Robots vs Humans / Machine Earning

Posted: 2/2/2016


Robots v humans

Machine earning

Jobs in poor countries may be especially vulnerable to automation

Jan 30th 2016 | From the print edition

BILL BURR, an American entertainer, was dismayed when he first came across an automated checkout. “I thought I was a comedian; evidently I also work in a grocery store,” he complained. “I can’t believe I forgot my apron.” Those whose jobs are at risk of being displaced by machines are no less grumpy. A study published in 2013 by Carl Benedikt Frey and Michael Osborne of Oxford University stoked anxieties when it found that 47% of jobs in America were vulnerable to automation. Machines are mastering ever more intricate tasks, such as translating texts or diagnosing illnesses. Robots are also becoming capable of manual labour that hitherto could be carried out only by dexterous humans.

They’re everywhere

Yet America is the high ground when it comes to automation, according to a new report* from the same pair along with other authors. The proportion of threatened jobs is much greater in poorer countries: 69% in India, 77% in China and as high as 85% in Ethiopia. There are two reasons. First, jobs in such places are generally less skilled. Second, there is less capital tied up in old ways of doing things. Driverless taxis might take off more quickly in a new city in China, for instance, than in an old one in Europe.

Attracting investment in labour-intensive manufacturing has been a route to riches for many developing countries, including China. But having a surplus of cheap labour is becoming less of a lure to manufacturers. An investment in industrial robots can be repaid in less than two years. This is a particular worry for the poor and underemployed in Africa and India, where industrialisation has stalled at low levels of income—a phenomenon dubbed “premature deindustrialisation” by Dani Rodrik of Harvard University.

Rich countries have more of the sorts of jobs that are harder for machines to replicate—those that require original ideas (creating advertising), or complex social interactions (arguing a case in court), or a blend of analysis and dexterity (open-heart surgery). But poorer countries are not powerless. Just because a job is deemed at risk from automation, it does not necessarily mean it will be replaced soon, notes Mr Frey.

The cheapness of labour in relation to capital affects the rate of automation. Passing laws that make it less costly to hire and fire workers is likely to slow its advance. Scale also matters: farms in many poor countries are often too small to benefit from machines that have been around for decades. Consumer preferences are a third barrier. Mr Burr is hardly alone in hating automated checkouts, which explains why 3m cashiers are still employed in America.

* “Technology At Work v2.0: The Future is Not What It Used to Be”, by the Oxford Martin School and Citigroup