Industry creating a 'robot reserve army' with influx of automation, economists say
The rise of AI and robots, effectively creating a "robot reserve army," is expected to cause "stagnant wages and deindustrialization" instead of unemployment for developing countries, according to research by Lukas Schlogl, research associate with the ESRC GPID Research Network at the King's College, and Andy Sumner, reader in international development in the Department of International Development at the King's College London.
More jobs become in principle automatable the poorer a country is, according to the report. Developing countries mostly offer routine work and require little "creative work." Even if robots take over such jobs, workers will continue to fill the service sector. This could reduce wages and hinder the ability of people to break out of poverty.
Some argue that robots and computers will aid overall marketplaces by reducing the cost of production and therefore the cost of goods. Robots will also contribute to "reducing wages relative to the rental rate of capital," therefore "encouraging the creation of new labor-intensive tasks" and creating something that is able to correct itself, according to the report.
Technology has been a contributor to modern economic growth since the Industrial Revolution, but it's been met with "technological anxiety," according to the report. Technological anxiety in the modern age is often similar to the fears expressed by Elon Musk.
But Musk isn't alone in his AI apocalypse fears. For many, automation is a step closer to computers developing human brain-like abilities, not just human muscle-like capabilities. Now, however, jobs with repetitive tasks can be made more efficient when automated, and companies crave that simplicity.
Researchers found that while automation will cut 1.8 million jobs, it will also add 2.3 million by 2020. But most research about digitizing the workforce is "focused on advanced industrialized economies" with a higher cost in labor and manufacturing, which indicates "a high degree of mechanization and productivity," according to the report.
But the "robot reserve army" is threatening how manufacturers find countries to do business in. Countries are reliant on foreign manufacturers to supply jobs and boost their economies because workers won't be able to move into factory work.
Either way, the result of automation is structural change. But it's important to keep in mind the differences will be seen in lay-offs in nonadaptable places and either lower wages or a shift in tasks for those who are adaptable.
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