Phil Ruthven reflects on the changing employment landscape and the impact of digitisation on the workforce.
Just how much should we worry – or even panic – about where artificial intelligence (AI), cognitive learning systems, big data, very high-speed broadband, analytics, robots and general automation are taking us? Even those words can be scary, with or without us being completely au fait with their meaning.
Will we automate so many jobs that we end up with a divided and divisive labour force and a society with frightening unemployment? Will robots be smarter than us and be able to reproduce themselves as Bill Gates? Will science fiction becoming reality?
In the debate about running out of workers (ageing population) or running out of jobs (automation and robots), it is useful to begin with the proportion of the population that want a job. This is termed the labour force (see chart below), the workforce being those that have jobs, and the difference being the unemployed.
Barely 40 per cent of the population put their hand up for work in 1900. Today that figure exceeds 52 per cent, with more than 49 per cent of that 52 per cent getting jobs. The average working week – annualised – for the nation’s 12 million workers is around 30 hours after allowing for annual leave, public holidays, sick leave and long-service leave. All up, this amounts to two months off each year.
In the early 19th century, a full-time job was a week of 65 hours without the benefits listed above. We now work less than half those hours each year, but for a duration of 50 years instead of 25 years because we live over twice as long as our forebears did. So, today’s so-called “full-time” jobs are part-time by historical standards.
One of the big changes in the new age of service industries and information and communications technology (ICT) of the past half-century, has been the rise in part-time and casual employment, which we now define in terms of being less than 15 hours per week. In 2017, part-time and casual employment accounts for 34 per cent of the labour force, one of the highest in the world.
To suggest a position requiring hours of 15 or less is not a proper job is to insult students paying their way through university, mothers with babies and young children, the elderly wanting the dignity of work but with fewer hours, the injured returning to work, and the disabled and mentally-limited. The progressive reduction in hours of work points to one of the reasons we have never run out of jobs despite labour-saving or labour-displacement technology: we share the available work around.
By the end of this century we could expect the average working week to be closer to 24-25 hours – again on an annualised basis.
To say new technologies means losing jobs overlooks the ones we create to replace them. Over the past five years, we have created almost seven times more jobs than we have lost. Yes, seven times more.
Over the past 50 years, we have created 4.25 million jobs just by outsourcing household activities and chores. These account for more than a third of today’s 12 million jobs. And we have created more through new exports and through business functions outsourcing. New pervasive technology such as ICT employs 350,000 people, and this utility is now into the second stage of its evolution with a digital era of fast broadband, big data, analytics and cognitive-learning programming (a newer term for artificial intelligence).
Technology has both created and removed jobs throughout history. In the early 1820s, agriculture employed half the nation’s workforce; now it accounts for just 2.5 per cent.
Tractors, tilling and harvesting equipment, fertiliser and genetic modification forced that reduction. Manufacturing once employed 29 per cent of the workforce, now, six decades later, it accounts for just 8 per cent. Machines, just-in-time manufacturing, outsourced non-core functions, consumer saturation and imports all contributed to the decline. Where are we heading?
Currently, the largest employing industry is health and community services at 1.6 million, followed by retailing at 1.2 million. Health numbers are likely to go up for many decades to come, but retail – or at least its share of total employment – is expected to decline with the online shopping revolution underway.
All this begs the question: what systems and technology changes are threatening jobs in 2017 and beyond? The primary and secondary sectors – with barely 20 per cent of all jobs these days, are largely automated, and may shrink to 15–16 per cent of the labour force by the middle of this 21st century.
It is the services sectors and its industries, which make up four-fifths of jobs that are more under threat from robots and digital-disruption. The tertiary services sector of wholesaling, retailing and transport is likely to shrink a bit through automation and online shopping; perhaps down to 14–15 per cent of all jobs from its current 18 per cent.
The quinary sector of hospitality, health, arts, sport and recreation, and other personal services will grow, more aided by technology rather than threatened by it. Already accounting for 26 per cent of all jobs, its growth could actually soak up the lost share from the previously mentioned sectors.
It may well be the only other sector, the quaternary sector, that is most threatened by robots and the digital era. Finance, legal services, accounting services, consulting, tertiary education, many government services, and administrative and support services are all in the firing line. These and others in the quaternary sector, account for more than a third of all jobs in 2017. Artificial intelligence programs are already cutting into many professional services such as legal, tax advice, auditing and a wide range of consulting services.
And what about robots? As long as we don’t envisage them only as humanoids such as C-3PO and R2D2 from Star Wars, they are already everywhere for individuals and households in the form of heart pacemakers, cochlear hearing devices, soon to come sight-bionics, DSC skid controlling, and crash avoidance technology. Thousands more like this are on the way, for both households and workers.
But are robots smarter than humans? Of course, it is already true. We see computers winning chess championships and quiz programs. As Abraham Lincoln once reputably said: “God must so love the common man, he created so many of them.” So, leaders and good governments must accept the challenge to educate and protect individuals and encourage their self-esteem.
We do not need scaremongering, sincere but amateur fantasists, nor sitting-on-one’s-hands. The future is far more prospective than to do anything other than embrace it, but with some safeguards. Above all, remembering that job-sharing by ever-falling hours of annual work is just as important as planning for totally new jobs, in maintaining a fully-employed society.
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