Surviving Automation: A 21st Century Sweepstake

It’s pretty evident: technology is going to replace a considerable amount of jobs in the next decade. Technology is advancing at a pace that we are finding hard to keep up and with heightened interest in research and development, there seems to be no slowing down in this race for innovation and automation. Developed countries pour in money to fund research into unchartered territories while developing and underdeveloped nations look up to their wealthy neighbors in awe, trying to figure out what they could do to get in on the race.

People are scared. A considerable amount of jobs have been drowned already to the waves of advancement in technology and automation and there is fear in the eyes of the laborer as she looks to the future.

But, even if it so, there is a reason to support innovation and a method to survive unemployment.

A couple of hundred years ago, when we didn’t have efficient methods of transportation, hundreds of people were employed to deliver goods from one corner of the city to the other. They pushed carts or simply carried the goods on their backs. Then came the invention of trucks and lorries – bigger vehicles that can carry quite a considerable amount of weight in one go. If 100 people carried goods before, now 95 of them would have lost their jobs as the company doesn’t need as many people literally carrying the goods on the road. But you know who didn’t lose their jobs? Those 5 workers who knew how to drive a truck. How did they survive? They had adaptive skills that allowed them to survive in the changed environment.

A recent example is call-options. If you’ve watched the TV show The Office, you will remember Pam. Well, there are less Pam’s in offices today because “call-transfers” don’t require a person to complete. Automated call transfers have replaced Pam’s all around the world. It’s the same with so many other things from basic to the most complicated.

It’s a phenomena you and I are going to face some day or the other. But there is a solution: adaptive skills.

Adaptive Skills in the Workforce

Companies and governments around the world are investing in capital as much as they can afford. It may not replace the human labor 100 percent, but it will to a considerable extent. As investing in capital and the maintenance of capital is relatively less risky, more and more human labor will be replaced by it.

Adaptive skills talk about the workforce’s ability to gain skills that will allow them to be employed in the changing environment. Your Real Wage is always going to be a derived of your Marginal Product of Labor (MPL), meaning that profit-maximizing firms will pay you what you’re worth. In a very simplified example, if you know how to operate the capital and with the changing environment, if your MPL is high, the firm will not have a reason to lay you off. It is important to stay up-to-date with the changing software and the new innovations in your industry at all times to keep the rate of your employment up.

It’s practically hard for individuals to predict changes to the market. If we take the bottom-line workers in a macroeconomic point of view, it’s almost impractical to think that the entire bottom line will be able to predict the investment of new capital equipment that will replace their jobs. This is where governments come in. Instead of pointing fingers across the aisle, governments can work in partnership with private firms and coordinate these efforts to provide employability skills to the workforce that is operating in a transition-to-automation industry. Private companies will always have a vested interest to work with the government to invest in these employability programs, as they need to make sure that the people have a steady income to purchase the goods they produce. If their target market is unemployed, the goods and services they produce will basically have no purpose or value.

But we all know governments around the world aren’t as efficient as we expect them to be. So as individuals and cohorts in the labor force, it becomes our responsibility to keep up with the ever changing market and to stay a couple of steps ahead of the advancement; to learn about new innovations and move with the wave of change. After all, the technology that may eventually replace us is made by the people.