bots versus bohemians: resiliency of labor markets in automated cities
TRANSCRIPT
ABC Meeting Regional Science
Academy “Smart People in Smart
Cities” Banska Bistrica,Slovakia
August 28-30,2016
What impact is automation and related machine work having on employment and wages?
Are there regional variations in effects, and if so, why?
What does the future hold, especially as Machines become “smarter” and we get deeper into the Fourth Industrial Revolution?
Will the effects of the Fourth Industrial Revolution be different than those of prior revolutions?
Predicts mass job loss due to automation and smart systems
In fact, many economists are saying that within the next decade or so, more than 50% of jobs at risk of automation
“as mechanical muscles pushed horses out of the economy, mechanical minds will do the same to humans.”
Leontief (1952): “Labour will become less and less important…More and more workers will be replaced by machines. I do not see that new industries can employ everybody who wants a job”.
Job Loss (-)
Increase in productivity, increase in
income, increase in demand for goods and
services and increase in employment (+)
Rise of new occupations, increase in jobs
(+)
Short-Term versus Long-Term
Schwab, K (2016). “The Fourth Industrial Revolution”
Machines Humans
Manual Tasks that do
not require critical
dexterity
Judgment
Risky, dangerous
manual tasks
Insight
Routine Tasks Intuition
Pattern Recognition Retention and Use of
Tacit Knowledge
(Polanyi’s Paradox),
Self-Learning
Supervised Learning Social and Emotional
Intelligence
Creativity
Manual Dexterity
Intelligence
Artificial
Intelligence
(Weak AI)
Increase in high wage, high skill jobs
Increase in low wage, low-skill jobs
Decrease in medium wage, medium-skill
jobs
Vanishing Middle Class! And Wage
Inequality!
Source: Autor and Dorn (2013) “The Growth of Low-Skill Service Jobs
and the Polarization of the US Labor Market”, American Economic
Review, 103(5)
Source: Autor and Dorn (2013) “The Growth of Low-Skill Service Jobs
and the Polarization of the US Labor Market”, American Economic
Review, 103(5)
Source: Autor and Dorn (2013) “The Growth of Low-Skill Service Jobs
and the Polarization of the US Labor Market”, American Economic
Review, 103(5)
S
ou
rc
e:
Advanced Robots (Including Cloud Robotics) Drones 3d Printing Internet-of-Things Nanotechnology Artificial Intelligence (Including Machine
Learning) • Weak (Narrow) AI
• Strong AI/Artificial General Intelligence
• Superintelligence
High Risk,
Routine Tasks
and Operations
Changes in shares of automatable, non-automatable and semi-automatable occupations between 2010 and 2015 (nationally and by state - US)
Apply Frey and Osborne (2013) classification of detailed occupations (702 in total) by probability of automation • O*Net (US Department of Labor) and Machine Learning
• Automatable: 75% probability or more, Non-Automatable: 25% probability or less, Semi-Automatable is everything in between
• Excluding Farming and Education occupations
Automatable Non-
Automatable
Semi-
Automatable
Key Points: • Mix (Semi-Automatable) is where the action is: Rise of Occupations/Tasks that can be
automated, but still require “humans-in-the-loop” (specialized skills), Machines
outsourcing to Humans (Schintler)
• Rise of the “New Artisans” (Autor)
• Polarization of Middle Class (Katz)
Inconsistent with Wright
(2013). “Middle-Wage Jobs
that Have Survived, and the
States That are Fostering
Them”, EMSI
And Pew Study
HUMAN-MACHINE SYMBIOSIS
What does the future hold, as we move
deeper into the Fourth Industrial
Revolution and as Machines become
more “intelligent??
Microsoft’s AI Chatbox
Machines are
beginning to be
able to pass the
Turing Test
Capable of Judgment, Reasoning, Insight,
and retention and use of tacit knowledge
Updated Polanyi’s Paradox: A Machine
can know more than it can tell.
Resource Exhaustion: Iron runs out…paper
clip production goes Interstellar
Comparison of Game
Complexity
Chess: 10123
Go: 10360
Occupational and Class Structure is Changing
Decrease in Job Polarization – Upper and Lower Wages (Related Skills)
Increasing Polarization within the Middle Wage Class, Rise of occupations that require humans-in-the-loop
Regional Variations Implications for Investment in Human
Capital, resiliency of labor markets, etc