ARC Advisory Group

Despite Recent Headlines: Automation Can Actually Create More Jobs

Blog Post created by ARC Advisory Group on Dec 31, 2016

The perceived threat that automation poses to workers is in the news again, after an election that turned on the frustration of working-class voters. Last week, Amazon.com Inc. introduced Amazon Go, a store without cashiers, and there have been a number of articles referencing the battle for a higher minimum wage and fast-food automation. A recent article in the Wall Street Journal discussed the prevalent impression that automation is destroying jobs. As an automation engineer, I find the demonization of automation hard to take.

 

A recent article in the Wall Street Journal discusses the prevalent impression that automation is destroying jobs. The article points out that since the introduction of automated teller machines in the 1970’s, the number of bank tellers in America has more than doubled. James Bessen, an economist who teaches at Boston University School of Law, points to that seeming paradox amid new concerns that automation is “stealing” human jobs. To the contrary, he says, jobs and automation often grow hand in hand.  Sometimes, of course, machines really do replace humans, as in agriculture and manufacturing, says Massachusetts Institute of Technology labor economist David Autor in a succinct and illuminating TED talk, which could have served as the headline for this column. Across an entire economy, however, Dr. Autor says that’s never happened.

 

The article goes on to point out the long trail of empirical evidence showing that the increased productivity brought about by automation and invention ultimately leads to more wealth, cheaper goods, increased consumer spending power and, ultimately, more jobs. In the case of bank tellers, the spread of ATMs meant bank branches could be smaller, and therefore, cheaper. Banks opened more branches, and in total employed more tellers, Mr. Bessen says.

 

Some individuals are indeed uprooted and do suffer. In 1900, 40% of U.S. workers toiled in agriculture; today, that figure is less than 2%. Manufacturing employment in industrialized countries has declined in recent decades, as fewer people make more goods. But society, on the whole, has come out ahead.

 

The article concludes that automation changes the job mix, with an increase in better paying, less mundane jobs.  In the article, Mr. Bessen, the Boston University economist, says the problem is not “mass unemployment, it’s transitioning people from one job to another.”  Other countries devote more resources than the U.S. to cushioning and retraining displaced workers. As a share of gross domestic product, Denmark spends 25 times as much, says Dr. Autor.  As a result, we should be open to similar political/privatized solutions to help those displaced.

 

This type of upheaval will also affect automation professionals themselves as pieces of their role become automated in response to vanishing expertise and more capable technology.  Companies will need to adapt the job descriptions AND job locations to reflect the new shifts in required skillsets and changing demographics.

 

“Reprinted with permission, original blog was posted  here. You may also visit here for more such insights on the digital transformation of industry.

 

About ARC Advisory Group (www.arcweb.com): Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.

 

For further information or to provide feedback on this article, please contact akanagali@arcweb.com

 

About the Author:

Mark Sen Gupta

Mark leads ARC's coverage of process automation, process safety, SCADA, terminal automation, and automation supplier services. He is also part of the IIoT Team.

Mark has over 26 years of expertise in process control, SCADA, and IT applications. He began his career as a Process Control Engineer with Mobay Corporation in Baytown, TX working with instrumentation, PLCs, and DCSs. He later joined Honeywell as an Applications Engineer working with DCS and SCADA and later joined the sales group as a Systems Consultant for SCADA, batch, Foundation Fieldbus, and hybrid control products. At Plant Automation Services, he managed the alarm management products and wrote the initial specification for PlantState Suite.

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