AI is not all bad for jobs

AI is not all bad for jobs say PWC UK - source https://www.theguardian.com/technology/2018/jul/17/artificial-intelligence-will-be-net-uk-jobs-creator-finds-report

(Thanks to Vint for the find) 

A report from PWC UK suggests that artificial intelligence, robotics, drones and driverless technology is set to create more than 7m new UK jobs in healthcare, science and education by 2037, more than making up for the jobs lost in manufacturing and other sectors through automation.

The report estimated about 20% of jobs would be automated over the next 20 years - in factories , retail and services - and no sector would be unaffected, however, employment could increase by nearly 1 million on a net basis, equivalent to more than a fifth of existing jobs in the sector.

Professional, scientific and technical services, including law, accounting, architecture and advertising firms, are forecast to get the second-biggest boost, gaining nearly half a million jobs, while education is set to get almost 200,000 extra jobs.

Healthcare is likely to see rising employment as it will be increasingly in demand as society becomes richer and the population in the UK ages. 

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.

On the other hand, as driverless vehicles roll out across the economy and factories and warehouses become increasingly automated, the manufacturing and transportation and storage sectors could see a reduction in employment levels.

PwC estimated the manufacturing sector could lose a quarter of current jobs through automation by 2037, a total of nearly 700,000.

Transport and storage are estimated to lose 22% of jobs – nearly 400,000 – followed by public administration and defence, with a loss of almost 275,000 jobs, an 18% reduction. 

Clerical tasks in the public sector are likely to be replaced by algorithms while in the defence industry humans will increasingly be replaced by drones and other technologies. 

Impact of artificial intelligence on jobs. Illustration: PwC analysis

London – home to more than a quarter of the UK’s professional, scientific and technical activities – will benefit the most from AI, with a 2.3% boost, or 138,000 extra jobs, the report said. The east Midlands is expected to see the biggest net reduction in jobs: 27,000, a 1.1% drop.

Regional analysis from PWC

Response from Kartik Garda 

At the moment, there are 6.5 million open positions in the US.  This is even after the fact that never in a century have immigrants been such a large share of the population.  But there are still at least 3 million who are underemployed.  As jobs become more fragmented, this mismatch will widen.   

A few elements of terminology that people should start internalizing :

i) Vertical Skill Gap : A truck driver cannot become a software engineer, especially in just 3 months of training. 

ii) Horizontal Skill Gap : A dermatologist cannot become a software engineer after just 3 months of training.

The solutions, of course, are :

i) There has to be a huge focus on lifetime retraining, and funding this should be one of the primary functions of government.  Expect 20-25% of the workforce to be in training for new careers at any given time.  

ii) There has to be a cushion in the form of a UBI, funded through the monetization of technological deflation.  

iii) There has to be a phaseout of income tax, because that is the single biggest job killer.  The aforementioned safety net is funded by the monetization of technological deflation which has to be done anyway.  

iv) There has to be a more favorable regulatory (and tax, as in 0% income tax) climate for entrepreneurship, because the elimination of jobs via technology is exactly proportional to the amount of free money that agile entrepreneurs that no longer have to hire humans to get certain work done, can make.  

Any job eliminated = the employer is pocketing that money, so become an employer positioned to capture all those savings at scale. 

 This is the first thing I tell all of my investment banking clients and all of my students at Stanford, in the hopes of getting the gears turning in their minds.  

Thanks,

-Kartik

From Curt Carlsson 

It is interesting that in America there is now more jobs than advertised than in the work force.  That should tell us something.  

As Jack Ma points out there are still 4B people left to be served so how bad could it be?

I have always looked at:

1.  Is there opportunity for new businesses (never been a better time)

2.  Are there unserved markets (most of the world of 7B people still poor)

3.  Can we create new innovations (entering a whole new generation of amazing technologies)

The issues are elsewhere — government, education, and immigration (we should aggressively be recruiting the super achievers).