In the last two decades, information technology has evolved significantly and is gradually being used to automate all manner of jobs and activities. Employment automation technology, along with globalization, has likely been the key driver behind recent stagnating incomes and decreased jobs for low-skilled employees. Since developments in information technology are accelerating (with computing capacity nearly doubling every two years) rather than rising at a steady pace, we should expect to see much more drastic change in the coming years and decades. Automation would no doubt affect low-wage, uneducated jobs in the future. Technologies such as artificial intelligence, deep learning, and program automation will eventually allow computers to perform jobs that demand a high degree of preparation and education.

According to Fortune Business Insights™, the global military robots market size was USD 13.87 billion in 2019 and projected to grow from USD 13.03 billion in 2020 to USD 25.66 billion in 2027 at a CAGR of 10.15% in the 2020-2027 period.

INCREASING COMPETITION

The book, Us vs Them warns of increasing competition in the job market. Graduates who take “knowledge worker” jobs would be challenged not only by low-wage, overseas competitors but also by computers and automated algorithms that can do advanced research and decision-making. When technology vendors compete and innovate, automation can become more competitive and available to even the smallest of firms. If a company can save money by automation, pricing demand would leave no alternative but do so. While there will continue to be employment that cannot be automated, the fact is that a very significant proportion of approximately 140 million people in the United States are working in jobs that are fundamentally routine and repetitive.

The huge majority of these positions will be evaporated by automation in the coming decades and, since this technology will be accessible across the board, there is very little reason to expect that completely new employment markets capable of attracting significant numbers of employees will be developed. The dilemma is not just unemployment. As unemployment rises and incomes drop, discretionary consumer spending and morale will also plunge. The result may be a negative economic trend that would be extremely difficult to arrest. Beyond a certain point, the economic structures of mass retail industries would be challenged, as there would be too few available customers to buy their goods.

Emerging markets have a higher percentage of workers at risk of automation, and wider, younger communities need to be provided for. And they’re far more vulnerable to automation issues. Some cannot even react efficiently. 

WIDENING ECONOMIC DISPARITY 

Increased robot efficiency stimulates a high market for investment in robotics and conventional resources (which is assumed to be complementary to robots and labor). This market is higher in industrialized economies as robots are used more intensively there (the “share-in-production” channel discussed above). As a result, money is redirected from developed countries to fund this capital and robotic accumulation in industrialized economies, resulting in a transient decrease in developing countries’ GDP.

ROBOTS VS WORKERS

Improvements in robot productivity drive divergence between advanced and developing countries if robots easily replace workers, as per Us vs Them. Besides, these improvements will tend to increase income but also increase income inequality, at least during the transition period and possibly in the longer term for some groups of workers in both advanced and developing economies.

The inference from these factors is that, while technical advancement may have led to rising inequalities, its real contribution has probably been dwarfed by the shortcomings in structural governance.

 REMEMBER, THERE ARE TWO SIDES TO A COIN
Like the proverb, “there are two sides to a coin” suggests, there might indeed be a high possibilty as explored in Us vs Them that while automation will take away some traditional jobs, it will also open new avenues. Rather than condemn technology, there is potentially a chance that technical advances will lead to more work and income prospects and more equitable socio-economic results. Innovations can transform economic and social decision-making and generate new market opportunities.