According to Bloomberg Economics’ report released in October 2020, advances in automation technology threaten nearly a quarter of the global workforce with as many as 800 million people facing the risk of their employment becoming obsolete. With many experts forecasting massive human job losses in the future due to the advent of disruptive digital automation technologies, it is necessary to reflect upon the future prospects of human employment and take necessary actions, individually as well as institutionally, to counter the effects of these technologies in displacing humans from jobs. Numerous studies during the last decade have suggested that technological unemployment may be steadily increasing worldwide. The Dictionary of Economics (3 ed.) provides a relevant and contextual definition of technological unemployment: it is the unemployment caused due to technical progress, which applies to particular types of worker whose skill is made redundant because of changes in methods of production, usually by substituting machines for their services. According to Wikipedia, technological unemployment, which is a key type of structural unemployment, is basically the loss of jobs caused by changes due to new technology adoption in work. We are presently on the threshold of a technological revolution, with exponential advances in new and emerging technologies such as the Internet of Things, Machine Learning, Artificial Intelligence, Robotics, Blockchain, 3D printing, Virtual Reality, and many others. These technologies may prove transformative, with the potential to fundamentally change the way we live and work. For workers, rapid advances in these technologies promise to increase productivity substantially, provide better working conditions, make work safer, and provide relief from the tiring drudgery of monotonous work hours that require a miniscule of human mental faculties. Overall, these technologies could help in raising economic output, offering prospects of higher living standards and greater economic security, thus boosting the wealth of nations. The World Bank’s World Development Report 2019 argues that while automation displaces workers, technological innovation creates more new industries and jobs on balance. However, these new changes take time to evolve and, in the meantime, create uncertainty and worry for those whose lives and jobs may be disrupted by the sudden changes. This has been further aggravated by the COVID crisis, bringing closer the possibility of an increasingly automated future of work. The substantive benefits offered, to businesses particularly and humanity in general, foreclose any resistance to the inevitability of these changes. But it is important to prepare for this shift into the future of work caused by technological transformation.
To understand the future of work it is useful to look back into the history of work. This provides us with context to understand the evolution of work into the present and beyond. The First Industrial Revolution, through technological innovations in the 1760s, introduced mechanization in an assembly-line production factory setting. This brought in machines that produced outputs faster and cheaper than were produced manually, prior to that, by artisans working in small workshops, or even from homes. In 1776, Adam Smith enunciated the principles of division and specialization of labor that further motivated the evolution to assembly-line production methods. Smith illustrated the effectiveness of these principles with an example: If all the 18 tasks required to make a pin were completed in assembly-line fashion by 10 different individuals, production would increase substantially in comparison to only a handful of pins being produced by one person performing all the 18 steps in the same period of time. This meant that the work being performed, when broken down into specific tasks in a factory setting, with each worker specialized in performing the single task assigned to them repeatedly in the course of a day, resulted in a substantial increase in product quantities being produced. Hence goods that had previously been painstakingly crafted by hand began to be produced in mass quantities by machines in factories at that time. Workers, instead of learning every aspect of a task as earlier, now needed to learn just one portion of it. This reduced the need for training and the years of practice required for artisanal skills that were formerly more focused on creating quality in the output as compared to the quantity of output, which was the basis of mechanization. For example, one person performing one repetitive task in a faster learning curve development of skills, was enough to produce identical pieces of furniture with a wood-carving machine quickly, as compared to a single piece created by an artisan working long hours carving decorative elements on wood. These technological advances, however, resulted in devaluing artisanal skills. As machines took over labor from humans, and workers increasingly found themselves confined to the same repetitive tasks, the process of deskilling of workers began in earnest. Machines displaced skilled craftsmen but created new job openings for more machine operators. Also, the need to coordinate all these different tasks performed by many workers created a need for managers to supervise and manage the factory enterprises. The mechanization of formerly handcrafted goods, and the removal of production from the home to the factory dramatically increased output of goods and made these cheaper to produce. The focus was, however, on quantity rather than quality, and the low-quality work produced by mechanization was widely criticized. Before the Industrial Revolution, for example, farmers specified what they wanted. and blacksmiths met these individual requirements. With factories, however, standardized products were produced in large quantities. (It would take 200 years and the Japanese Quality Revolution to bring back that artisanal focus on quality, and the close interaction between production and consumption into factories through just-in-time (JIT) manufacturing). Mechanization, specialization, and division of labor created by technological innovation had made working in factories increasingly tedious and monotonous (and sometimes dangerous), with many workers forced to work long hours for pitifully low wages. Thus, even as industrialization increased economic output overall and improved the standard of living for the middle and upper classes who owned or managed the factories, working class people continued to struggle. In the decades to come, outrage over substandard working and living conditions fueled the formation of labor unions, as well as the passage of new child labor laws and public health regulations in factories.
Artisans, due to their highly developed manual skills, could easily adapt to working with the early machinery that required a lot of operator involvement. As factories became larger and widespread, more workers, and additional managers with higher-level skills of planning and organizing were required to operate and manage them. The Industrial Revolution thus resulted in an increase in employment opportunities. In the 19th century, steam-powered machinery made the availability of cheap paper profitable enough for companies to hire additional white-collar office workers towards the shift to increased paperwork and the office. In sum, the era of mass production created vast new job opportunities for blue-collar workers in factories and businesses, while simultaneously creating new openings for skilled workers in white-collar work in the offices. Further, in the second period of industrialization that took place from the late 19th to early 20th centuries, invention of the incandescent light bulb and public availability of electric lighting allowed industrial plants to operate around-the-clock shifts, reducing employee exposure to low-lighting stress, oil smoke and fire risk at work. This allowed workers to perform precision tasks with greater speed and accuracy while making work less dirty, dangerous, and physically punishing. Electric lighting accordingly eliminated much undesirable work, raised worker productivity, and spurred new job creation. This technology relatively increased satisfaction with work and led to better quality of work life, raising productivity, and enabling better living standards. Inventions of the telegraph, telephone, and electricity created new jobs for telegraph workers, telephone operators, and electrical technicians and engineers. In the 20th century, even as agricultural machinery displaced farm workers in rural areas, mechanization generated new employment in retail, offices, medicine, and finance in cities.
A step beyond mechanization is automation. For example, early production machinery, such as the glass bottle blowing machine in the 1890s, required a lot of operator involvement. Semiautomatic machines with mechanization were limited in their production capacity by the speed with which the semiskilled workers could feed gobs of molten glass into the machine and operate the machine through the molding sequence repetitively. By the 1920s, fully automatic machines that gathered glass directly from the furnace were being used. This automated all processes in molding and blowing and required much less operator attention, thus eliminating the workers in the production sequence. Mechanization generally refers to the simple replacement of human tasks by machines. Automation, on the other hand, implies the machines with mechanical, electrical, and/or computerized action by means of programmed instructions combined with automatic feedback control into a system capable of operating without human intervention. The development of this technology has become increasingly dependent on the use of computers and computer-related technologies. Consequently, with the continuing development of computer technologies, automated systems have become increasingly sophisticated and complex. Advanced systems represent a level of capability and performance that surpass, in many ways, human abilities to accomplish the same activities. With the advent of digital automation, highly repetitive activities by humans appear laborious, inefficient, stressful, and exhausting for humans. This type of work appears more suitable for automatic machines since these machines can work 24×7 without breaks and with more accuracy. For example, ATM machines are completely replacing human tellers in banks. Digital technologies are now taking automation further into the domain of human activities to eliminate human tasks altogether. The Internet of Things (IoT) provides automatic feedback from sensors to provide actuation of machines remotely by actuators to automate activities, like those necessary to control or switch machines on/off that are presently performed by humans. Machine Learning facilitates machines to be trained by humans to work on their own. Artificial Intelligence endeavors to make machines equal, or maybe even more intelligent, in comparison to humans. For firms, the only hurdle to full automation and the resulting huge productivity increases is the cost of digitalization and related automation. Further, design and implementation of these new technologies require a highly educated workforce with advanced skills involving more thinking, creativity, and expertise. Which means that humans are, yet, more economical to employ than machines! As a corollary, the cheaper the automatic machines become, the cheaper the humans working on repetitive jobs need to be for them not to be replaced by machines!