The West, primarily the United States, tends to blame low-wage countries – such as China and Mexico – for job losses. However, the greatest job losses are due to automation. Thus, automation based on robotics has improved the productivity of various industries. Artificial intelligence has advanced in the financial, transportation, defense and energy management fields. The Internet of Things, driven by the development of high-speed networks and remote sensors, has improved connectivity between people and businesses.
According to a report by the Brookings Institute, a quarter of US jobs are at risk of being replaced by the advancement of artificial intelligence. Jobs considered “high risk” include about 36 million jobs in office administration, production, transportation and food preparation. The tasks performed in these sectors often contain physical work, information gathering and routine processing activities, which makes more than 70 percent of the tasks potentially subject to automation. To give some examples, 100 percent of the tasks of the operators of packaging and filling machines, as well as ophthalmic laboratories can be automated; as well as 91.4 percent of the tasks performed by food preparation workers.
On the other hand, an analysis published by the Organization for Economic Cooperation and Development concludes that approximately 10 percent of jobs in advanced economies face automation. However, research from Oxford University establishes that the proportion of jobs at risk in the United States is almost 50 percent.
These data should be reassessed due to the appearance of the Wuhan coronavirus or COVID-19. Just in the first few months since the world was alerted of a possible pandemic, Apple cut its sales forecast due to quarantine protocols, Jaguar Land Rover in Britain announced that it could run out of auto parts at its assembly plants, MGA Entertainment, whose toys are made in Guangdong, noted that its production fell 60% compared to the same period last year, Grupo Bimbo temporarily closed one of its 10 plants in China.
In view of this panorama, in the short term we could see an acceleration in the automation of processes, this in view of the fact that human capital is highly vulnerable to the emergence of new diseases and, in particular, due to the depth of this crisis in the manufacturing sector. Today, supply chains are highly vulnerable because they are diversified around the world; thus, any interruption in one of the parts generates significant losses. In this case, with China and Southeast Asia being important centers of manufacturing production and distribution, the interruptions due to the policies that have had to be adopted to prevent the spread of the Wuhan coronavirus have had repercussions in the world economy.
It is highly probable that, in the short term, the industrial sector will highly invest in profound changes in its production systems to take advantage of the technological advances of robotics, artificial intelligence and the Internet of Things to shield its operations from interruptions caused by the inherent vulnerability of human beings. How will governments face this expected scenario?
The truth is that governments are not prepared for a change of such magnitude in industrial production. The instincts of politicians will be focused on recovering lost work instead of allowing people to do less; that is, populist policies.
However, governments will have to rethink their labor policies to adapt to a world with greater technological advances. Thus, fewer people should be allowed to work full time or rethink the term “full time” based on the improvement of productivity. While governments come to these discussions and, above all, to reform their labor laws, we will face a social crisis with low wages and higher unemployment rates. In the short term, governments will not be able to adequately address the problems caused by automation.