On the other hand are the techno-pessimists who have a more troubling vision of a future where any job that’s routine and repetitive and predictable will be coded into a computer and automated away. They argue that millions of jobs will be lost within the next five years.
Davis cited an Oxford University study that concluded that based on technology currently used today, 47 percent of U.S. jobs will be eliminated due to automation. That’s 70 million American workers.
He further noted that similar studies based on methodologies developed by M.I.T. found even more sobering rates elsewhere: 69 percent of jobs lost to automation in India and 77 percent in China.
“Imagine a world where three-quarters of the Chinese economy is without a job,” Davis pondered aloud, and then added, “If this is the world we’re heading for, I don’t know who’s buying ETFs. Maybe the rich machines are. Needless to say, these are alarming prospects.”
The Plus Side
Intrigued by these scenarios, Davis and his team at Vanguard replicated the studies and crunched the numbers to examine the future of work and gauge whether we’re all doomed.
His basic conclusion? Human beings are remarkable at adapting, and the doomsday scenarios likely won’t occur. If anything, he said, automation will accentuate the value of the types of tasks—and thus, jobs—that individuals increasingly do, anyway.
“I think both camps—the techno optimists and pessimists—take too simplistic a view,” Davis explained. “Work—like life—is more complicated than that. My message is ultimately one of encouragement. Work has always been in an arms race between education and technology, and skills and technology, and this time won’t be different.
“But this time two things will be different: the pace of the change and the scope of the risk,” he continued. “We all need to change our mindset about the nature of technological change and how it will impact the global labor market. Most importantly, jobs don’t get automated away—tasks do.”
Davis believes those pessimistic studies predicting mass human employment displacement caused by machines and software suffer from three fundamental flaws. The first is the notion that technology only threatens and substitutes for human labor, but it never complements it. “That’s wrong; just think of your own jobs,” he said.