Academic Literature

Computers could replace about 47 percent of jobs research finds

“…Over the past decades, computers have substituted for a number of jobs, including the functions of bookkeepers, cashiers and telephone operators” write Carl Benedikt Frey and Michael A. Osborne in The future of employment: how susceptible are jobs to computerisation? (quotes to follow)

More recently, the poor performance of labour markets across advanced economies has intensified the debate about technological unemployment among economists. While there is ongoing disagreement about the driving forces behind the persistently high unemployment rates, a number of scholars have pointed at computer-controlled equipment as a possible explanation for recent jobless growth.

The impact of computerisation on labour market outcomes is well-established in the literature, documenting the decline of employment in routine intensive occupations – i.e. occupations mainly consisting of tasks following well-defined procedures that can easily be performed by sophisticated algorithms.

The authors examine how susceptible jobs are to computerisation. To assess this, The authors begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, the authors examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupation’s probability of computerisation, wages and educational attainment. According to their estimates, about 47 percent of total US employment is at risk. The authors further provide evidence that wages and educational attainment exhibit a strong negative relationship with an occupation’s probability of computerisation.

Capture d’écran 2013-09-24 à 08.34.36

Turning to the expected employment impact, reported in Figure III, the authors distinguish between high, medium and low risk occupations, depending on their probability of computerisation (thresholding at probabilities of 0.7 and 0.3).

47 percent of total US employment is in the high risk category,

This means that associated occupations are potentially automatable over some unspecified number of years, perhaps a decade or two. It shall be noted that the probability axis can be seen as a rough timeline, where high probability occupations are likely to be substituted by computer capital relatively soon. Over the next decades, the extent of computerisation will be determined by the pace at which the above described engineering bottlenecks to automation can be overcome. Seen from this perspective, the findings could be interpreted as two waves of computerisation, separated by a “technological plateau”. In the first wave, the authors find that most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations, are likely to be substituted by computer capital. As computerised cars are already being developed and the declining cost of sensors makes augmenting vehicles with advanced sensors increasingly cost-effective, the automation of transportation and logistics occupations is in line with the technological developments documented in the literature. Furthermore, algorithms for big data are already rapidly entering domains reliant upon storing or accessing information, making it equally intuitive that office and administrative support occupations will be subject to computerisation. The computerisation of production occupations simply suggests a continuation of a trend that has been observed over the past decades, with industrial robots taking on the routine tasks of most operatives in manufacturing. As industrial robots are becoming more advanced, with enhanced senses and dexterity, they will be able to perform a wider scope of non-routine manual tasks. From a technological capabilities point of view, the vast remainder of employment in production occupations is thus likely to diminish over the next decades.

More surprising, at first sight, is that a substantial share of employment in services, sales and construction occupations exhibit high probabilities of computerisation. Yet these findings are largely in line with recent documented tech- nological developments. First, the market for personal and household service robots is already growing by about 20 percent annually. As the comparative advantage of human labour in tasks involving mobility and dexterity will diminish over time, the pace of labour substitution in service occupations is likely to increase even further. Second, while it seems counterintuitive that sales occupations, which are likely to require a high degree of social intelligence, will be subject to a wave of computerisation in the near future, high risk sales occupations include, for example, cashiers, counter and rental clerks, and telemarketers. Although these occupations involve interactive tasks, they do not necessarily require a high degree of social intelligence. Their model thus seems to do well in distinguishing between individual occupations within occupational categories. Third, prefabrication will allow a growing share of construction work to be performed under controlled conditions in factories, which partly eliminates task variability. This trend is likely to drive the computerisation of construction work.

Chosen excerpts by Job Market Monitor. Read the whole story at 

Capture d’écran 2013-09-24 à 08.30.47 via The future of employment: how susceptible are jobs to computerisation?

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