Posted on September 27, 2016 by staff

Laying Down the Law: Machines are taking our jobs


Anyone heard of Ned Ludd?

Back in the 1770s in Nottingham the rallying cry from Ludd and his self-styled ‘Luddites’ was this: ‘Machines are going to take our jobs.’

His warning coincided with the birth of mechanisation in the lace weaving industry and the Luddites were ultimately right.

Initially mechanisation caused the industry to grow and create jobs but as productivity grew so job numbers eventually fell significantly.

It’s much the same story now. Fast forward to 2016 and the World Economic Forum (WEF) published a report predicting that five million jobs will be lost to robotics, artificial intelligence (AI) and automation in just four years across the 15 economies that they studied.

Looking longer-term other observers predict an even bigger impact of robotics and AI. At a recent conference I attended hosted by leading technology merchant bank GP Bullhound in Marbella, some of the most prominent technology gurus and investors from across Europe and the world were predicting that 35 per cent of the jobs that we know now in the European economy will have been displaced by technology by 2050.

Of course very erudite people have been wrong in the past so maybe these guys are too. For instance in the 1930s the economist John Maynard Keynes predicted that by the 1980s people in developed economies would be working just two days a week and having a five-day weekend.

As we know working less didn’t happen and history has shown Keynes to be wrong. But are our modern day forecasters wrong too?

I don’t think so. For example according to government statistics there were 300,000 licensed taxi drivers in the UK in 2015 which is one per cent of the UK working population.

Extrapolate that across parcel delivery, distribution and similar jobs gets us to almost three per cent of the UK working population involved in jobs that will disappear with driverless vehicle technology.

That alone gets us well started towards the 35 per cent prediction.

What has tended to happen historically is that low skilled jobs have been automated and humans have just moved up the food chain to more highly skilled jobs but this can’t happen forever.

What we are seeing today is that moving up the food chain is harder because many humans are reaching the limit of their ability to move further up.

As a result we’re seeing a split with demand still growing for very high skilled jobs being created at the same time that many low skilled minimum wage jobs are being created in the service sector with jobs in the mid-tier of skills being depleted by automation.

When automation has become cheap enough to make it economically viable to automate low skilled jobs my view is that the number of ‘conventional jobs’ in our economy will reduce significantly.

I use the term ‘conventional jobs’ because jobs as we know them are, after all, just an application of our time which came about as a result of necessity.

So how about this for a concept?  When the machines are doing everything we can apply our time to caring for our families and each other, sharing knowledge, distributing our technology and advances in medical science with people in less developed economies and yes, Mr  Maynard Keynes, spending more time on holiday!

It may sound wacky but economists around the world are already giving thought how we handle mass conventional unemployment.

Ned Ludd may have been right when he said the machines are going to take our jobs – but they don’t have to take our lives too.