Robot revolution: World Bank: 57 per cent of jobs in the OECD could be automated by 2037
A robot revolution is coming to a workplace near you
McKinsey concludes 45 per cent of US workers are at risk
of losing their jobs to automation in the next 20 years.
FERGUS HANSON The Australian 12:00AM July 8, 2017
Imagine a world where an algorithm replaces you on the
board of directors, the pharmacist preparing your medication is a robot and the
branch that used to calculate insurance payouts is made redundant by artificial
intelligence. There is no need to imagine these scenarios as all of them are
real.
This year Fukoku Mutual Life Insurance bought an AI
system to assess insurance payouts, replacing 34 employees. A Hong Kong venture
capital firm, Deep Knowledge Ventures, appointed VITAL (Validating Investment
Tool for Advancing Life Sciences) to its board in 2014. And in 2011 a
university hospital in San Francisco installed robots to process medications.
During initial operations it prepared 350,000 doses of medicine without making
an error.
Speaking to The Australian this week on the impact of AI
and robotics, Seek chief executive Andrew Bassat said: “My view is that we have
enough warning to know that we need to act with urgency to address this issue
and can no longer afford to wait.”
We are in the early stages of understanding how many
Australians will lose their jobs. Overseas research suggests big changes lie
ahead. McKinsey concludes 45 per cent of US workers are at risk of losing
their jobs to automation in the next 20 years while the World Bank estimates 57
per cent of jobs in the OECD could be automated in that period. In March, an
Massachusetts Institute of Technology study found each new robot added to the
US economy reduced employment by 5.6 workers, and this was based on pre-AI
data.
Consulting groups such as BGA predict the world stock of
robots may quadruple by 2025. There is also concern that new jobs created will
not be enough to offset the losses. The MIT study authors expressed surprise at
the negative effects they found because “they indicate a very limited set of
offsetting employment increases in other industries and occupations”.
Initial modelling conducted in Australia is similarly
eye-catching. The Committee for Economic Development of Australia estimates two
out of every five working Australians faces a high probability of having their
jobs made redundant in the next 10 to 15 years, with an estimated 3.2 million
jobs that today involve driving on the immediate chopping block as driverless
vehicles arrive.
How do we retrain Australians at scale and into what
industries? If there is no demand for human pharmacists, paralegals and
surgeons the corresponding university courses won’t be of much use. Nor is it
likely that, as artificial intelligence surpasses human cleverness, we could
all shift into STEM (science, technology, engineering and mathematics) jobs.
Some analysts express hope that the changes afoot will
create room for more of us to engage in creative pursuits that computers know
nothing about. But robots already produce artworks, compose music we can’t
distinguish from that produced by human maestros and write news stories. The
more confronting challenge is what we do if the new economy fails to produce
enough jobs to keep everyone employed.
The initial ideas on how to respond have been
unconvincing. A universal basic income has been floated but if far fewer of us
have jobs and pay taxes, who exactly will fund this? This is especially so as
the companies that produce and profit from robots and AI are unlikely to be Australian.
OECD modelling finds a universal income would be full of problems and fail to
cut poverty rates.
Notions the unemployed will be happy to amuse themselves
with immersive 3-D experiences and games also seem far-fetched. If the jobless
rate is anything like that suggested by the more aggressive models, revolution
seems far likelier without dramatic changes. As MIT economist Andrew McAfee
told a retreat of the world’s leading artificial intelligence researchers in
January: “I am less concerned with Terminator scenarios. If current trends
continue, people are going to rise up well before the machines do.”
Australia is coming at this challenge from a reasonably
strong position. In nominal and purchasing power parity terms it is a top 20
global economy. It has an educated population and resources likely to be in
demand well into the future. Our neighbours in Southeast Asia are not so
fortunate. A recent study found more than half the salaried workforce from
Cambodia, Indonesia, The Philippines, Thailand and Vietnam, 137 million people,
are at high risk of losing their jobs from automation in the next 20 years. The
consequences for regional stability could be serious.
Profits from AI and automation are likely to be narrowly
concentrated. In an opinion piece for The New York Times, Kai-Fu Lee, chairman
and chief executive of Sinovation Ventures, a venture capital firm, and
president of its Artificial Intelligence Institute, painted a stark picture.
The bulk of the spoils, he argues, will go to China and the US because other
countries face an insurmountable obstacle. “AI is an industry in which strength
begets strength: the more data you have, the better your product; the better
your product, the more data you can collect; the more data you can collect, the
more talent you can attract; the more talent you can attract, the better your
product.”
Chinese and US tech giants are already so far ahead it
would be extremely difficult for any Australian firm to join this elite club.
For Lee the consequences point in a single direction: “If most countries will
not be able to tax ultra-profitable AI companies to subsidise their workers,
what options will they have? I foresee only one: unless they wish to plunge
their people into poverty, they will be forced to negotiate with whichever
country supplies most of their AI software — China or the US — to essentially
become that country’s economic dependent, taking in welfare subsidies in
exchange for letting the ‘parent’ nation’s AI companies continue to profit from
the dependent country’s users.”
The fact such wild ideas are getting mainstream airtime
shows how much we need a serious debate. In previous technological revolutions,
new jobs have been created; hoping this will happen again is not a plan.
Australia should invest in better understanding the consequences of AI and
automation at home and in our neighbourhood, then plot a realistic way forward.
Fergus Hanson is head of the International Cyber Policy
Centre based at the Australian Strategic Policy Institute. He is author of
Internet Wars: The Struggle for Power in the 21st Century.
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