Automation’s Historical Trend in Creating More Jobs
As ATMs became popular, the number of tellers at local bank branches across the nation dropped by a third. Before accepting this figure as proof that automation causes job loss, there’s a twist. Banks have opened more branches and the number of working bank tellers is higher than ever.
Automation makes it possible for companies to perform services 24/7 and turn out higher quality products with fewer costs, including labor. Robots and machine vision outperform humans on the assembly line, in the quality control phase, and in loading pallets. And that’s just in factories. Service robots are being used in health labs, hospitals, and to assist the elderly and disabled at home.
So the logical outcome seems to be that fewer people will be needed to work as companies of all sizes and across industries make greater use of automation.
History and current experiences show that doesn’t have to be the case. Machines have been replacing human labor since the cotton gin was introduced and society has created jobs and occupations that previously hadn’t existed.
Economist David Autor of MIT gave his perspective on jobs and automation during a TED Talk and used two reasons why he believes new jobs will continue developing.
Who hasn’t used an ATM machine to make a deposit or get cash from a bank? As the machines became widely used the number of tellers per branch dropped. But Autor points out in his talk, Will automation take away all our jobs?, that banks opened more branches. It’s been 45 years since the first ATM machine was used and the number of tellers has grown from 250,000 to 500,000.
Automation didn’t make bank tellers obsolete. Instead, technology enhanced their value as they became more like salespeople.
Autor calls this the o-ring principle. In the 1986 space shuttle Challenger disaster all parts and systems in the craft were working perfectly, except for the mundane o-ring. In automated systems, the skills of people are enhanced and workers remain integral to the success of any company and industry.
A company in a completely different industry had the same experience as the banks. Surface Encounters is a leading fabricator of granite and quartz countertops in Detroit and Indianapolis. In an installment of the video series Why I Automate – Surface Encounters, the company says how it used automation to reduce materials waste by 20% and create higher quality products. Technology made it possible and profitable for Surface Encounters to open more stores and hire more people.
There’s always room for new and improved products and new experiences that consumers are willing to pay for. Autor looks back on how technology freed up workers and entrepreneurs to meet the demands of consumers who want more.
Mobile devices and SUVs are examples of two newer and in-demand product categories.
Autor says the principle at work is the idea that people never get enough and he calls invention “the mother of necessity.”
Technology has definitely changed industries like agriculture. In 1900, farms employed 40% of the workforce. Today, only 2% of laborers are needed to feed a country of 330 million.
Farm employment dipped as the high school movement began and led to a highly skilled workforce employed in other industries. The commitment to education came at a critical juncture and jobs that people could not foresee opened up.
The concern of technology resulting in fewer jobs has been a worry not just in past decades but also in past centuries. An article on the Robotic Industries Association website, American Jobs Evolve with Robotics, describes how people have adapted positively to innovation.
Autor shares that upbeat outlook. He warns in his talk that wealth gained from automation can be misused and a new, highly trained workforce will be needed to fill jobs.
But he also says economists are arrogant to say that more automation will definitely lead to fewer jobs in the future. Not being able to imagine what new occupations might develop doesn’t mean that a jobs shortage is imminent.
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