The penetration of automation in sectors including manufacturing, BPO, and others has brought disruption in the way organizations conduct their businesses. The low-skilled and mundane jobs involving repetitive activities have been replaced by machines and robots. These machines deliver more output than human employees along with offering precision and speed. This resulted in replacement of human employees. Cutting jobs may not be favorable for humans but it is profitable for businesses in the long run. So, companies are not giving any second thoughts about replacing human employees with automated machines. According to the research from the McKinsey Global Institute, it is estimated that around 375 million people across the globe need to switch their jobs or acquire higher skills to avoid getting out of work owing to the trend of automation and emergence of new technologies. The impact may not be as exact as stated in its findings as regulatory, economic, legal, and other constraints may play part in deployment of automated machines.
PwC released a new report outlining three waves of automation that will impact the jobs from now to mid-2030s. These three waves are known as algorithm wave, augmentation wave, and autonomy wave. Economists at PwC determined these waves of automation after an extensive analysis of skills and tasks required for the jobs of nearly 20,000 workers across 29 countries along with 5,500 workers in the U.K. The research highlighted that the most impact of automation would be experienced from late-2020s to mid-2030s. Moreover, it suggested that women are more likely to be hit by the waves initially. However, men will be affected during the third wave.
Commenting on the research, John Hawksworth, Chief Economist at PwC, said, “We don’t believe that automation will lead to mass technological unemployment by the 2030s, any more than it has done in the decades since the digital revolution began. In the long run, AI, robotics and related technologies should not only make a significant contribution to UK GDP of up to 10%, but should also generate enough new jobs to broadly offset the potential job losses associated with automation.”
According to the research, the algorithm wave is underway and involves automation of data analysis and other simple digital tasks. Only 2-3% jobs would be affected during this wave as many technologies are in early stage of development. The augmentation wave involves automating repetitive tasks and information exchange. Moreover, it involves development of aerial drones, semi-automated vehicles, and robots in manufacturing plants. The potential job cut will rise to 20% by the end of 2020s as AI will become more widespread and many technologies which are now in development stage will mature. The third wave, autonomy wave involves AI which will take inputs from various sources, make decisions, and perform necessary physical tasks with no or little input from humans. The research suggests that nearly 30% jobs would be affected by mid-2030s as autonomous robots and driverless vehicles will be widespread.
The research from PwC also predicted that AI and other technologies will improve productivity, income, and wealth. When increased wealth is invested, the demand for human labor will increase in sector where less automation or no automation is required. The research also suggests that the job losses will offset the jobs created due to investment of increased wealth in the long run.