What Factors Might Influence the Automation of Jobs?

The potential for large numbers of jobs to be automated by new technology is a topic I've touched on numerous times in the past few years. The latest analysis of this burgeoning field comes from the Stockholm School of Economics, which has published a report exploring the impact of technology on work in Sweden.

The paper, called The Substitution of Labor: From technological feasibility to other factors influencing job automation, is the fifth report from a three-year research project undertaken at the university.

The report shares an outlook with previous works that I believe present a more realistic analysis of the potential of technology. The authors believe that while technology has considerable potential for automating certain tasks, it is likely to be very rare for an entire job to be automated.

What's more, the nature of the work that we do is likely to change, with routine tasks replaced with more complex, creative work that will see man and machine work closely together.

Pace of Automation

The report outlines five factors that are believed to be crucial in the pace and extent of automation.

1. Commercial Availability

Many of the technologies hitting the press are confined to lab conditions, with few commercially available. Indeed, many are at a very early stage of their development, and it remains to be seen how successful they will be at scaling up. The differences between technical feasibility and commercial adoption mean that many will fall by the wayside.

2. Cost of Implementation

Even when technologies have made it to market, the cost of implementation will remain a factor, as the new technology will need to present a suitably robust use case to warrant upgrading from the existing tech.

3. Economic Benefits

This use case analysis will also examine the economic benefits of implementation. The rhetoric makes it sound very easy, as humans will be displaced; therefore, the technology must be more cost-effective. As full substitution is unlikely, it renders the economic equation slightly more complex, especially as higher profits can be re-invested in new areas and thus create new work.

4. Labor Market Dynamics

The adoption of technology is influenced heavily by the labor market dynamics in a region. For instance, in Japan, demographic pressures are resulting in a shrinking workforce that is forcing many employers to turn to technology. Equally, however, despite the risk of automation being high in industries such as food, the low wages of workers have thus far held back substitution of humans for machines.

5. Social, Legal, and Ethical Acceptance

The final factor concerns the social, legal and ethical acceptance of autonomous technology. This is likely to be one of the most important factors, certainly in determining the pace of change. The legal pace of change is typically a lot slower than technological change, and social attitudes can be equally slow to adapt. This can add years to the roll-out of any new technology, even when it's technologically and economically ready.

"All five of these factors have a significant influence on the speed and scope of technology adoption. In particular, a lack of applied research, low wages, high costs, and legal and ethical boundaries hamper the adoption of technology," the authors say.

Many analyses of the future of work and the impact of technology make profound predictions of the future with extremely high degrees of certainty. If history has taught us nothing else, it's that such practices should be taken with a pinch of salt. This paper provides a timely reminder of some of the issues that will impact the adoption of new technologies in the coming years.