Hiding from the Computers Part 1: The 47%

A rather dismal chart to kick off the New Year (click for larger image):

Probability of Computerisation jpeg

It’s taken from a paper by Frey and Osborne of Oxford University entitled “The Future of Employment: How Susceptible Are Jobs to Computerisation?”.

Let’s break this chart down. The total area under the curve is equivalent to aggregate US employment. The bottom x axis is the probability that any given job will be computerised: it ranges from zero, no chance of computerisation, to 1, a 100% chance of computerisation. Further, the authors have lumped these probabilities into three broad categories: 1) low probability, zero to 30% change of computerisation, 2) medium, 30% to 70% chance and 3) high, 70% to 100% chance.

So if you are doing a job in the high probability category, there is a high risk that your job will disappear over the course of time. How many people are in this category. Kindly they give the rather shocking number: 47%. Conversely, around 33% of the working population sit in the low probability category and can sleep easily at night for a little while longer.

Now the eagle-eyed will have noticed that there are no dates given in the chart over which the rise of the computers will take place. This is because the authors have looked at the problem as engineers, disassembling jobs into their component parts to decide which bits can be replaced by computers and which can’t. They don’t try to predict when the technology will reach the necessary maturity. In their words:

According to our estimate, 47 percent of total US employment is in the high risk category, meaning that associated occupations are potentially automatable over some unspecified number of years, perhaps a decade or two. It should be note that the probability axis can be seen as a rough timeline, where high probability occupations are likely to be submitted by computer capital relatively soon.

So, accordingly to their guestimate, computers will munch through the job market—moving from right to left in the chart—arriving in the medium probability category some time around 2030.You can also see where you don’t want to be; for example, the yellow band ‘production’ stinks along with orange ‘office and administration support’.

To arrive at this chart, the authors looked at 702 occupations and analysed them with respect to how susceptible each one was to computerisation. Computerisation here is taken in the broad sense to include machine learning, artificial intelligence and mobile robotics. To do so, they identified cognitive and non-cognitive bottle necks to computerisation and used these as variable to predict the order and extent of future computerisation. The bottleneck variables are given below:

O Net Variable Jan 14 jpeg

Further, a bottleneck such as manual dexterity could be classed as low, such as fitting a light bulb, to high, as for example performing open heart surgery.

Overall, the paper’s analysis suggests that the job market, as we know it, will be blown up over the next two decades, along with all our economic assumptions. Yet I hear not one politician talking about this risk. I will return to this subject in my next post.

13 responses to “Hiding from the Computers Part 1: The 47%

  1. Although I suppose so many classes of employment have disappeared over the years: this is no new phenomenon, and technology has been replacing labour at least since the beginning of the industrial revolution, with computers replacing humans since the 50s. Where are the typing pools, ranks of clerks, unskilled manufacturing jobs now? Excluding those that have been ‘offshored’, these have been replaced, either gradually or suddenly. In the former instance, those displaced move into other areas where demand is high, such as healthcare, while in the latter, a technological advance can create a generation of the unemployable with obsolete skills. Hard for a government to foresee such an outcome, and policy can only prepare people in a general sense through education. While dislocations can be painful in the short term for those made redundant, the longer term impact on society is not necessarily negative, and quite often positive. I’m not sure unemployment rates are structurally higher now than over the last hundred years, and job quality is possibly higher?

    • Rob: This is the traditional ‘comparative advantage’ argument. Alas, the numbers show a declining labour force participation rate in the US, which is at the forefront of the trend, and a decline in median real wages which is now over 30 years old. And we have barely started in terms of potential job replacement. I’ll deal with all this in depth in my next post.

      • Fair enough. Then I don’t see a solution in policy, as the leadership od all mainstream parties (both US and UK) is too much in thrall to the economic consensus of globalization. I guess the obvious direction is more political instability until the disenfrachized find a coherent political voice, possibly advocating ludditism, but almost certainly anti-globalization, and eventually a new socialist era.

  2. Do the 33% rely for their income on the spending of the 47%? Does the resource price spike of 2008 mean location and resource-intensity of employment are going to become more important than computerisation? I expect there are huge ‘big picture’ changes coming, but I am unconvinced that this is the area to watch. I await your next post!

  3. Matthew: yes, the interactions are very complex. As regard your first point, I would say that a chunk of the 33% do rely on the spending of the 47%. This is a neo-Marxist argument which is now popping up all over the place; it is interesting that it formed the core of Raghuram Rajan’s thesis in his book “Fault Lines”, in which he argued that the credit crisis was the result of a desperate attempt by the Fed to prop up demand within the working and middle class through an ultra easy monetary policy, which in turn caused a massive and unstable asset bubble. Rajan, now governor of the Indian central bank but before that at the University Chicago and IMF, characterises himself as right-of-centre.

    As regards the energy and resource depletion implications, I guess it really depends on how the political system deals with the inequality generated by computerisation. You could have a high energy and resource-consuming cognitive elite and an impoverished unemployed mass. Ironically, this would have a lower carbon, energy and general resource footprint in aggregate than now, but it doesn’t look a very stable or attractive place.

  4. Rob: The chink of light in all of this is that technology ultimately gives us the potential to produce more for less—and more doesn’t just mean stuff, but it also means non-material services. And it could eventually be more for fewer carbon emissions as well. Unfortunately, we have a 20th century socio-political system that is driving us toward a much more negative outcome. And I also don’t think self-reliance and socialism—both disastrous experiments tried in the 20th century—are the answer either.

  5. Except for the corrosive effects of too much leisure, it wouldn’t matter who or what does the producing as long as the resulting products are equitably distributed. My solution- tax the rich owners of the automated factories and give a reasonable subsistence to the unemployed. Redistribution will happen one way or another. It would certainly be better to do it by legislation than wait for a violent revolution.

    And why do you think that self-reliance (think the Amish or Mennonites) and socialism (think Cuba) can never be models of sustainability in a world facing inexorable resource depletion? I think self-reliance and socialism are far more plausible than the globalized capitalism we have now.

    • Joe. I think I would need half a dozen posts to reply to all the points you make, but briefly:

      Theoretically, I agree that if technology allows us to produce more goods and services, the problem should be just a case of distribution. This is basically what Andrew McAfee and Erik Brynjolfsson argue in “Race Against the Machine” which I talk about in Part 2 (and will talk a lot more about in Part 3). That’s the theory. However, socio-political institutions are key. The old Soviet Union was perfectly capable of reverse-engineering but could never produce a car comparable in quality to the West. I will talk a lot more about this later.

      Second, I am talking about self-reliance as in Maoist China, North Korea Juche and the Indian Licence Raj; i.e., at state level. I don’t mean localism and am a great supporter of the Transition Network. I also think you can be a supporter of localism yet be welcoming of technological development and the globalisation of information and people (but perhaps less so goods).

      As for socialism, here I mean historical examples. The former Soviet Union and Maoist China proved dysfunctional; the fact that a) they collapsed and b) people fled from them not to them mark them as failures to me.

      Cuba is a mixed bag. Unlike the Soviet Union and Maoist China we actually have data on ‘happiness’ for Cuba. On the Cantril Index it comes in at around 5.5, which is far below most of Latin America (see Columbia University’s World Happiness Report). Given Cuba’s state of development, this is not a bad number though. But then you have to argue whether its state of development is a function of Castro-style socialism or the US embargo (I would likely weight the former much higher).

      Some Transitioners hold up Cuba as a role model, especially its performance during the ‘Special Period’ after the Soviet Union cut off its oil. This is somewhat patronising as it doesn’t take into account what most Cubans think about the ‘Special Period’ or their situation now. Overall, Cubans are a lot less happy with their lot than other South American countries integrated into the global capitalist economy.

      None of this contradicts the central themes of this blog: the search for low carbon, low resource, equitable economics models. I just don’t think we will find many answers to our 21st century problems in 20th century political thinking.

  6. Well then…how about the 18th or 19th centuries?

    • Well, I guess what I mean is that there is not one pre-packaged socio-economic model from the past that we can reintroduce to tackle our current problems. We need to pick bits out of past thinking plus add some new thinking.

  7. I think Louis Kelso had the right idea back in “The Capitalist Manifesto” in 1958: if work is to be displaced by machines, the workers need to own the machines, and personally, not via their pension fund. John Stuart Mill and worker cooperatives ride again! (Richard Wolff on Mondragon in The Guardian, 24-6-12, is worth a look).

  8. There must be something about the bicycle – Artisan’s Asylum has its bike workshop, Mondragon has Orbea, we have Edinburgh Bicycle Cooperative, Broken Spoke of Oxford, Brixton Cycles…but Frey and Osborne rank bicycle repairers at a lowly 596/702 as safe from computerisation. Let battle commence!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s