Robots and AI creating more jobs in Asia

According to a report from the Asia Development Bank (ADB), more than 134 million jobs were created through the adoption of robotics and other connected systems, which stimulated higher productivity and economic growth.

06/20/2018


RCourtesy: Bob Vavra, CFE Mediaobots and automation are creating more jobs in Asia than they destroy, according to a report from the Asia Development Bank (ADB).

ADB analysis of a dozen Asian economies between 2005 and 2015 found rising demand more than compensated for jobs lost to automation. The adoption of robotics and other connected systems stimulated higher productivity and economic growth, creating 134 million new jobs, compared with the 101 million lost to new technologies.

"Rising demand offsets job displacement driven by automation," said the ADB report. "New technologies allow a given output to be produced by fewer workers. While some workers are displaced, improved productivity and lower prices often spur higher demand. Increased demand may even expand the number of jobs in factories that automate part of their production process.

"Moreover, the productivity benefits of new technology in one industry lower production costs in downstream industries through input/output channels, contributing to increased demand and employment across industries. An increase in demand and production in one industry heightens demand for upstream industries as well."

A banker's dozen

The bank's data shows rising demand more than compensating for jobs displaced by technology. Using productivity as a broad measure of technological advance, ADB's input/output analysis of 12 economies in Asia found technology-driven increased productivity would have brought a 66% decrease in employment, equal to 101 million jobs per annum had output remained the same.

However, concurrently higher demand for goods and services related to increased output and technology changes more than offset this with an associated 88% increase in employment, which is equal to 134 million jobs per annum.

Robotics, AI, and the Internet of Things (IoT) also create new companies, industries, and jobs, added the bank. In addition, the greater complexity of modern production and growing demand for new personal services in healthcare, education, finance, and others areas, are countervailing forces against technology-related unemployment, as they create new jobs.

"New types of jobs have emerged to handle new technologies," the report explained. "A detailed analysis of occupation titles in India, Malaysia, and the Philippines found that 43 to 57% of new job titles that have emerged in the past 10 years are in information and communication technology (ICT). A large share of new job titles emerged in one of India's fastest growing occupation categories: craft and related workers. This was driven mainly by the different types of specialized technicians needed to work with computer-controlled machines. Such trends will continue."

The non-routine hotspot

The report indicated demand will grow the most for non-routine cognitive, social, and ICT tasks."Jobs requiring routine and manual tasks will be less in demand. This is suggested by analysis of five economies in developing Asia showing that, over the past decade, annual expansion of employment in jobs intensive in non-routine cognitive tasks, social interactions, and the use of ICT, was 2.6 percentage points faster than total employment. Average real wages for these non-routine jobs increased faster than for routine and manual jobs."

However, the bank acknowledged that technological advances threaten jobs as well as fuel productivity and demand. "Emerging technologies such as robotics, 3D printing, artificial intelligence, and the Internet of Things, will help drive future prosperity, yet they also pose challenges for workers," said the ADB report.

"The apparel and footwear industries, for example, are experimenting with completely automated production," the report added. "Similarly, it is becoming technically feasible to automate more complex service tasks, such as customer support. These developments have raised concern that automation could cause widespread job loss, slow wage growth, and worsen income inequality in developed and developing economies alike. Some studies indicate that over half of the jobs in some economies in developing Asia are at risk."

Reasons to be cheerful

That said, the bank said there are reasons for optimism, despite the threat to many lower-skilled or routine jobs. Technologies often automate only some tasks, but not the whole job. "Automation targets mainly routine tasks, such as soldering components onto a circuit board repeatedly on an assembly line, which is both routine and manual, or counting and dispensing cash in a bank, which is routine and cognitive.

"While task automation may displace some types of jobs, in other cases it restructures the job such that machines handle only the routine tasks, freeing up workers to focus on more complex tasks. The introduction of ATMs, for example, changes the job for bank tellers to one of customer relationship management."

Job automation goes ahead where it is both technically and economically feasible. Data on industrial robots in Asia shows the two largest users are the electrical/electronics industry and automobile manufacturers, each accounting in 2015 for 39% of total robot use; together, they account for only 13.4% of total manufacturing employment.

By contrast, producers of textiles, apparel, leather goods, and food and beverages together accounted in the same year for only 1.4% of robot usage, but 31.4% of manufacturing employment.

"This pattern reflects both technological and economic feasibility," the report said. "More technological sophistication is required to give a robot the dexterity to stitch cloth, for example, than to handle large metal parts."

At the same time, low pay in apparel and footwear is a disincentive to automation: it is often cheaper to employ human beings, suggests the bank.

"In 12 economies in developing Asia that account for 90% of employment in the region, an estimated 40% of manufacturing and service jobs entail mostly routine tasks, either manual or cognitive. However, many of these jobs are unlikely to be lost. Some will be restructured instead, and automating others will not be technically or economically feasible."

Nevertheless, automation will hurt workers in routine and manual jobs, the report admitted. "New jobs will appear, but they may require skills that such workers do not possess. Further, as firms and industries adjust to new ways of producing and distributing goods and services, the resulting disruptions along existing supply chains may cause unemployment. In addition to more job losses, routine and manual workers will likely experience lower wage growth, worsening income inequality."

Thinking on their feet

Even some routine cognitive jobs may be displaced. The business process outsourcing (BPO) industry is a case in point, said the ADB.

"Industry experts estimate that, in 2016, 47% of BPO workers in the Philippines worked at process-driven tasks requiring little abstract thinking. With the advent of new technologies, such jobs are likely to decline as a share of all BPO jobs. There will be new opportunities driven by greater demand for more complex BPO services, which can expand along with technologies. But they will require more specialized training. Workers employed as medical transcriptionists, for example, may lose their jobs to increasingly sophisticated software able to recognize voice, text, and image signals."

In general, workers with weaker foundational skills could find themselves left behind, concludes the bank. Foundational skills-those that are best learned at school, encompassing basic reading, writing, and numeracy as well as digital literacy and teamwork abilities. These will help support the transition into jobs that require higher intensity of non-routine and cognitive tasks."Without adequate skills development or retraining, workers with weaker foundational skills face hurdles in seizing the opportunities that new technologies provide," the report said.

Chris Middleton is the editor of Internet of Business (IoB), a CFE Media content partner. This article originally appeared here. Edited by Chris Vavra, production editor, Control Engineering, CFE Media, cvavra@cfemedia.com.

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