The Future of Employment – Frey & Osborne Flashcards
The Future of Employment – Frey & Osborne
Introduction
- paper motivated by John Maynard Keynes: ‘due to our discovery of means of economising the use of labour outrunning the pace at which we find new uses for labour
- many scholars have pointed at computer-controlled equipment as possible explanation for recent jobless growth especially decline of employment in routine intensive occupations
- structural shift in labour market: workers reallocate their labour supply from middle-income manufacturing to low-income service occupations as these are less susceptible to computerisation
Trend of labour market polarisation: growing employment in high-income cognitive jobs and low-income manual occupations + hollowing-out of middle-income routine jobs - paper aim: determine which problems engineers need to solve for specific occupations to be automated then using the problems & related occupations to categories jobs according to susceptibility to computerisation
- two literature relations: 1) labour economics literature of task content of employment (Autor et al) 2) offshoring of information-based tasks to foreign worksites (Jensen & Kletzer)
The Future of Employment – Frey & Osborne
THE TECHNOLOGICAL REVOLUTIONS OF THE 21ST CENTURY
- what computers are able to perform depends upon ability of programmer historically only routine tasks could have been computerised but computerisation is now spreading to non-routine tasks
The Future of Employment – Frey & Osborne
THE TECHNOLOGICAL REVOLUTIONS OF THE 21ST CENTURY: Routine task noun routine tasks
Routine task: task that can be accomplished by machines
Non-routine task: task that is not sufficiently understood to be specified in computer code
- both types of tasks can either be manual (physical labour) or cognitive (knowledge work)
- technological breakthroughs in terms of non-routine task computerisation are due to turning non-routine tasks into well-defined problems & using data
- big data is required to specify contingencies a technology must have in order to substitute for human labour = objective and quantifiable measure of success of an algorithm can be produced
The Future of Employment – Frey & Osborne
COMPUTERISATION IN NON-ROUTINE COGNITIVE TASKS
- use of big data/algorithms due to two main advantages: a) scalability
computers can manage large calculations required in using large datasets better than humans #
b) absence of human biases
tasks unrelated to occupation that human has to fulfil (sleeping, eating etc)
AREAS WITH NON-ROUTINE TASKS THAT HAVE BEEN COMPUTERISED
* health care: using big data to benchmark cases, form diagnoses & come up with best treatment plan
* legal & financial services: assisting in pre-trial research using big data
* monitoring: improvement in sensing technology has made sensor data important source of big data (substitute for workers examining equipment defects, clinical staff monitoring state of patients etc)
* services: interfaces that respond directly to wider range of human requests (Siri, Google Now, Alexa)
* education: with use of big data of online courses + interfaces there will be interactive tutors
* big databases of code offer eventual prospect of algorithms that learn to write programs to satisfy specifications provided by a human
technological progress in 21st century is expected to contribute to cognitive tasks which have always been human – some jobs may only be affected partly by freeing up labour to perform other tasks
The Future of Employment – Frey & Osborne
3.2 COMPUTERISATION IN NON-ROUTINE MANUAL TASKS
- over past decades: industrial robots have taken on routine tasks of most operatives in manufacturing
- now: more advanced robots are gaining enhanced sensors & manipulators, allowing them to perform non-routine tasks
- example areas:
a) vehicles
leads to computerisation of logistics; creation of detailed three dimensional maps of road networks that enabled vehicle navigation
b) goods production
of higher quality and reliability than labour because sensors allow robots to recognise pattern, don’t even have to be reprogrammed just shown the movements once
* technological advances are contributing to declining costs in robotics = make them more affordable = incentivise substitution of robots for labour in wide range of low-wage service occupations
The Future of Employment – Frey & Osborne
3.3 THE TASK MODEL REVISITED
TASK MODEL BY AUTOR ET AL
a) computers are more substitutable for human labour in routine relative to non-routine tasks
b) greater intensity of routine inputs increases the marginal productivity of non-routine inputs (computer as complementary to labour performing cognitive non-routine tasks)
The Future of Employment – Frey & Osborne
EMPLOYMENT IN THE 21ST CENTURY
- findings imply two waves of computerisation separated by technical plateau
- 1st wave of computerisation: workers in transportation & logistics occupations + office & administrative support workers + labour in production occupations are substituted
Technical plateau: slow pace of computerisation across medium risk category of employment
overcoming this will depend on solving bottleneck of perception & manipulation tasks
2nd wave of computerisation: predicted that depends on overcoming bottlenecks related to creative & social intelligence
generalist occupations requiring knowledge of human heuristics & specialist occupations involving development of ideas and artefacts are leas susceptible
- negative relationship: wages & educational attainment with probability of computerisation
last decades: reducing demand for middle-income occupations;
now: reducing demand for low-skill & low-wage jobs
The Future of Employment – Frey & Osborne
CONCLUSION
- algorithms for big data can readily substitute or labour in wide range of non-routine cognitive tasks + robots are gaining enhanced senses & dexterity = allowing them to perform broader tasks
causing change in nature of work across industries & occupations
1) main finding: most workers in transportation & logistics, office & administration, production + employment in service occupations are at risk
2) main finding: wages & educational attainment exhibit strong negative relationship with probability of computerisation shows discontinuity between 19th, 20th and 21st century in impact of capital deepening on relative demand for skilled labour
19th century: manufacturing technologies substituted for skilled labour through simplification of tasks
20th century: computer revolution caused hollowing-out of middle-income jobs
21st century: computerisation mainly of low-skill, low-wage jobs causes workers to reallocate to tasks non-susceptible (bottlenecks) to computerisation = tasks requiring creative & social intelligence
