If automation seemed like a threat to jobs before, in the post-pandemic world, the pace of change will only accelerate. With the rise of remote work, our decision-making, processes and workflows are becoming more digital. That could be a double-edged sword for many employees. True, working from home saves you the time and hassle of a commute into the office. But it is arguably also much easier to replace a human making a decision or completing a task with clever software, when most of the organization’s interactions are now via messaging, video calls and emails. But don’t panic, just yet. What if there was a new job inside your old one?
James Bessen, an economist and lecturer at the Boston University School of Law, studies the relationship between automation and employment. In Bessen’s view, the key question is how technology boosts productivity—that is, how the economy produces goods and services in the most efficient way possible. Given that both capital and human labor are finite resources, doing more with less should translate into lower prices. And, as prices fall and more people can afford to buy more things, the market will expand such that companies will need to hire more people to meet the new demand. In other words, the partial automation of a job can actually lead to more of those jobs being created, especially if there is unmet demand for that product or service.
History seems to support Bessen’s theory. During the Industrial Revolution, for example, when automation was introduced to the cotton industry, weavers on power looms were suddenly able to produce 2.5 times the amount of coarse cloth per hour a weaver on a hand loom could. Later, improved technology would generate another twentyfold increase in output per hour. As the amount of human labor per yard of cloth fell, cloth became cheaper and people bought more, which increased demand. This resulted in the number of weavers in the United States quadrupling between 1830 and 1900 rather than falling.
Bessen discovered that a similar thing happened when ATMs were introduced into the banking industry. Everyone assumed that the automated teller machines would, almost by definition, eliminate human bank tellers and certainly, some tellers did lose their jobs. In the early 1990s, when ATMs started being introduced at scale, the average bank branch in an urban area required about twenty-one tellers. With the introduction of ATMs, this was cut to about thirteen tellers. However, now that it was cheaper to open branches, banks started opening up many more in convenient areas to serve customers, and as a platform for branding and marketing.
Once again, the demand for bank tellers increased, but their job had changed. It was no longer about counting money all day and doing routine, transactional tasks that could be either automated or replaced by customer self-service. It was now about building relationships with customers, cross-selling additional products, and performing other tasks that involved soft skills like human engagement, empathy, and judgment.
I was curious about how Bessen came to be so interested not only in the impact of automation on employment, but also in his other area of focus, patent innovation. Bessen explained that prior to becoming an academic, he had developed the first WYSIWYG desktop publishing program at a community newspaper in Philadelphia in 1983. That experience gave him a unique perspective on the impact of technology on the typesetting profession.
“Originally it was typesetters that controlled the publishing industry,” he said, when I asked him about his own journey. “Theirs was a highly skilled craft. In the US, I think it was a four-year apprenticeship. It was something that required lots of skill, but it was also limited to just preparing the type. Then, we had desktop publishing and graphic design software like Photoshop. Suddenly a whole new set of skills were required. Some people made a nice transition. The people who had worked on the typesetting machines were able to become graphic designers. But there were also other cases where typesetters had difficulty making the transition. Particularly in the newspaper industry, there were some very dramatic changes, such as in Britain with Rupert Murdoch, where bitter strikes surrounded the implementation of the automated technology.”
In Bessen’s view, a stable and sustainable increase in jobs follow- ing automation depends on demand, on whether people’s skills are complementary to the technology, and on the labor market institutions and how they develop. The impact of automation is rarely as simple as machines replacing humans. Generally it is humans with the ability to leverage technology replacing other humans, argues Bessen.
Some workers use AI in order to render their colleagues redundant. This actually speaks to the value of education and training, as the upgrading of employee skills in the algorithmic age is more of a strategic and economic necessity, rather than an employee benefit.
“My kids are graphic designers,” continued Bessen as we were wrapping up our discussion. “This will be tough, even for them. There’s still huge turmoil and change going on, and it’s very hard for many designers to keep up with the technology. Many designers get trained in print design, and now there’s Web design, mobile design, and other new formats. It seems to me the same sort of dynamic will play out as we have seen before. It’s going to make certain sorts of skills more valuable and degrade other sorts of skills. As long as there’s enough of the former, we should be okay.”
Whatever we think our job is today, probably won’t be - in a few years time. The benchmark of what is valuable work has always shifted over time. The difference in a post-pandemic world, is that this evolution will speed up exponentially. As AI and machine learning improves, we will also need to upgrade our skills and capabilities. Is is your job safe? Quite possibly - but only if you are bold enough to destroy it yourself, and look for more useful things to do.
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This article is excerpted from chapter 7 (Automate And Elevate) of ‘The Algorithmic Leader: How to be smart when machines are smarter than you’ - available now on Amazon and Audible.
