Titled “Robots at the gate: Humans and technology at work”, Barclays Bank PLC released the third report of its Impact Series that explores the ways that technology is altering the nature of work, and the implications of this in the coming decades. The Barclays’ Research team with support from the Barclays Social Innovation Facility authored the report.
“Technological acceleration has sparked both apprehension and intrigue in terms of its impact on the future of work. Much of the impact of technology in an economy depends not just on what is technically feasible, but also on how human attitudes evolve,” said Ajay Rajadhyaksha, Head of Macro Research at Barclays.
The report attempts to allay fears that technologies such as robotics and Artificial Intelligence will result in a jobless future. It puts the technological disruption now underway into a historical perspective. There have been other periods when technology threatened workers that did not result in the permanent displacement of workers, as was feared at the time.
In current times, the report suggests that these new technologies have “important macroeconomic consequences, such as wage disinflation”, which will likely continue for the foreseeable period to come. It covers both the opportunities and challenges of technological change in terms of available jobs, wages and productivity.
The report offered the following conclusions:
- Soft automation which only impacts parts of a job has the greatest impact on workers initially-- that may extend for years or decades. The impact of soft automation surpasses hard automation which is the full substitution of labor with technology.
- The benefit of automation typically lowers costs for goods and services which in turn results in greater product and services demand, yielding net job growth. Also, totally new industries may arise furthering job creation.
- One adverse impact of technological change is the dampening of wages which has occurred since the turn of the millennium in every major economy. Break-through technologies often automate specific tasks within a job that lowers the required skill-set to do the job. This in turn opens the pool of candidates for the job and that then acts as a drag on wage growth.
In the long term economies eventually re-calibrate and productivity growth emerges. But in the short term, over years or decades, productivity has spurts, consumer behavior adapts and businesses find new models---all of which is not smooth, easy or transparent to those involved.