Will automation and the internet of things lead to mass unemployment?

“If we do this wrong, the technology providers could end up destroying hundreds of millions of jobs with products and services in the cloud, which makes these businesses indispensable and very rich,” says Gerd Leonhard, futurist, author and CEO of The Futures Agency.

Leonhard is referring to the threat of automation, of robots coming over here and taking our jobs. It’s almost unthinkable. Only a few weeks ago the UK unemployment rate fell to 5.5% and wage growth rose above 2%. Let the good times roll, some may say, latching onto a new optimism that even pollsters Gallop identified recently.

However, the new jobs bill announced in the Queen’s speech will deliver more apprenticeships to 16-24 year olds but will do little to address the longer term challenge of how to deal with large scale automation. Yes, the short term may look rosy but we surely need a plan to cope with the longer term before it’s too late?

We are not talking about the artificial intelligence robots of Hollywood dreamers or the apocalyptic views of Stephen Hawking and Nick Bostrom here either. This is not Ex Machina. In the real world this is much more mundane and more immediate.

In 2013 Oxford University academics Carl Benedikt Frey and Michael Osborne released a paper, The Future of Employment (pdf), containing a list of occupations with an automation probability score. They estimated that 47% US employment is in the high risk category.

According to their methodology, the top 10 most likely jobs to be automated include telemarketers, insurance underwriters, watch repairers and accountants’ clerks; but high on the list are also legal secretaries, models, estate agents, cooks and dental technicians. It’s a surprising variety. But many feel the predicted rise of the robot is still just a theory.

“It’s another example of statistics flying in the face of common sense,” comments John Timpson, chair of retail chain Timpson in response to the idea that a number of his watch repairing staff could be made redundant to automation. “People will always be at the heart of a successful business. If you want a formula for a great business you have to fill it with great people and no amount of robots can replace that.”

That may be true but it also raises the point that humans, for the foreseeable future at least, are in charge and whether or not a job can be automated doesn’t mean it actually will be automated. There are a number of potential inhibitors including the capital cost of automation as well as certain jobs requiring human interaction.

What do Frey and Osborne think? It’s been two years since the paper was published so has anything changed?

“I think developments have only lent further evidence to the claims in the paper,” says Osborne. “Certainly the areas on which we focussed, machine learning and mobile robotics, have only gathered momentum.”

Osborne has an example: “We expected waiters and waitresses to be non-automatable: what we saw as the requirement to make pleasant small talk with restaurant customers was beyond what we could see a robot server providing. Nonetheless, our algorithm gave waiters and waitresses a (high) probability of computerisation of 94%. Since then, of course, US restaurant chains like Chili’s have introduced Ziosk tablets to their tables, which are able to take orders, recommend specials and take payment more efficiently than a human server.”

Osborne and Frey also point to DeepMind (bought by Google last year for around $400m) which demonstrates machine learning systems can achieve human-level performance in Atari games, and Uber and Tesla, which have made “bullish statements” about autonomy in their vehicles. Throw in Google’s driverless cars and Amazon’s drones and you get the picture.

Some of this may seem a little way off still but think about what’s going on around us already – data harvesting through cloud-based software services and control devices for one. The lifeblood of automation is data and data analytics, one of the fastest growing areas of enterprise software development and according to Bill Ruh, GE’s vice president of software, some industries are already adopting automation and testing the water with new sensors and devices.

“The big money is on two things; zero unscheduled downtime and resource efficiency,” says Ruh. “Neither sound sexy but they are in reality the two sexiest things because the amount of money to be made is incredibly high. If you can predict and manage to ensure you have no outages – no plane delay because of maintenance, no electricity cuts, no disastrous oil pipe leaks, no products leaving factories with faults and therefore you’d have no product recalls – that’s transformative.”

According to Chris Wilder, IoT analyst at Moor Insights & Strategy in Austin, Texas, “there is no doubt that many jobs will become obsolete, or outdated as IoT grows,” he says but adds “new fields and expertise will emerge. Employees must evolve to compete in a knowledge-based economy. Growth in field services, asset management, robotic maintenance, remote diagnostics and analytics expertise will off-set job losses due to the proliferation of IoT.”

Wilder is in good company. Both Frey and Leonhard agree with the idea that new jobs will be created, many of which we have no idea yet what they will be. While Leonhard suggests that there are two main areas – technology and humanity – in which jobs will evolve, Frey also points to the notion that work is becoming increasingly project-based. So not only will we have to deal with changing job functions, we will also have to cope with the increasing idea of self-employment.

So what are we doing about it? Is the education system reflecting the new and expected demand? Do we need more re-training, encouraging workers towards the kind of jobs we’d expect to survive? Are we doing enough?

Director of strategy for the Tech Partnership, Margaret Sambell suggests not. She says the UK is suffering from a lack of digital skills and has been for some time. She adds that 42% of employers recruiting are struggling with hard-to-fill technology vacancies.

Frey suggests an increase in online learning will play a pivotal role here in improving skills across age ranges, to help fill those vital roles. People should be allowed to learn “at their own pace” he says, adding that governments “should not try to protect current or future jobs.” Instead, he says “it is crucial that governments take steps to reduce the cost of education while improving its quality.”

So what about government? In 2012 the current employment secretary Priti Patel contributed to the book Britannia Unchained, described by Jonathan Portes, the director of the National Institute of Economic and Social Research, as having “factual errors” and “slipshod research”. The book claimed British workers are “among the worst idlers in the world” and that the UK “rewards laziness” and “too many people in Britain prefer a lie-in to hard work.”

Patel is looking after British jobs at a time when automation is on the rise and commentators are warning of the threat of mass unemployment. Robots can replace the so-called “idlers” and robots won’t demand wages or strike. But robots and machines don’t pay national insurance and income tax either so surely this is also going to lead to a massive hole in the public purse?

What will happen to public services? Who is going to clean the roads and collect the rubbish? Who is going to administer all those welfare payments? Robots of course.

Leonhard suggests this will fit into what he calls, “a decline of the capitalist system based on consumption.” We will have to rethink the concept of work and jobs he says.

“While we will be freed up from a lot of jobs that no one wants to do, we will have to think collectively about how we cope with this otherwise we will have huge structural issues with kids unemployed,” he says. And do the kids care? Or are they heading into a Britannia Unchained world of idleness?

According to a recent YouGov poll more 15-year olds want to work in technology and science than in films, sports or politics. It’s a small albeit clear sign that the messages are getting through. As Wolfgang Schickbauer, CEO at Voltimum says, “change always provides new opportunities and the internet of things will be no different”. While this is true, change is not always without its winners and losers and for the next generation at least, the nerds look hot favourites to inherit the earth.

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