The impacts of automation on society

The impacts of automation on society

By Paul Ayers, Chief Customer Architect, Oracle [NYSE: ORCL]

Paul Ayers, Chief Customer Architect, Oracle [NYSE: ORCL]

When I was in high school in the 80’s I vividly remember a teacher talking to us about how we needed to have a hobby which could make us money as computers were going to take away most of the available jobs and consequently we were going to have so much time on our hands we would need to have something to occupy our time as well as earn a living.

As I reflect at how wrong he was, I can’t help but think was it the case that he just under estimated the time technology would take to change our society to such an extent?

Or is it that the impact of automation is just over blown and for every job it takes away another is created in a new industry or business paradigm?

It would seem that technology has had little overall impact in relation to the Australian unemployment rate over the last 40 years. In the early 80’s unemployment was around 5.8%, and in 2019 it sits at 5.3%. However, is it other factors like population increases that is fueling jobs growth and therefore masking any major job losses due to the introduction of automation? Or is it we are just not there with the levels of automation required to really make any measurable difference to the workforce?

“There is little doubt automation will become ubiquitous which will result in less human involvement – it will just take more time that most people envisage. We are only seeing a glimpse of its potential now”

Therefore, is it just a timing issue and we will eventually see automation result in significant unemployment? Is it that it’s just slowly creeping up on us without many really noticing?

What will this mean to our society if the automation potential plays out as some suspect?

We are already seeing a significant increase in homelessness. This is, in part, being driven by a society where mental illness and addiction is becoming more common and government funded programs to assist, few and far between. We are also seeing a significant jump in the cost of living, combined with low wage growth. This has resulted in many people financially struggling and ending up living rough.

But I’m not sure we can blame automation for this situation.

There are other factors at play which will influence the future state of our society. The ageing population is an obvious one. It will have two major effects. The first is less people in the workforce and therefore paying less tax. It has been reported that over the next 40 years the number of Australians working and paying income tax for every person over the age of 65 will fall from 4.5 to just 2.7. This is a relatively easy fix for governments as they can just look to collect revenue another way but there is a limit to how much income you can extract from your people.

The second, and perhaps more challenging one, is the increased strain on an already ailing health system as ageing takes its inevitable toll.

In a nutshell, for Australia (and all other countries around the world), this essentially means more costs with less revenue coming in. Like a business, the Australian economy must be able to handle such financial stress, but I am not seeing any planning or vision around how this is going to be achieved. The health system can certainly be patched with lots of money (as is what is happening now) but the well is drying faster than the Artesian Basin – with no plan to fix it.

But back to topic - the progression o f automation will be

reliant upon investment from both industry and organisations. It doesn’t take a rocket scientist to see that the IT industry will continue investing in automation technologies as ‘there is money in them hills’!

I do, however, see an issue will sourcing the appropriate skills to implement the technology effectively. The skills required will be a mix of both business and technology and I’m not sure we have the correct strategy in place to meet the expected demand in this area.

The other factor will be the speed at which organisations embrace the move to digital. I see a lot lip service paid to such a move but little real transformation. This is especially obvious in the Public Sector where Agencies are struggling to even keep the lights on let alone embrace a digital future.

So, will there be a future where we will need to get a hobby that makes us money due to the vast amount of free time we will have on our hands due to computers taking over?

Well certainly not in my career but that’s not to say the collective ‘we’ doesn’t need to start thinking and planning for this possible future.

There is little doubt automation will become ubiquitous which will result in less human involvement – it will just take more time that most people envisage. We are only seeing a glimpse of its potential now.

Some of the many reports on this subject list a number of jobs which will likely be impacted more than others. I disagree with many of the predictions that such a change will come quickly- but time is all relative I guess!

I can’t see, for example, that driverless trucks will be roaming the average Australian highways anytime soon. Most of these future-state reports target the old truck driver as a job of the past – I think many other jobs will go before this one will. There are way too many technical challenges with driving on Australian roads despite what some are suggesting.

That’s not to say our society as a whole is not going to be further challenged as automation matures. Increasing population, climate change, less jobs and less people in the workforce all points to something fundamental needing to change.

It could be that the very frameworks that we base our society on will be questioned in time. For example, we simply will not be able to provide the level of safety net that our generations before has experienced. Healthcare, as a case in point, will not be able to be as equitable has it is now under the current Australian healthcare system, Medicare. Although one could argue that it is far from equitable now, but it is going to get significantly worse simply due to burgeoning costs mixed with basic human greed.

We are seeing this play out in the American society right now. The divide between the rich and the poor is growing at an alarming rate. At least in Australia we have a health system at present which does cater for basic healthcare for its citizens. But as discussed, will this be sustainable in the future given the challenges ahead?

Are we fast heading to a world where only the rich can afford appropriate healthcare?

Or are we going to have to change our frame of reference for the greater good?

If automation takes hold it will mean less jobs which, in turn, means more competition to get those remaining jobs out there. This will drive behaviours aimed at the differentiation of candidates in the workplace. People will also naturally work longer and harder and for free in order to keep their precious jobs safe. We are seeing this happen now.

There will also be a downstream flow on effect on our educational system. Our kids will need to spend longer and work harder at school as a method of differentiation. Will this mean that only the smarter and hardworking kids get the work in the future? Or are only the privileged rich kids from the well-to-do private schools going to get opportunities? Regardless, how will our education system handle this shift and how can this be afforded in a society with less revenue coming in as well as a health system in crisis? Also, will parents be able to afford the needed education when they won’t have jobs themselves to pay for it?

The Australian Treasurer Josh Frydenberg recently suggested a possible solution to the ageing population is to keep Australians working into their 70’s and beyond. But notwithstanding the obvious challenges around whether older people are even capable of remaining in the workplace, how can they do that when there will be potentially less jobs? Will the older people be seen to be taking the jobs of the younger people?

Regardless, what we will see is significant changes in the workforce which will inevitably bring a greater social divide.

I see this as a bit like climate change –many people seem to be ignoring the issue hoping it will go away. It is obvious we, as a society, are not ready for such a fundamental shift but we need to start planning for it now or our future generations we will pay a high price for our lack of foresight.

May be my high school teacher wasn’t that wrong after all, just well and truly before his time.

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