New Industry Department report

I am working my way through the Australian Industry Department’s most recent report.  I should say, it was written under the auspices of their Chief Economist, Mark Cully, and Mark is not only an incredibly bright guy, but a good friend.

The Report covers a lot of ground, but what I’m mainly interested in is its assessment of the effect of automation, robotics and artificial intelligence on the future of work.  Of course I am.

The tone is essentially one of cautious optimism, that the benefits will outweigh the problems, even in the area of employment, though it does qualify this by saying, “even if the temporary adjustments may be painful”.

Anyway, here is a section that gives a pretty summary of their thinking:

As technological progress continues to accelerate, it will have an impact on the demand for skills.
There is considerable debate on which workers are most at risk of being displaced by technology.
Views range from seeing technology as factor-neutral (benefiting all workers equally), to seeing
technology as skill-biased (where an occupation’s skill level is a significant indicator in determining
how susceptible it is to automotive technologies). The challenges presented by more automation are
not limited to low-skilled positions, as robots are increasingly replicating the tasks of medium and
high-skilled workers. The silver lining is that higher productivity will eventually deliver cheaper goods
and higher disposable incomes, as it did during the Industrial Revolution. The comparative advantages
of being human — the ability to solve problems intuitively, improvise spontaneously and act creatively
— as well as the unlimited needs and wants of humans suggest that the displacement of jobs due to
automation is unlikely to be long term. Automation will allow for new technologies to develop and allow
workers to utilise those comparative advantages in ways that are currently unimaginable.

I’m glad it mentions the risk to reasonably high-skilled work, and also glad that it acknowledges the unimaginability of what is to come.

I’m less inclined, though, to share their basic optimism.  If we can’t really imagine how things will turn out, it seems a bit blase to presume, as they do here, that things will turn out well.  And even if they do, eventually, I suspect that period of “painful adjustment” might be less temporary than they suggest and in need of some serious management.

The last thing I want to be is a doomsayer — and I’m not — but I think this underestimates just how revolutionary these changes are likely to be.  More to the point, I think it underestimates just how — to use the buzz word of the day — disruptive these changes are likely to be, not just to employment and not just to industries, but to markets and the very foundations of our economic system.

For sure, new work will emerge from these changes, but the real issue is whether it will be of the kind and volume that will be able to absorb and support the workers it displaces.  I see no reason to be particularly confident about that.

Anyway, I will continue to read, and am grateful they are actually looking at this stuff.  If you want a bit more a of summary, Mark Cully was interviewed by the AFR, and you can read that here.

Categories: AI, Automation, Technology, Work

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