TWN Info Service on UN Sustainable Development (Mar17/05)
17 March 2017
Third World Network
The robots are coming, your job is at risk
Published in SUNS #8424 dated 17 March 2017
Penang, 15 Mar (IPS/Martin Khor*) - Last year Uber started testing
driver-less cars, with humans inside to make corrections in case something goes
wrong. If the tests go well, Uber will presumably replace their present army of
drivers with fleets of the new cars.
Some personally owned cars can already do automatic parking. Is it a matter of
time before Uber, taxi and personal vehicles will all be smart enough to bring
us from A to B without our having to do anything ourselves?
But in this application of "artificial intelligence", in which
machines can have human cognitive functions built into them, what will happen
It is estimated that in the US alone, 4 to 5 million drivers of trucks and
taxis could be rendered unemployed.
The driver-less vehicle is just one example of the technological revolution
that is going to drastically transform the world of work and living.
There is concern that the march of automation tied with digital technology will
cause dislocation in many factories and offices, and eventually lead to mass
Just a day before he left office, former US President Barrack Obama warned in a
farewell interview that "jobs are going away because of automation and
that's going to accelerate," pointing to "driverless Uber" and "displacement
that's going to take place in office buildings across the country."
Also voicing concern about the social impact of automation, Microsoft founder
Bill Gates recently proposed that governments should impose a tax on robots.
Companies using robots should have to pay taxes on the incomes attributed to
the use of robotics.
That proposal has caused an uproar, with mainstream economists like Lawrence
Summers, a former US treasury secretary, condemning it for putting brakes on
One critic suggested that the first company to pay taxes for causing automation
should be Microsoft.
However, the tax on robots idea is one response to growing fears that the
automation revolution will increase inequality as many lose their jobs while a
few reap the benefits of increased productivity and profitability.
The new technologies will cause uncontrollable disruption and add to the social
discontent and political upheaval in the West which had fuelled the
anti-establishment votes for Brexit and Donald Trump.
Recent studies are showing that deepening use of automation will cause
widespread disruption in many sectors and even whole economies.
Worse, it is the developing countries that are estimated to lose the most, and
this will exacerbate the already great global inequalities.
The risk of automation to jobs in developing countries is estimated to range
from 55 to 85 per cent, according to a study in 2016 by Oxford University's
Martin School and Citi.
Major emerging economies will be at high risk, including China (77%) and India
(69%), higher than the OECD developed countries' average risk of 57%.
The Oxford-Citi report, "The future is not what it used to be",
provides many reasons why the automation revolution will be particularly disruptive
in the developing countries.
First, there is "premature de-industrialisation" taking place as
manufacturing is becoming less labour-intensive and many developing countries
have reached the peak of their manufacturing jobs.
Manufacturing processes are more automated today, also in low- and
middle-income developing countries.
Second, while 20th century technologies allowed companies to shift production
abroad to take advantage of cheap labour, recent developments in robotics and
additive manufacturing now enable firms to locate production closer to domestic
markets in automated factories.
Seventy per cent of clients surveyed believe automation and 3D printing
developments will encourage companies to move their manufacturing close to
China, ASEAN and Latin America have the most to lose from this relocation,
while North America, Europe and Japan are the main winners.
Thirdly, "the impact of automation may be more disruptive for developing
countries, due to lower levels of consumer demand and limited social safety
nets" as compared to the developed countries, according to a summary of
the Oxford Martin School report.
The report warns that developing countries may even have to rethink their
overall development models as the old ones that were successful in generating
growth in the past will not work anymore.
"In the light of these technological developments, industrialization is
likely to yield substantially less manufacturing employment in the next
generation of emerging economies than in the countries preceding them. Hence it
will be increasingly difficult for African and South American manufacturing
firms to create jobs in the same numbers that Asian countries have done. In
other words, today's low-income countries will not have the same possibility of
achieving rapid growth by shifting workers from farms to higher-paying factory
Instead of export-led manufacturing growth, developing countries will need to
search for new growth models, said the report.
"Service-led growth constitutes one option, but many low-skill services
are now becoming equally automatable."
It cites a World Bank report showing that developing countries are highly
susceptible to their workforce being affected by increasing automation, even
relative to advanced economies where labour costs are high.
Moreover, countries with lower levels of GDP per capita typically have a higher
share of their workforce "at risk".
"Thus there are reasons to be concerned about the future of income
convergence, as low income countries are relatively vulnerable to
automation," concludes the report.
Another series of reports, by McKinsey Global Institute, found that 49% of
present work activities can be automated with currently demonstrated
technology, and this translates into US$15.8 trillion in wages and 1.1 billion
About 60% of all occupations could see 30% or more of their activities
automated and 5% of jobs can be entirely automated.
But more reassuringly, an author of the report, James Manyika, says the changes
will take decades.
How automation affects jobs will not be decided simply by what is technically
feasible. Other factors include economics, labour markets, regulations and
Which jobs are most susceptible to be affected?
While most people think they would be in manufacturing, in fact many jobs in
services will also be disrupted.
The McKinsey study lists accommodations and food services as the most
vulnerable sector in the US, followed by manufacturing and retail business.
In accommodations and food, 73% of activities workers perform can be automated,
including preparing, cooking or serving food; cleaning food-preparation areas,
preparing beverages and collecting dirty dishes.
In manufacturing, 59% of all activities can be automated, especially physical
activities or operating machinery in a predictable environment.
Activities range from packaging products to loading materials on production
equipment to welding to maintaining equipment.
For retailing, 53% of activities are automatable. They include stock
management, packing objects, maintaining sales records, gathering customer and
product information, and accounting.
A technology specialist writer and consultant, Shelly Palmer, has also listed
elite white-collar jobs that are at risk from "robots" which she
defines as technologies, such as machine learning algorithms running on
purpose-built computer platforms, that have been trained to perform tasks that
currently require humans to perform.
Those she assessed would be displaced include middle managers, salespersons,
report writers, journalists and announcers, accountants, bookkeepers and
While some analysts are enthusiastic about the positive effects of the
automation revolution, others are alarmed by its adverse effects.
Certainly, the technological trend will improve productivity per worker that
remains, and increase the profitability of companies that survive.
While there are benefits at the micro level for those companies and individuals
that thrive in the new environment, there are adverse effects at macro level,
especially retrenchment for those whose jobs are no longer needed.
What can be done to slow down automation or at least to cope with its adverse
The Bill Gates proposal to tax robots is one of the most radical. The tax could
slow down the technological changes and the funds generated by the tax could be
used to mitigate the social effects.
Another radical idea which is generating a lot of debate is to provide
"universal income" to everyone irrespective of whether they are
The high productivity will allow everybody to be paid a comfortable income, and
thus there is no need to worry that automation will displace jobs.
Governments can also take the attitude of "join them if you can't beat
For example, China is seeing major opportunities in joining the technological
revolution and has drawn up plans to invest in robotics and artificial
Other more conventional proposals include upgrading the education of students
and present employees to take on the new jobs required in managing or working
with the automated production process, and training workers to be made
redundant with the new skills needed to work in the new environment.
Overall, however, there is likely to be a net loss of employment, at least in
the short term, and thus the potential for social discontent.
As for the developing countries in general, there will have to be much thinking
of the implications of the new technologies for their immediate and long-term
economic prospects, and a major rethinking of economic and development
strategies is also called for.
[* Martin Khor is the Executive Director of the South Centre, a think tank for
developing countries based in Geneva.]