BoE exec warns of AI job threat

The chief economist of the Bank of England (BoE) has warned that the rise of artificial intelligence could leave large groups of people "technologically unemployed" unless there was a skills revolution.

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BoE exec warns of AI job threat

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Andy Haldane told the BBC's Today programme that the impact on labour markets from the so-called fourth industrial revolution could be on much larger scale than anything seen during the first industrial revolution between 1760 and 1840.

The changes in manufacturing in the Victorian era led to a "hollowing out of the jobs market" he said, leaving to heightened social tensions and rising inequality. "This is the dark side of technological revolutions and that dark side has always been there," said Haldane.

"That hollowing out is going to be potentially on a much greater scale in the future, when we have machines both thinking and doing - replacing both the cognitive and the technical skills of humans."

Haldane said that it is important to "learn the lessons of history" and ensure that new jobs are created to mitigate the loss of traditional labour roles.

"We will need even greater numbers of new jobs to be created in the future, if we are not to suffer this longer-term feature called technological unemployment.

"It has not been a feature of the past, but could it possibly be a feature for the future? I think that is a much more open question than any previous point, possibly, in history."

Manual jobs would be more at risk while there would be greater opportunities in human interaction roles, suggested Haldane.

The banking sector has been singled out as one industry especially vulnerable to the growth of AI and the rise of robots. In June a leading executive at US bank Citi warned that as many as 10,000 jobs at the bank could be replaced via robotics and automation.

And in July a report from consultant McKinsey suggested that machines could take over 30% of bank jobs in just a few years' time.

It is also not the first time the Bank of England has spoken about the job threats from new technology. Back in March 2017 a staff blog at the central bank highlighted a growing concern among the global tech community that developed economies are poorly prepared for the fourth industrial revolution and the advancement of AI. 

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Comments: (2)

Ed Daniel

Ed Daniel Senior Consultant, getting old you know ;-) at esdaniel.com

About time BoE is getting this conversation out in the open. It's been a long time coming though, we had "Lights in the Tunnel" then a couple of economists took note and published their thinking on this including Roubini's tweet in 2014 https://twitter.com/nouriel/status/543413556675219456 , let alone Jeremy Rifkin's 'Zero Marginal Cost Society' (which talked about the 3rd revolution, before Germany decided they wanted to call it the 4th, lol) and I'd direct everyone to the prez given by David Autor at the ECB meeting last year: https://www.nytimes.com/2017/06/28/business/economy/ecb-automation-robotics-economy-jobs.html?emc=edit_th_20170629&nl=todaysheadlines&nlid=5161799

FWIW, you could consider AI/ML are just another facet of automation in general that is changing the landscape of tomorrow's workforce and opportunities.

A Finextra member 

Technological unemployment is real and is taking place today arising from multiple factors, and artificial intelligence (AI) has not yet really begun. We repeatedly see people who have made career choices within technology, who have ignored the winds of change, finding that their options are severely limited.

We are approaching what could be a perfect storm of technology-led change that will see infrastructure people crushed by cloud adoption; operations people replaced by distributed ledger technology; vendor product and waterfall technologists replaced by continuous delivery teams (that could be up to 50% smaller); low-code software replacing low level development roles, and then we have AI, which could replace large groups of people performing analytical roles.

All of these technologies are in many ways related and converging rapidly to create an inflection point.

I’m not as pessimistic as the BoE; human ingenuity has overcome great change before, other jobs that add value will be created, but those being displaced may not necessarily like the alternatives.

 

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