also can increasingly do them at superhuman levels of performance. Some robots that are far more flexible”and a fraction of the cost”of those used in manufacturing environments today can be “trained” by frontline staff to perform tasks that were previously thought to be too difficult for machines, and are even starting to take over service activities, from cooking hamburgers to dispensing drugs in hospital pharmacies. Artificial intelligence is also making major strides. In one recent test, computers were able to read lips with 95% accuracy, outperforming professional human lip readers who tested at 52% accuracy.
A report titled A Future That Works Automation, Employment, and Productivity by McKinsey Global Institute on automation suggests that half of today’s work activities could be automated by 2055, but this could happen up to 20 years earlier or later depending on the various factors, in addition to other wider economic conditions. Automation will not happen overnight, and five key factors will influence the pace and extent of its adoption:
1 Technical feasibility: Technology has to be invented, integrated, and adapted into solutions for specific case use
2 Cost of Developing and Deploying solutions: Hardware and software costs
3 Labour Market Dynamics: The supply, demand, and costs of human labor affect which activities will be automated
4 Economic Benefits include higher throughput and increased quality, alongside labor cost savings
5 Regulatory and Social Acceptance: Even when automation makes business sense, adoption can take time
What is pretty evident as of now that no sector will be immune from the impact of automation. It will not displace all the workers. Many workers will continue to work alongside automated part of their work activities.
(Note: This is a summary of the McKinsey’s Report on automation released in January this year).