Impact of Automation: Will it Create More Jobs than It Destroys?

 

Automation is a hot topic in virtually any business landscape. As workplaces become more distributed, customer expectations evolve, and processes change, companies are turning to automation to reduce costs, boost efficiency, and improve business results.

Currently, the market for automation technology is growing at a phenomenal rate. According to one study, Industrial automation will reach a value of $412.8 billion by 2030. Robotic Process Automation (RPA) is expanding at a CAGR of 23.4%, accelerating toward a predicted value of $43.5 billion by 2029. Even intelligent automation is on the rise, as more companies invest in AI solutions.

Among early adopters, automation has proven itself to be a valuable strategy for minimizing errors in workflows, improving business outcomes, and increasing revenue. Unfortunately, many business leaders and employees are still holding back on adoption.

Why? There are many reasons. However, one core concern is uncertainty about the impact automation will have on human jobs. In a world where virtually everything can be automated, specialists are asking whether the human worker will soon become obsolete.

The Impact of Automation on Jobs: An Introduction

Discussions about whether automation will destroy or disrupt the human workforce have been happening for some time. One of the most commonly cited reports on the subject, created by Carl Frey and Michael Osborne is often cited for suggesting around 47% of existing jobs will be replaced by automation. However, it’s often worth noting this report is frequently taken out of context.

Frey and Osborne actually said that some functions within 47% of jobs will be automated – not that almost half of the jobs we know today will disappear.

This isn’t the first time a new technology has led to concerns in the labor market. Just a few decades ago, the introduction of the internet created a similar panic. Many people assumed the internet would completely eliminate their role and make it impossible to find new work. However, the online world actually created millions of new jobs, comprising around 10% of the US GDP.

It’s fair to say that AI and automation will change the job market. After all, automation will remove the need for certain repetitive tasks, which could lead to some roles disappearing. However, most experts believe the number of jobs “eliminated” by automation will be outweighed by the new opportunities created for professionals.

Additionally, the number of jobs that will be completely eradicated by automation is likely a lot smaller than most people realize. According to a report by the McKinsey Global Institute, around 60% of jobs are made up of around 30% automate-able tasks. However, only 5% of existing professions can be automated completely, according to the study.

The Real Impact of Automation on the Workforce

While there have been a number of reports discussing the potentially negative impact of automation on employment, experts have also produced a huge selection of reports showing that AI and automation are beneficial, not destructive. According to the PWC Global Artificial Intelligence study, AI is set to lead to an estimated 26% increase in global GDP by 2030.

The report suggests the increased productivity and efficiency generated by automation will contribute to around 40% of this increase. While AI and automation may eliminate some jobs, PWC believes any job losses created by automation will be offset by the new jobs created by a larger, wealthier economy. Other reports and studies have backed up this mindset.

The Future of Jobs Report created by the World Economic Forum in 2020 found that around 85 million jobs may be displaced by automation, while 97 million new jobs will be created. Research from the University of Warwick also found that only a quarter of the firms that had introduced AI and automation into their ecosystem had implemented any significant redundancy strategies.

Indeed, the number of jobs that were eliminated from businesses after implementing AI and automation was roughly the same as it had been before the new technology was introduced. Around half of the companies surveyed said investing in AI had actually led to more new jobs being created.

How Automation Will Strengthen the Workplace

Many companies are already beginning to see the benefits of adding AI and automation to their workflows. These intelligent tools can automate repetitive and dangerous tasks, from data entry to assembly line manufacturing, making teams more efficient and productive. Not only do they help to protect employees from risk, but they also empower teams to focus on more value-added tasks.

Rather than spending hours on data entry, teams in a workplace that supports automation can focus their time on making emotional connections with consumers and completing creative, strategic tasks.

Realistically, adding automation to the workplace will inherently lead to new demands from companies. In order to leverage automated solutions correctly, companies will need to hire employees capable of working with and configuring automated workflows. The right automation solutions require continuous updates and improvements, from real human beings.

However, it’s worth noting that the new job market will require more upskilling and reskilling, to ensure employees are capable of handling the new tasks they’re expected to face. The World Economic Forum predicts in the next 5 years, half of all workers will need to access some manner of extra education to prepare for the change that automation brings.

What this tells us is that companies won’t necessarily be looking to replace their workers with bots, but enhance the skills and develop the talents of their existing employees, so they can work in unison with the right intelligent solutions.

Companies that do invest in actively preparing their employees for the age of automation are more likely to see significant benefits. According to research from the Columbia Business School, investing in AI and automation helped companies to increase their revenue by 15%, while also providing them with the tools they needed to expand their product range and market reach.

The more companies grow, the more employees they’ll need to handle the tasks that simply can’t be automated, like building empathetic connections with consumers and coming up with creative solutions to problems.

 

Automation will Disrupt, not Destroy

Any new technology brings change to a business. Just as the internet opened new doors for companies, providing them with different avenues to connect with and engage their target audience, automation will unlock endless opportunities for enhancing and improving business processes. With this evolution will come a change to the way companies hire and train employees.

However, it’s unlikely that automation will actually eliminate the need for human workers. No matter how intelligent and effective automated systems become, there will always be a need for employees who can create, innovate, and communicate empathetically with clients.

Those worried about the impact automation might have on the future of jobs may benefit from remembering that the job market is always, consistently changing. After all, 60% of the jobs we know today didn’t exist a generation ago.

Automation isn’t a threat coming to wipe out the staff of everyday companies. It’s an opportunity to create more immersive, engaging, and create jobs for the professionals of tomorrow. Automation will help companies to grow faster, reach new customers, and even design new job roles for skilled individuals. The disruption in the job market caused by automation may be inevitable, but it doesn’t necessarily need to be a bad thing.