Could Robots Create More Jobs Than They Take?

Written by Peter Nowak

If conventional wisdom had held true, the widespread deployment of automated teller machines from the 1980s and onward should have resulted in fewer jobs at banks. After all, with machines able to automatically dispense money and accept bill payments from customers around the clock, there wasn't as much need for human workers going forward.

But that's not what happened – the number of human tellers actually grew significantly over time. That's because, as Boston University School of Law lecturer James Bessen explained in a 2016 paper on the subject, the introduction of automation had knock-on effects that led to banks expanding their businesses.

"The ATM allowed banks to operate branch offices at lower cost," he wrote. "This prompted them to open many more branches (their demand was elastic), offsetting the erstwhile loss in teller jobs."

This market growth and subsequent addition of jobs is the natural result of automation, Bessen explained. Technology tends to lower the cost of products and services, which in turn stimulates demand for them. It opens new markets and businesses, which also creates demand and jobs.

The same is likely to happen over the next few decades as employers deploy advanced algorithms, artificial intelligence and robots, according to PwC's UK Economic Outlook report in July.

"Artificial Intelligence and related technologies are projected to create as many jobs as they displace in the UK over the next 20 years," the professional services firm's report says. "In absolute terms, around 7 million existing jobs could be displaced, but around 7.2 million could be created, giving the UK a small net jobs boost of around 0.2 million."

Some Sectors More Vulnerable Than Others

The growth won't be evenly distributed, however, with some sectors more vulnerable to technological displacement than others.

Jobs in health, professional, scientific and technical services, and education are likeliest to see the biggest increases over time, while manufacturing, transport and storage, and public administration could experience the biggest decreases, according to PwC.

Adding automation in growth sectors is likely to enhance services and experiences.

"Healthcare is likely to see rising employment as it will be increasingly in demand as society becomes richer and the UK population ages," PwC Chief Economist John Hawksworth said when the report was released.

"While some jobs may be displaced, many more are likely to be created as real incomes rise and patients still want the 'human touch' from doctors, nurses and other health and social care workers."

PwC's report runs counter to some previous studies on the subject. For example, a landmark 2013 study from Oxford University found that nearly half of all jobs in the United States were at risk of being automated over the next 20 years, which sparked concern among government officials and technology luminaries. Microsoft co-founder Bill Gates, for one, has suggested introducing a tax on robots to slow down their effects on the labour market.

A report issued earlier this year by Royal Bank of Canada, titled Humans Wanted: How Canadian Youth Can Thrive in the Age of Disruption, however, aligns more closely with PwC's findings – provided that Canada can reorient its education programs.

Government and schools need to focus on teaching and promoting "human skills" – creativity, human judgment and people management – to properly prepare students for the changing workplace, according to the report.

"There will be more jobs in the future, not less," RBC Senior Vice-President John Stackhouse noted. "But, the skills required are going to change significantly."

*The title of this article was changed on November 6, 2018.