TECHNOLOGY AT WORK

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