Jobs are not replaced, activities are, says Dr Michael Naylor.
By Dr Michael Naylor
TVNZ’s What’s Next? programme debuted on Sunday night with a look at how technology may soon take over a good percentage of New Zealanders’ jobs. Unfortunately, the show did not address basic concepts from the field of change and far too lightly skipped over important issues. After watching the show, viewers would be excused for feeling a rising sense of panic. Such panic may well be unnecessary, so I have listed some vital issues for people to understand.
Jobs are not replaced, activities are. There is no doubt that some activities will be replaced – so the impact on any job will depend on the mix of activities in that job. There will be some activities within most jobs that will be untouched, and demand for the remaining activities may even expand.
For example, a truck driver does not just drive. They also load and unload and offer customer service. So, current truck drivers may become delivery assistants. For long-distance drivers, where driving is a high proportion of the job, the impact may be large; for around-the-city drivers, probably not so much.
It’s software, not robots. Physical robots are still quite backwards and they cannot do that may jobs. Software advances will be far more transformative. Software has two strands: sequential software and algorithms. Most software so far has been sequential or yes/no task based. This type is unable to handle complex tasks like driving.
Algorithm software (or artificial intelligence) is quite different. It uses iterative equations to input data and analyses it by ‘learning’ what factors are important. This enables algorithms to handle very complex tasks. Widespread use of algorithm software is fairly new and is only now working its way through society. It can easily handle huge complex databases and find answers that exceed the ability of humans. This is what will transform society in much the same way the first industrial revolution did.
Dr Michael Naylor says accountants and lawyers will still have jobs, they'll just be different.
A change to the rate of change
When you take a big-picture view of employment it looks very different to the impact on individuals. When weaving was mechanised, weaving as a home-based manual occupation did disappear. However, the price of clothing dropped by 98 per cent, and demand for clothes boomed. The population went from buying a few changes of clothing over a lifetime to owning many outfits. Employment in the clothing sector, as a whole, rose 20-fold.
It’s estimated that 70 per cent of all current jobs will be affected by technology and over 50 per cent of jobs in 2050 may be ones we have not yet heard about. Before the first industrial revolution, could peasants have imagined jobs as factory workers, clothing designers or baristas? While society as a whole may gain, not every worker will – so we need large social and retraining programmes to support displaced workers.
The education system is changing as students move towards learning thinking skills and learning how to re-learn. Knowing facts is irrelevant when computers provide instant recall. Knowing how to cope with, and analyse, an overwhelming mass of information is vital. Students need education that equips them to create activities that have yet to be invented. This education needs to extend into adulthood, as most people will have three or four occupations over their life, with periods of re-training in between.
We are entering a period where the pace of change is increasing, but that change will still be incremental. For example, driverless cars are now being introduced but we will not move immediately to all cars being driverless. It’s not just a one-off change, but a change to the rate of change. Even so, society will need to get used to continual transformation.
Don't panic, plan for change
Many professions are already changing. For example, most of the activities accountants did in the 1970s, like book-keeping, are no longer done. Accountants now use the outputs of software to discuss how firms can improve their businesses, which is more interesting and more profitable. Accountants will thrive in the future, as they will have a larger, deeper, richer, stream of financial information to do a far better job.
Initially lawyers were worried too, as case analysis software started doing the work once done by hordes of young lawyers. Legal firms found however, that the cost of ‘discovery’ dropped so much that demand for discovery boomed and more lawyers were required. In much the same way, personal computers destroyed typing pools, but clerical work has boomed.
Societies that proactively embraced the changes of the first industrial revolution, like the United Kingdom, grew richer, healthier and happier. Societies that resisted change fell behind. It is great that TVNZ is starting this debate – but New Zealand needs to focus a lot more attention on how to maximise what is to be gained from this massive transformation of society, rather than panic about what will be lost.
Dr Michael Naylor is a finance and insurance academic at Massey University. He is an expert in the area of the impact of technology on the service sector and is the author of a forthcoming book on the looming technological transformation of the worldwide insurance industry.