Despite alarmist predictions to the contrary, the development of newer and better ways to do things will lead to broader employment, better jobs and increased prosperity, per Quadrant Information Services CEO Michael Macauley.
In January of this year, the World Economic Forum, at its annual meeting in Davos, Switzerland, released a report entitled "The Future of Jobs," wherein it predicted the net loss of millions of jobs worldwide by the year 2020 due to developments in fields such as robotics, big data and artificial intelligence. According to the report, about 7.1 million jobs will be shed, with two-thirds of the losses concentrated in office and administrative positions. Per the report, while this would be somewhat offset by 2 million new jobs in areas such as business and financial operations, the net result would be about 5.1 million fewer jobs overall by 2020.1
"With all due respect to the President, the Bank of England, the World Economic Forum, and the journalists who report on them," Quadrant Information Services CEO Michael Macauley said, "this is a lot of nonsense. It is true that there is a great deal of progress being made with automation, and that new tools and technologies, as they come along, have an impact on the way people do their jobs. It is not true, however, that ‘more automation means fewer jobs.'
"In the insurance industry, for example, the implementation of better business processes is freeing up highly-qualified people to do customer service, which is a very important but expensive function. It is enabling the creation of entire departments that can perform predictive analytics and evaluate a completely new influx of data, from telematics to usage-based insurance. It's increasing the ability of marketers to analyze possibilities and look for new customers without having to burden other staff with giving them the data they need. It's freeing actuaries and analysts from clunky, administrative number-crunching and giving them more time to evaluate and plan—which is what they do best. Finally, It's enabling insurance carriers—and from what I can see, companies in most industries—to build better growth strategies than they ever could before."
Macauley states that such automation opens up the possibility of creating more jobs than it replaces, by a factor of about two to one.
Macauley notes that he is by no means the only observer to cast doubt on the spurious "more automation equals fewer jobs" equation. Writing in Forbes shortly after the release of the World Economic Forum report, economics and public policy commentator Tim Worstall observed that the net loss of 5.1 million jobs, even if were to happen, represents an increase in global unemployment of only 0.3%—a figure too small to even measure within the standard margin for error. "And the WEF is telling us that we should be worried about a 0.3% difference in a 100% flow? That's preposterous. They're not modeling the process as that flow at all. They're [just] looking at the static numbers."4
Which, per Macauley, is exactly the problem with these erroneous doomsday predictions. "They're applying a set of relatively rapid changes to what they assume will be a slow-to-react, status quo-seeking private sector. In actual fact, the private sector will rapidly adopt new technology—right now, that's particularly true of big data, which is the most powerful basic business tool to come along in years—to drive growth and profitability."
Technology is freeing people to focus on what's strategically important, saving consumers money and increasing employment. Quadrant says there is no reason to be afraid of the future.
About Quadrant Information Services:
Quadrant Information Services, headquartered in Pleasanton, CA, provides pricing analytics solutions for property and casualty insurance companies. Quadrant gives actuary, product development, pricing, sales, and marketing personnel at its client companies—which include all the major insurance carriers in the United States—the data they need to make accurate, data-driven decisions. An industry innovator since its founding in 1991, Quadrant has provided the P&C insurance field with a long series of technological advances, most recently InsureWatch—the industry's first cloud-based pricing tool—which allows the user to produce unlimited combinations of reports with the click of a mouse. For more information and to learn why Quadrant is recommended for insurance companies that are tired of losing the right customers and winning the wrong ones, please visit http://www.quadinfo.com.
1. Picchi, Aimee, "The robot revolution will take 5 million jobs from humans," Moneywatch, January 18, 2016. http://www.cbsnews.com/news/the-robot-revolution-will-take-5-million-jobs-from-humans.
2. Haldane, Andrew G., "Labour's Share," Speech, Trades Union Congress, London, November 12, 2015. http://www.bankofengland.co.uk/publications/Documents/speeches/2015/speech864.pdf.
3. Church, Nate, "White House Predicts Massive Job Losses to Robots," Breitbart, February 23, 2016. http://www.breitbart.com/tech/2016/02/23/white-house-predicts-massive-job-losses-to-robots.
4. Worstall, Tim, "WEF's Davos Report on Robots, Automation and Job Loss: A Trivial Result of No Matter at All," Forbes, January 18, 2016. http://www.forbes.com/sites/timworstall/2016/01/18/wefs-davos-report-on-robots-automation-and-job-loss-a-trivial-result-of-no-matter-at-all/#6a2b4c5114f0