According to an article that appeared in Fortune earlier this year: Automation could replace 40% of jobs in 15 years. This article joins countless others in sounding the warning bells of the forthcoming AI-style industrial revolution. As we’ve heard so often, AI will replace jobs by the thousands. Almost overnight, half the country will be out of work.
There’s a lot of uncertainty, fear, and doubt being spread on this subject. Admittedly, it would be impossible to tackle this issue from every angle. We won’t even try. However, we can offer our sense of where this industry is, what the effects might be, and where we might be headed within 15 years.
AI Will Replace Jobs Within 15 Years. Should We Worry?
Is it going to happen? Yeah, probably. It’s already happening now. Whether that’s AI, ML, automation, or any number of other technological advances. We’ve heard talk of self-driving cars putting the entire trucking industry out of work overnight. Smart trains running completed automated goods from city to city.
All of that will likely happen to some degree. However, there are actual things happening right now. From unmanned convenience stores to restaurant touchscreens; automation is already happening.
The real question isn’t whether automation or AI will replace jobs. It already is. It already has. The question is how does that hit, where does it hit, and how do we react.
Lucky, we have a bit of a road map to look at. We’ve been through this before.
Not Uncharted Territory
The industrial revolution brought with it massive changes on a national and global scale. Other “real” revolutions brought unrest, uncertainty, and societal shifts across the globe as well.
Big change in technology have always brought change not only to work itself, but how we look at it. Scales of efficiency change drastically when a new process is instituted. Whether that’s the cotton gin, the printing press, the assembly line, the microchip, the list literally goes on.
America, and much of the first world changed drastically in the span of a generation. Seemingly overnight, the United States, Europe, and elsewhere on an albeit lesser scale, moved from an agrarian society to an industrial one.
Over the last 100 years, the shift has moved from an industrial manufacturing-based society to a services based one. So there is a blueprint for this. It is not quite as unprecedented as we might think.
It also may not be as scary as it is being made out to be.
“Since the dawn of the industrial age, a recurrent fear has been that technological change will spawn mass unemployment. Neoclassical economists predicted that this would not happen, because people would find other jobs, albeit possibly after a long period of painful adjustment. By and large, that prediction has proven to be correct.”
Does This Hold True Today?
The above quote captures the less alarmist perspective. That is the notion that yes, it will happen. However, by and large society will survive. If the Industrial Revolution, which saw advances in nearly every technology, didn’t decimate society; will AI?
Of course, this may be comparing apples and oranges. Unemployment during the industrial revolution was relatively low. However, can we trace a straight line from then to now? Do the parallels exist?
Sure, it was easy enough for a laborer to learn how to mine coal instead of chopping down trees for bio-fuel. But what about today? Can it be said that the forthcoming changes due to AI will follow the same line?
It’s hard to say. The part of that quote above that we’ve thus far overlooked is this:
“….after a long period of painful adjustment“
The question is: how long and how painful? We look at the painful adjustment period as the end of the world. Is it? It depends. What’s scary is that society changing upheavals can, and often are, rocky. To put it mildly.
The industrial revolution undoubtedly cost some individuals their jobs and livelihood. Cultural and societal revolutions throughout history (both positive and negative) cost people their lives.
If that’s telling, there’s a lot of stuff that isn’t awesome to look forward to. War, for example. We haven’t licked that one yet. Political and cultural strife, for another. Civil unrest. Even, yes, revolutions.
But at the same time we have also been through a lot this before. Recently enough for some of us to remember. The immediate results aren’t always good. The long-term results? It’s hard to argue that we haven’t made it through and come out ahead on the other side.
Need To Withdraw Some Cash?
To get at the heart of the matter, the general fear is that AI will replace jobs and it will happen suddenly. It will happen so suddenly, we’ll hardly see it coming. This has happened with several industries before. Technological advances always do result in some level of displacement. But to offer a slightly optimistic view, that painful adjustment period often reveals benefits in the long-term.
Some of us are old enough to remember a world before ATM machines. Those that do can remember the strongly held, deeply factual belief that ATMs would change the banking industry by decimating bank teller jobs.
It did. That’s kind of the point though. Automation, whether it’s a self-driving truck or an automated teller machine, is meant to do precisely if not explicitly, that. Destroy jobs.
But it also creates new ones. Now there are ATM manufacturers and the sales force which sells them. There are customer service representatives who help companies troubleshoot technical issues. There are armored car services that collect and deposit money into them. Need more? How about service technicians who make repairs, insurance companies who insure them, and countless other industries and specialties which exist around the ATM industry.
Save for a few which might have existed otherwise (armored car services, for example), that short list of jobs above would not have existed without ATM machines.
Selective Disdain For Automation
The door does not always swing both ways, however. Some of us are young enough to know a world where we scarcely have to go to an ATM. Where banking is done online. Where we can go weeks, months, perhaps longer without setting foot inside a bank or credit union.
Yet few if any have sounded the alarm bells at what PayPal and ApplePay have done to the ATM industry. Or what eBay and Amazon have done to the retail industry.
We like Amazon. But not the darker side of it. The side that hears about poor working conditions among employees or small businesses struggling to compete. We don’t like that side so much. That side is easy to sympathize with and on some level we all do.
However, the benefits to the individual may outweigh that darker side for most of us. We one-click buy and have it (whatever “it” is) within two days. With free shipping. Amazon is even starting to offer one-day shipping on many of its products. Can same-day delivery be too far off?
The operational efficiencies are hard to ignore. For the business as well as the end consumer. Many of us will gladly shake our head or wag a finger at Amazon in public whenever we hear about that darker side.
Then we’ll go home and renew our Prime membership.
This isn’t a bold declaration or a wagging finger as we lament the state of human behavior or patience. It isn’t a love-letter to rampant commercialism or capitalism either. We aren’t passing a moral judgment on whether or not the world’s love for faster, quicker, better, more efficient everything is good or bad.
It is, however, a lesson in business efficiency. It is a lesson, learned in the past time and time again through several instances of technological and societal disruption.
And again, it’s hard to remember that we’ve been here before when we’re stuck in the present worrying about the future.
But Should We Be Worried?
Automation and AI will replace jobs, for sure. But not to sound glib, that’s also kind of the point. Will it be an overnight atomic bomb that causes 40% unemployment? To take a somewhat contrarian approach to the endless outcry:
No, we don’t think so. At least not quite in that way.
40% of the jobs that exist today may be replaced by AI within 15 years. But what does that actually look like? For one thing, the notion of a true “overnight” AI revolution (i.e. all occurring within a year or two) is unlikely. Even in today’s fast-paced, online, on-demand society things rarely happen that quickly.
It isn’t likely to be a true 1:1 swap either. I.e. If there are 3 million truck drivers working in the United States today, there won’t be 3 million self-driving trucks on the road and 3 million out of work truck drivers by, say, 2022.
And like the example above with ATM’s, there will be new opportunities, new industries, and new jobs created to replace the old ones.
But that doesn’t mean there’s nothing to worry about either.
Where Worry Is Warranted
AI scares people. The idea that AI will replace jobs scares them even more. It’s understandable, even if it may be a bit hyperbolic and hysterical at times.
We can’t ignore the progress being made. But we also can’t pretend there won’t be negative effects. We know that automation and AI will replace jobs on some level but we don’t quite know what that will look like yet.
Technological advances often come at the detriment of lower income workers. That can’t be understated. However, those losses often do result in new, higher paying jobs being created, though not necessarily for the displaced individual.
Just as 3 million truck drivers probably aren’t going to lose their job overnight, each truck driver also isn’t going to learn how to service self-driving trucks overnight either.
A Generational Approach
What we think we will see if a continual shift over the next 5-10 years in this space. During this time, the early movers and adopters of these technologies will have a real opportunity to stake a claim, drive the conversation, and begin to show us what a world “run by AI” will start to look like.
During this time, we have an opportunity to prepare. That means understanding, education, and preparation for what lies ahead. We aren’t quite sure what the next inception of the American, or even the global economy will look like.
Over the last ~200 years we’ve quickly moved from an agrarian to an industrial to a service-based economy. What does a post-service-based economy even look like?
At the moment, for all the fears of self-driving cars or automated restaurants, they aren’t really widespread. And strange as it may seem, few people are really pushing to make them widespread in any meaningful way. In truth, while many of these fields are being experimented with, no one leader has come forth and said “THIS is where we’re taking this” and put forth a 15-year plan to do so.
As a result, we may not see the worst of our fears or the best of our imagination in this space come to fruition for a generation. It may perhaps be less, but 15 years seems an aggressive timetable for the true AI revolution. 20 or more seems more realistic. And a lot of that will entail a growing demand for automated services, the phasing out of an older segment of the workforce, and a clear leader or leaders in this space to emerge and steer us down a path. The latter really hasn’t happened yet.
That may be a positive or a negative depending upon your point of view. But until this occurs, much of the uproar over automation, specifically AI and ML, is a bit overblown. It is still very much in the early stages. Caution and curiosity are warranted. But so is realism when wondering if AI will replace jobs tomorrow.
In The End, It’s Complicated
There are questions to be asked and many of them do not have answers just yet. Will AI replace 40% of jobs? It’s hard to say if that number is accurate. An argument could be made that it’s 20%, 40%, 60%, or any other number.
However, we have a responsibility in our industry to do right. By society and even humanity if you’ll accept the melodramatic declaration. We need to be mindful stewards of the world we are creating and be aware of just what that means.
We need to ensure that we are transparently and honestly developing tools for the betterment of society and to be cautions in their application. If, along the way, we can guide society’s understanding of these tools and applications, we can also prepare them for it.
If we follow these guiding principles, the AI revolution may not be as quick or painful as our worst fears imagine. At the same time, it could also become every bit as fantastic as our imaginations are capable of conceiving.