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A discussion on the relationship between artificial intelligence and unemployment

Do we understand the impact of artificial intelligence on employment?

Artificial intelligence and employment Masayuki Morikawa 07 June 2016 The substitution of human labour by artificial intelligence and robots is a keenly debated topic. Some claim that a substantial share of jobs is at risk, while others argue that computers and robots will lead to product innovations and hence to unimaginable new occupations. This column uses a survey of Japanese firms to examine the impact of AI-related technologies on business and employment.

Overall, firms expect a positive impact on business but a negative impact on employment. Firms with a highly skilled workforce, however, have a more optimistic view than firms with lower skilled employees.

However, the productivity effects of traditional types of IT were exhausted by mid-2000 e. In particular, the substitution of human labour by AI and robots is being hotly discussed. The Japanese government has begun efforts to develop and diffuse AI and robotics technologies.

The Robot Revolution Initiative Council was established in 2014 and has published a report, New Robot Strategy, which includes a five-year action plan to realise the robot revolution.

The impact of AI and robotics on employment

The Japan Revitalization Strategy 2016, which is the core growth strategy of Abenomics, places the Fourth Industrial Revolution at the top of the growth policy agenda. Earlier studies have presented evidence based on the skill-biased nature of IT that indicate skilled labour and IT are complementary, but that unskilled labour and IT are substitutes.

More recent studies have shown that IT substitutes for routine tasks conducted by middle-skilled workers, which results in the polarisation of the labour market.

Artificial Intelligence: the impact on employment and the workforce

Although the discussion about the impact of AI and robotics on employment is a natural extension of the studies on the relationship between IT and labour, quantitative evidence on this issue has been scarce.

The estimation by Frey and Osborne 2013 of the number of jobs at risk to be replaced by future computerisation, including advances in machine learning and mobile robotics, has attracted attention of the media and policy practitioners.

On the other hand, Mokyr et al. However, we cannot deny the possibility that the impact of the Fourth Industrial Revolution is different from the past innovations. Evidence from a firm survey Against this background, we designed and conducted an original survey of Japanese firms to investigate the impact of AI and robotics see Morikawa 2016 for details.

Will AI Revolution Lead to Mass Unemployment?

Specifically, in late 2015, we distributed the Survey of Corporate Management and Economic Policy to a variety of firms operating in both the manufacturing and service industries and obtained more than 3,000 responses. The survey inquiry was wide-ranging, but in this column we focus on the questions about the possible impact of AI and robotics on business and employment.

Special attention is paid to the relationship between the skills of human resources and AI-related technologies. Responses regarding the impact of the development and diffusion of AI and robotics on future business were generally positive — positive responses 27.

Firms expecting positive effects of AI and robotics on their business have significantly higher ratios of university graduates and employees with postgraduate degrees. Conversely, the ratio of highly educated employees is lower among firms that anticipate a negative impact of AI and robotics on their employment.

  • The invention of cars and automatic looms was long ago, but the Economist article also presents similar case studies of more recent technological developments;
  • There are also voices which claim that automation will not have any impact;
  • But this is just one side of the story;
  • The importance of salespersons and networks of physical stores will shrink; we are close to scenarios where consumer A;
  • As a result, the number of legal clerks who before the implementation of the software had to search for the legal documents manually in a more time consuming way increased by 1;
  • Whether AI can give a satisfactory quality of service or not must be the deepest concern for service companies.

This technology-skill complementarity is confirmed by formal estimations controlling for other covariates including firm size and industry. The diffusion of AI and robots may further raise the return to higher education unless changes in the education system catch up with the technological progress. In order to accelerate the development and diffusion of AI-related technologies and, at the same time, maintain employment opportunities, it is necessary to upgrade human capital, such as increasing the number of people with postgraduate education.

University of Chicago Press, 1—51. How Susceptible Are Jobs to Computerisation? Is This Time Different?