TECHNOLOGY AT WORK

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58 Citi GPS: Global Perspectives & Solutions February 2015 Although history tells us that one should be careful when making predictions about technological progress, we have a reasonably good idea about the type of tasks computers will be able to perform in the near future — not least since these technologies are already being developed, as described in Chapter 3, but are yet to be adopted on a larger scale. Occupations at Risk 47% of the US workforce is at risk of automation as a result of recent trends in technology How significant will these developments be in terms of their employment impact? As shown in Figure 45, research by Carl Benedikt Frey and Michael Osborne, estimates that 47% of the US workforce is at risk of automation as a result of these trends. 80 Although this number cannot be directly transferred to other countries, the occupations that are at risk will be the same across countries and regions, including a wide range of jobs in transportation, logistics, and office and administrative support. These findings speak to several trends we are currently witnessing in technology. Computerised cars are already being developed and augmenting vehicles with advanced sensors is becoming more cost-effective, making many jobs in transportation vulnerable. Algorithms for big data are also already taking over jobs that are reliant upon storing or processing information, suggesting that a growing share of office and administrative support jobs will soon be subject to automation. Figure 45. Distribution of BLS 2010 occupational employment over the probability of computerisation 400 300 Transportation and Material Moving Production Installation, Maintenance, and Repair Construction and Extraction Farming, Fishing, and Forestry Office and Administrative Support Sales and Related Service Healthcare Practitioners and Technical Education, Legal, Community Service, Arts, and Media Computer, Engineering, and Science Management, Business, and Financial Low Medium High 33% Employment 19% Employment 47% Employment 200 100 0 0.0 0.2 0.4 0.6 0.8 Source: Frey & Osborne (2013) 80 Frey and Osborne (2013). © 2015 Citigroup
February 2015 Citi GPS: Global Perspectives & Solutions 59 The bulk of service occupations in the US, where most US job growth has occurred in the past decades, are now at risk Low-skill and low-income jobs are for the first time at risk of being automated More surprising perhaps, is the finding that the bulk of service occupations, where the most US job growth has occurred over the past decades, are now at risk. Already the market for personal and household service robots is growing by about 20% annually — a trend that is likely to continue. 81 As machines get better at performing tasks involving mobility and dexterity, the pace of displacement in service occupations is likely to increase even further. Although there is a growing popular perception that computers now mainly substitute for cognitive work, the victory of IBM’s Deep Blue computer over chess grandmaster Garry Kasparov, or Watson’s ability to outperform humans at US game show Jeopardy!, does not mean that most skilled jobs are now at risk. On the contrary, skilled jobs are relatively safe. Instead, as shown in Figure 46 and Figure 47, low-skill and low-income jobs are now for the first time most likely to be automated. This implies a break from the trends we have seen in the past. While 19 th century manufacturing technologies largely substituted for skilled labour through the simplification of tasks, the computer revolution of the 20 th century caused a hollowing-out of middle-income jobs. Our estimates thus predict a shift from the computerisation of middle-income jobs, to computers mainly substituting for low-income, low-skill workers over the next decades. Figure 46. Relationship between occupations at risk and education 60% Figure 47. Relationship between occupations at risk and wages $80 Bachelor's degree or better 50% 40% 30% 20% 10% 0% 0.0 0.2 0.4 0.6 0.8 Probability of Computerisation Source: Frey & Osborne (2013) Source: Frey & Osborne (2013) Average median wage (,000's) $60 $40 $20 $0 0.0 0.2 0.4 0.6 0.8 Probability of Computerisation The common denominator for low-risk jobs is that they are intensive in social and creative skills. In particular, generalist occupations requiring knowledge of human heuristics, and jobs involving the development of novel ideas and artifacts, are not yet readily automatable. The reason is simple: computers do not yet have the human ability to engage in complex interactions, such as negotiating and persuading, and while they can now solve most crisp problems, they are not as good at developing original ideas. As a result, most management, business, and finance occupations, which are intensive in work requiring social skills, but also most jobs in education and healthcare, are not fully automatable. The same is true of occupations that involve developing original ideas, such as many jobs in arts, media, engineering and science. 81 MGI (2013) © 2015 Citigroup
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