New professions people can’t imagine now could emerge to fill much of this void. Today, there are more than 1 million software programmers developing applications for iPhones. Their jobs didn’t exist a decade ago.
The problem, in Harris’s view, is the rapid change of displacement. If past labor market disruptions are any indicator, “what we’ve seen in the past is we can absorb about 700,000 jobs [a year],” or slightly more than 25% of the 2.5 million she predicts will be displaced.
Reversals in various segments of the labor market remain uncertain. At present, there is a shortage of truck drivers estimated at 50,000 and some think that gap could triple in the next 10 years.
Driverless trucks to the rescue? A study by the Commerce Department last year estimated that autonomous vehicles would ultimately displace about 4 million workers who drive for a living, but many think it could take decades. However, there is a fear that all the talk about different jobs becoming obsolete could result in self-fulfilling prophecies. If many people avoid certain industries, businesses will be compelled to invent robotic alternatives.
Moving up the skills ladder, tests have shown robots allow doctors to perform certain types of surgery better than humans. But the entire procedure still requires a skilled physician to supervise it.
As in any upheaval, there will be winners who develop intelligent machines or profit from them—and losers. Sadly, Harris predicts the latter group will represent about 80% of the workforce, many of whom ultimately will either “see suppressed wages, because to have a job, you’ll have to be cheaper than the alternative,” or find themselves displaced.
All this is occurring at a time of “historically high levels of income inequality,” she continued, and it’s not a U.S.-only phenomenon. Even socialist Sweden is seeing income gaps widen.
The news isn’t all bad. Building out a global automation infrastructure will require a massive capital spending investment. Sensing this impending trend, capital goods manufacturers have seen their stocks soar in recent years.
Around the world, labor force growth is slowing or, in the case of China, actually shrinking by 40 million over the next decade. So artificial intelligence and robotics can compensate for some of this slack.
Japan, faced with actual population decline (not just labor force shrinkage), has been forced to invent robotic nurses to care for its mushrooming cohort of senior citizens. In the process, the Japanese are several steps ahead of the U.S. and China. If one wants to see cutting edge AI at work, they should look at what Japanese companies are doing with manufacturing facilities in India, said Louis Gave, of Gavekal, at the SIC event.