Entrepreneurship

18 November 2015

EMPLOYMENT TERMINATOR? 

The impact of outsourcing and offshoring on worldwide employment may ultimately pale in comparison to the disruption caused by next-generation robots, powered by artificial intelligence.

Radical change in the composition of the global workforce, however, is nothing new. Agriculture, for example, has dwindled from around 40% of total US employment in 1900 to less than 2% today.

At the turn of the 20th century, when agriculture was still king, the word “robot” did not yet exist. The commercial robotics industry itself was not born until the 1960s, when the first digitally operated and programmable robot was installed at a General Motors plant in New Jersey.

Last year, annual robot sales reached nearly $11 billion. Today, the overall market for robotic technologies is worth around $32 billion, and is forecast to exceed $80 billion by 2020.

So how will the growth of robotics impact the job market over the coming decades?

Expert opinion is deeply divided.

Some argue that robots are just the latest in a very long line of disruptive new technologies, which increase productivity, create whole new sectors of activity and, ultimately, contribute to the creation of more skilled jobs.

Others are much more pessimistic. Several recent reports suggest that such automation could wipe out whole swathes of jobs, affecting huge numbers of people – including perhaps as much as 47% of the US workforce.

Indeed, according to a just released report by Bank of America Merrill Lynch, 45% of all manufacturing jobs worldwide will be staffed by robots by 2020.

China is currently the biggest buyer of robotics, accounting for around a quarter of all robots sold. The country nevertheless still lags behind developed nations such as Germany and Japan, which boast large auto industries, by far the biggest user of robotics.

Consider that Japan’s automobile sector now includes over 150 robots for every 1,000 employees. Meanwhile, Toyota has announced that it will invest $1 billion in a Silicon Valley research company developing artificial intelligence and robotics. Robots are so important for US electric carmaker Tesla that they are given individual names.

Automation technology is also poised to have a big impact on white-collar professions and service industries. Robotics is increasingly common in the medical care sector – including in surgery – while lawyers can now use computers, rather than manpower, for the discovery phase of cases.

In Japan, a robot-driven taxi service is currently being tested. In the same country, the Kura restaurant chain now uses robots help prepare the sushi at its 260 restaurants, where orders are placed via touch screen, served by conveyor belt and automatically tallied by computer.

In San Francisco, startup Momentum Machines has set out to fully automate the production of gourmet-quality burgers, while McDonald’s recently introduced fully automated touch-screen ordering and payment systems.

The long-term impact of all of this automation remains hard to predict.

In future, in some areas, human employees will surely be increasingly replaced by robots. At the same time, however, that may well create new opportunities that have not yet even been imagined.