Automation
A positive view of automation
Does automation mean a wave of unemployment on a global scale? A McKinsey study1, at least, concludes that it does not. It is not an easy question to answer, but the historical evidence suggests that societies are able to adapt to enormous technological and demographic change. The last radical shift: the urbanization of the world's population, especially in developed countries. In the United States, for example, 40% of the population worked in agriculture in 1900. Today it is less than 2%, which shows that the economy was able to absorb that new workforce by creating new jobs and services in the cities.
Something similar could happen with automation: it could reduce labor demand in some areas, but new jobs would be created in other activities where machines cannot replace people in the short or medium term: problem solving, reasoning from experience, developing people, social and emotional skills. Unlike earlier studies, the McKinsey study was granular: it looked separately at the different activities that make up each human occupation, and analyzed which activities within each occupation could be automated with today's technology. The conclusion: we must prepare to live alongside more and more automated processes, since 50% of activities would be automated by 2055. But at the occupation level the outlook is optimistic: only 5% would be fully automatable, since the vast majority of occupations include critical activities that require human intervention.
Where the most automation is expected
Some fields are especially susceptible to automation in the short and medium term:
- Repetitive physical activities in structured environments: advances in robotics will make it possible to automate more and more manual activities. This will hit manufacturing and retail especially hard.
- Data collection and processing: machine learning and artificial intelligence will make data analysis far easier. And not only will collection be automatic; processing and analysis will require less and less human intervention. This trend will affect every sector of the economy and a wide range of occupations.
- Other sensory activities: machines will take an ever greater part in activities that require sensory perception, such as driving, reacting to their surroundings and interacting with humans.
The whole economy stands to benefit from the advantages of automation, which are mainly two: more productive processes (more output, fewer resources used) and better quality in the end product (fewer errors, less variability, superhuman precision). Automation would not only be advantageous but entirely necessary: many developed countries simply do not have a birth rate high enough to maintain their output and sustain their standard of living. Their only alternative is to invest in automation.
The situation in developing countries is somewhat different, since many still have high birth rates and gaps in education. The best way to face the change would be public policies aimed at training the new generations in the new fields that emerge as a result of automation.
And Chile?
Fundación Chile carried out an analysis2 of what the impact of automation in Chile would be. The study split occupations into routine and non-routine, on the assumption that routine occupations would be more likely to be automated in the long run. The conclusion: the jobs most prone to automation are in agriculture, retail and manufacturing.
In Chile, as in other developing countries, our level of automation is low, and technology adoption could be slower than in already industrialized countries. The factors affecting the rate of automation are varied: wage levels, regulatory pressure, available human capital, etc. Among OECD countries, Chile has the lowest productivity after Mexico3: automation therefore looks key to staying on the path of growth, raising social welfare and closing the gap with developed countries.
No one is immune to the effects of automation. We therefore need to get ahead of the changes and prepare for what is coming. Artificial intelligence and new machine learning algorithms will affect every field of the economy and every level within organizations, not just the least skilled jobs. It is better to welcome the positive changes automation will bring, such as higher productivity and new entrepreneurial opportunities.
1 A Future That Works: Automation, Employment, And Productivity. January 2017,
McKinsey Global Institute (MGI)
2 Automatización y Empleo en Chile, Reporte Final, October 2017. Fundación
Chile
3 Data retrieved on December 16, 2019 from OECD.Stat