/Fact check: Should your job fear bits and bytes?

Fact check: Should your job fear bits and bytes?

In the plenary meeting of the European Parliament on December 14th 2018, MEP Yana Toom claimed that in the coming 25 years, 30 percent of today’s jobs in Europe will disappear due to artifical intelligence, digitalization and automatization. She bases her claim on an Oxford study published in 2016. Was the study misinterpreted? Were the numbers exaggerated? And ultimately, is the claim itself true?

In this post-digital age of drones, smartphones and instant global communication, one can’t help but wonder what this will mean for the future of employment. The wall of text concerning this topic of the European Political Strategy Centre conveys the importance of the matter.

Consequently a fierce debate has erupted between economists and policy makers across the board. The focal question being: how many jobs are at stake or risk of automation? Everyone wants to be prepared for the future, but based on which facts? We will summarily compare 5 different studies in an attempt to shed some clarity on the issue.

First off, there is the study that MEP Yana Toom referenced. Made by Oxford University (Berger, Frey) on behest of the European Commission in 2016. This study bases itself on extrapolated data from the 2013 Frey and Osborne rapport aptly called: The Future of Employment which specifically looks at the US job market. But the EU-focused 2016 study does not give an exact estimate to back up MEP Toom’s claim. It does however reference numerous other studies, which will be outlined below.

The following studies have attempted to identify the types of jobs and tasks that are more prone to workplace automation and attempted to quantify them. They are generally more pessimistic and consider that if the ‘main’ aspect of a job can be automated, all of it can be. These are the 2017 McKinsey rapport; the 2016 Arntz rapport for the OECD and the 2013 Frey and Osborne rapport. This last one has garnered the most press attention. In 2013 Frey and Osborne famously calculated that 47% of existing jobs in America are susceptible to automation (pg. 1).

In Europe this number ranges from 47 percent in Sweden to 62 percent in Romania (see figure below). Unsurprisingly low skilled, uneducated jobs face the highest risks. Transportation is an important and vulnerable sector to consider. An overview per country, following the McKinsey rapport can be found here.

Figure 1 – Susceptability of computerization of high risk jobs per country (Berger-Frey 2016)

However much of the discussion about the future impact remains speculative, as several studies highlight evidence that automation may create as many new jobs as it destroys.

We can look at studies made by MIT (D. Autor – 2015, pg. 24-26) and Bessen (2016) to illustrate this. Autor and Bessen both make the case that middle skill work that requires a mixture of different skills, both socially and academically for example, have less to fear than expected.

However, both of them point to the fact that if public policy does not adequately prepare the population for the increased demand in IT-skills, disastrous results could follow.

So the issue is not that middle-class workers are doomed by automation and technology, but instead that human capital investment must be at the heart of any long-term strategy for producing skills that are complemented by, rather than substituted for by technological change. The importance of digital skills need to be emphasized in order to keep up with these advances.

In conclusion, the MEP Toom’s claim appears somewhat true at first, but ends up having to be categorized as uncheckable, since even for the smartest of scientists, there is no way to predict the future of society and economics.

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