AI Creates Job Disruption But Not Job Destruction

A common concern surrounding automation in recent years is that it will result in widescale job losses as the work previously done by people is taken over by technology.  Of course, the reality doesn’t really support this narrative, and indeed, companies that invest in technology often end up employing more people as a result of the improvement in their fortunes heralded by the investment.

A cursory glance at the news coverage around automation doesn’t suggest that the fears around its job destructing capabilities is going to go away any time soon, so it feels like all additional data brought to the table has merit, even if it does largely repeat that which has gone before.

Research from the University of Warwick fits this bill and argues that just a quarter of the firms that have introduced some form of AI-based technology over the past few years have suffered any form of net job loss.  Indeed, the number who said jobs have been lost was roughly the same as the number who said that investing in AI had resulted in more jobs being created (the remaining half said it had no impact).

“Advances in AI have reignited debates about the impact of technology on the future of work, raising concerns about massive job losses,” the researchers say. “However, current evidence supporting this is beset by methodological limitations and there is very little analysis of what actually happens in organisations introducing AI-enabled technologies.”

Impact on jobs

The research did suggest that AI-based technology was more likely to have an impact on jobs than investment in non-AI based technology, but this impact was also more likely to be felt in the positive, job-creation sense as well.

“Discussions about AI’s potential impact on jobs have tended to focus on potential job loses as AI is increasingly capable of automating complex tasks,” the researchers say. “And while there does seem to be some evidence of that, our research shows that AI is as likely to lead to net job creation in companies introducing AI as it is to lead to net destruction.

Indeed, the introduction of AI was found to be 28.4% more likely to create jobs than similar investments in other technologies, while it was also 26% more likely to result in job destruction.

Disruption rather than destruction

What appears clear from the research is that AI and associated technologies do indeed disrupt the labor market, with some jobs going and others emerging, but across the board there are more jobs created than lost.

“While we can’t say for sure how many jobs will be created or destroyed from the research, it is likely that the automation of some tasks may mean fewer people are needed to perform some jobs but that increased productivity may reduce costs stimulating sales and demand for workers overall,” the researchers explain. “This of course is likely to depend upon the specific AI-technology used and what employers hope to achieve by using it.”

The researchers go on to suggest that there have been clear moves towards a greater investment in digital technologies during the Covid pandemic, and that this trend is likely to continue for some time.  Despite this investment, however, there have been well documented skills shortages in many sectors.

A period of change

It’s a level of disruption that is echoed by a report from MIT’s Task Force on the Work of the Future, which was created to examine the changes being seen in the labor market.

The report reminds us that over 60% of the jobs of today did not exist a generation ago, with technology not so much driving a destruction of work but rather an evolution in the kind of work we do.

The inevitability of this was underlined by research from Columbia Business School, which found that investing in AI, whether in terms of technology or skills, boosted revenue by around 15%, while also allowing firms to expand their product range and the markets they sell into. This revenue growth then encourages firms to make further investments, and so the cycle continues.

The issue, therefore, is not so much to protect jobs but rather to help people develop the skills needed to perform the jobs of today and tomorrow, while also striving to ensure that those jobs are high quality.

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