Economic arguments that the use of new technologies and artificial intelligence will lead to a reallocation of human labour to more productive tasks could be seriously wide of the mark, argues a staff paper on the Bank of England's unofficial Undergound blog, which holds out the possibility that millions of jobs may be at risk in the forthcoming 'Fourth Industrial Revolution'.
The paper reflects on a growing debate in the economics community and academia about whether technological progress threatens to displace a large proportion of lower-skilled jobs in the longer term.
The prevailing view is that technological progress has always been labour-augmenting in the past, and is likely to remain so in future, as jobs dependent on human traits such as creativity, emotional intelligence and social skills may become more numerous.
The BofE blog takes a more dystopian perspective, pointing out that the speed of technological progress and the mass of adoption of robotics threatens to disrupt many industries more-or-less simultaneously, giving neither the economy — nor society in general — the time to adapt to the changes.
Indeed, a recent report by Deloitte concluded that around one-third of jobs in the UK are at “high risk” of being displaced by automation over the next two decades, including losses of over 2 million jobs in retail, 1½ million jobs in transportation and storage, and 1¼ million jobs in health and social care.
The blog points to growing concern in the global tech community that developed economies are poorly prepared for the next industrial revolution.
"That might herald the displacement of millions of predominantly lesser-skilled jobs, the failure of many longstanding businesses which are slow to adapt, a large increase in income inequality in society, and growing industrial concentration associated with the rapid growth of a relatively small number of multi-national technology corporations," the authors write. "Economists looking at previous industrial revolutions observe that none of these risks have transpired. However, this possibly under-estimates the very different nature of the technological advances currently in progress, in terms of their much broader industrial and occupational applications and their speed of diffusion. It would be a mistake, therefore, to dismiss the risks associated with these new technologies too lightly."