Automation:

The Rise of the Machines

Trajectory Trends Breakfast
October 2017
Introduction
Robots
everywhere
Setting the scene
 What’s the problem?

Employment shares and the estimated proportion of jobs at potential

high risk of automation by early 2030s for all UK industry sectors
Will Robots Steal our Jobs? (March
Employment share of total jobs (%) Job automation (% at potential high risk)
17)
60% 56%
50% 44% 46%
40% 37% PWC estimates that 30% of jobs will
32%
30% 26% 26%
be at risk of automation by 2030
24%
20% 15% 17%
12%
9% 9%9% 8% 8% 7% 6%
10% 5% 4% More than half of these (53%) in
0% retail, manufacturing, admin and
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Source: ONS; PIAAC; PwC Analysis

 A brief history of revolutions

Agricultural Industrial (first phase)

Industrial (second phase) Digital

 A brief history of AI
1) 1950s: 3) 1980s:

IBM 702, the Turing AI ‘winter’ – pop

Test & Dartmouth culture but little
conference progress

2) 1960-70s: 4) 1990s/2000s:

Advances Huge steps forward

culminate in
the WABOT 1
Understanding AI
1. Deep learning – machine learning based on algorithms all of which
are connected (and therefore immune to repeating mistakes)

2. Robotisation – combined with advances in robotics, AI will continue

to replace human employees

3. Dematerialisation – as a result of automatic data

processing/recording, autonomous software will replace many
quantifiable ‘back office’ jobs

4. Gig Economy – on demand and crowd working sees employees use

networked platforms to access new opportunities

5. Autonomous driving – sensors allow vehicles to be self governing.

Complete overhaul of transport and traffic management

Source: IBA Global Employment Institute

 The Pace of Change
Rapid progress Barriers remain
Moravec’s Paradox

“…it is comparatively easy to make

computers exhibit adult level performance on
intelligence tests or playing checkers, and
difficult or impossible to give them the skills
of a one-year-old when it comes to perception
and mobility.”
Job disruption
 Some common misconceptions: #1

“Everything that can be automated will be.”

“Already today, it is technically feasible that a robotic machine could mix drinks,
send the clients’ orders directly to the kitchen, receive complaints and accept the
clients’ money.

Nevertheless, the atmosphere in the bar or in the restaurants will no longer be the
same. Because of the lack of acceptance by potential clients and the high
acquisition costs, it is definite that 87 per cent of all barkeepers will not lose their
jobs in the next few years.”

-- IBA Global Employment Institute

Some common misconceptions:
#2

“STEM/IT skills will

be the most valuable
in the future.”
 Some common misconceptions: #3

“Low skilled jobs are most at risk.”

% change in employment shares by occupation group
20%
1981-1991 1991-2001 2001-2011 16%
15%
11%
10% 9% 9%

5%
5%
1%
0%

-5%
-6% -7%
-10%
-11%
-15%
Non-routine Cognitive Routine Non-routine Manual

Source: Jaimovich/SIU, The Trend is the Cycle 2012

 What jobs are safe?
More Cognitive

Managerial, professional occupations,

Salespeople, clerks, data entry keyers, analysts, doctors, economists etc
admin and secretarial

High Routine Low Routine

Machine operators, retail workers,

Janitors, barkeepers, gardeners, care
assemblers, mechanics
workers

More Manual
 Job Polarisation: automation hollowing out the middle

Measures of Recovery following Early and Recent Recessions

(Jaimovich/Siu, 2012)

25 23 23 “Job polarization is not a gradual process;

essentially all of the job loss in middle-skill
occupations occurs in economic downturns.
20 18
Jobless recoveries in the aggregate are accounted for
15 by jobless recoveries in the middle-skill occupations
15
that are disappearing.”
10
10 9
7
6 90%+ of job losses during the last recession were in
5
5 4 routine jobs
3
2
0
1970 1975 1982 1991 2001 2009

Output (half life of recession)

Employment (months to turn around after recession ends)

Source: Jaimovich/SIU, The Trend is the Cycle 2012

International comparisons
MAGAnomics and Choking growth
 Driverless Cars

The technology may arrive within 5 years,

but huge barriers to adoption will remain

Scope of disruption enormous:

• Transport costs plunge

• Huge volumes of data
• New era for insurance
• End of courier/taxi/driver jobs
Implications
 The consumer perspective: ruthless

All agreeing…
say it’s more important to have
access to more affordable legal
AI will help solve complex problems in society 63%
80% advice than preserve the jobs of
lawyers

AI will help people live more fulfilling lives 59%

Would rather have more
affordable, convenient and
AI will harm people by taking away jobs 46%
69% reliable transportation than
preserve the jobs of taxi drivers

AI will have serious, negative implications 23%

0% 10% 20% 30% 40% 50% 60% 70%

Source: PWC Bot.me Report (US Adults)

A populist
backlash?
 Risks and rewards

Take up intensifies as
Business take up of automation
efficiencies increase & Large scale unemployment
increases steadily
profitability rises

Job losses increase,

Mass unemployment causes
Little impact on jobs governments react by shaking
significant fall in tax receipts
up welfare system

Short/medium term Long term Longer term

Source: Trajectory
Further into the future
 Implications
Employees Government

A new era for Data

protest and protectionism
collectivism? and robot
taxes?

Consumers
Business
Just want
Every business
faster, better,
is a data
cheaper?
business?
 Some Final Thoughts
“We have already eliminated all jobs several times in human
history. For every job we eliminate, we’re going to create more
jobs at the top of the skill ladder. … You can’t describe the
new jobs, because they’re in industries and concepts that don’t
exist yet.”

-- Ray Kurzweil

"Statistically speaking, it's much more likely we're living in a

vast simulation than in the original version. To me, the whole
concept of reality is rather absurd.”

-- Hans Moravec
Tom Johnson Trajectory
[email protected] 22 Upper Ground, London, SE1 9PD
Director + 44 (0)20 8004 4869
trajectorypartnership.com
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