Author: Shreyansh Jindal, Graphic: Nina Tagliabue
The BRB Bottomline
The advent of the 4th Industrial Revolution, Artificial Intelligence, will bring a unique set of challenges for policymakers and countries. How will AI affect countries based on political systems, demographics, and the dominant economic sector?
Introduction
Artificial intelligence and automation are always in the limelight during discussions on the future of the workforce. Will machines replace humans in the workplace? To what extent can human beings fight against machines for relevance? This article will explore how Artificial Intelligence in the workforce will likely be implemented considering various factors like political climates, aging demographics, and the state of development of states. Since no nation in the modern world is a perfect democracy, a super-aged nation, or a service-run economy, examples of countries used in this article are based on what ideologies they represent most closely and where they place on different politico-economic spectrums.
Every industrial revolution has brought with it a wave of unemployment. The steam engines eliminated the need for a large share of car and bus drivers. Large-scale steel and iron manufacturing equipment did away with the need for handlooms and small-scale manufacturing. The computer eliminated the need for bank-tellers, schedule assistants, and various other fields. Now, the fourth industrial revolution which includes self-driving cars, AI operated systems like Apple’s Siri and Google Home is taking over several human jobs. AI-driven algorithms will soon be able to do the jobs of doctors, pilots, engineers, data scientists, and many more. This, however, might not necessarily be a bad sign. As observed in all previous industrial revolutions, short-term unemployment after an invention is often followed by steady long-term growth in employment levels.
What is the 4th Industrial Revolution?
The 4th industrial revolution refers to the advent of Artificial Intelligence in the workforce. Until now, several jobs in the manufacturing sector have been replaced by automation and machines. Using machines for production has been shown to reduce manufacturing costs for companies, which makes their use financially sound. Until recently, the fields in which machines were able to outperform humans were clear to identify. Jobs that required thought and critical thinking were performed by humans while those that required physical labor and working on defined algorithms, like a calculator, were done by machines.
The 4th Industrial Revolution changes that. Improvements in technology are leading us into a world where machines can outperform humans even for highly specialized jobs like doctors and engineers. The point of contemplation is how these changes will impact the future of the workplace.
AI across the Political Spectrum
What is the ideal political system? After the fall of the communist-based Soviet Union, the western-style capitalism of free markets was considered to be the ideal form of political governing. Private corporations were given the liberty to determine market prices, the quantity of supply, and the government rarely intervened in the marketplace. However, in the past few decades, the several crises caused by free markets (sub-prime mortgage lending crisis, hyperinflation) have led people to question the sustainability of this model. Now, the advent of the 4th Industrial Revolution will add to our skepticism, more questions will arise due to the skepticism regarding our current political thoughts. Regardless of the political system, the welfare of the middle class is essential to the survival and stability of a country.
Countries that follow the norm of minimal government intervention in business affairs (largely western democracies), like Singapore and New Zealand might face difficulties in how to solve the dispute between productivity and people’s interests. In Singapore, for example, a large share of the population is involved in manufacturing and the economy sustains itself through foreign exports. Even though the country might benefit financially from using machines in the workplace to produce goods, the fear of losing the popular vote in democratic elections might result in the government formulating a policy that guarantees employment to people.
In countries like China, however, the situation is much different. Due to the high level of government control over means of production, the government drives technological change. State-owned entities in China use automation to increase production, however, this increase is used for the benefit of the common citizens in the form of state redistribution policies and welfare programs. Since there are no obstructions to gaining the popular support of voters (as in the case of democracies), efficiency is the top priority of a state. The likelihood of implementing pro-automation policies in autocratic regimes, thus, increases significantly.
AI across Demographics
The future workforce dynamics of a super-aged country will be different from that of a middle-aged country. How will AI affect countries on the age-demographic spectrum?
Aging countries, like Japan and China, will inevitably benefit from the use of automation in the workplace. Close to one-third of all people in Japan are aged above 65, and this number is expected to rise in the coming years. There are fewer people available to work. Demographics like these would normally pose a challenge to a country’s development, however, with Japan’s current rate of technological progress, it will be able to substitute human workers with automated machines. Before the 4th Industrial Revolution, the problem of an aging economy would be solved through immigration, which had drawbacks like an increased competition of a country’s natural resources. Machines and AI robots solve this problem for aging economies, which would otherwise be facing issues like shortages in the labor market. AI algorithms and machines can do their work without demanding high wages or putting stress on resources.
The approach to automation might be different in middle-aged countries where high employment rates are a necessity for stability. In India, the median age of the population is 28, which is significantly lower than most other countries with a high population. In a country like this, the implementation of widespread automation could give unwanted results. Even though the production capacity of an economy will increase with the use of machines, large-scale unemployment will cause a wide economic gap where the majority of a country’s resources are owned by a few people. In middle-aged countries, governments will have to focus on reaching a point of balance between the use of technology and human labor. Neither can be eliminated to remain competitive in the global economic order.
AI across the State of Development
Some jobs are easier to automate than others. Eliminating the need for human labor in the primary (work relating to raw materials) and secondary (manufacturing) sectors can easily be achieved. These jobs do not require a specialized set of skills that can not be done by machines or computers. How will automation be different in countries that are primarily focused on manufacturing compared to those that are service-driven?
The automobile industry in Germany is world-renowned. Germany largely relies on the production and export of its cars to maintain its economy. Since, manufacturing automobiles deals with heavy machinery and does not require any form of thinking, replacing humans is easy. Germany’s robot worker density is the third highest in the world, trailing behind South Korea and Japan, which are also economies that rely on the manufacturing sector as a large portion of their GDP. However, a lot of economies that are dependent on agriculture and manufacturing, also tend to be low-income countries where the economic upliftment of people is more important than the growth in GDP. This could pose a threat to a lot of countries, especially in the global south, that are building their economies on manufacturing but either do not have the resources to use machines or will refrain from doing so due to fear of low employment rates.
In the case of service-run economies, finding perfect or better replacements for human workers will be a lot more difficult. Not only because it is difficult to develop technology that can perform highly specialized jobs like data analysis or interaction with customers, but also because the cost of replacing humans with such sophisticated technology will be very high. This can be seen in the case of the United States, where more than two-thirds of the GDP comes from the service sector, but most of the automation took place in the manufacturing sector and not the service industry.
Conclusion
The 4th Industrial Revolution will bring a lot of changes in the workforce and will demand several structural changes in fields like education, policymaking, and business. The need for strong soft skills like creativity, communication, and the higher emotional quotient will now be more valuable than ever. These skills might be more desirable than technical skills like coding and software programming.
In addition, COVID-19 showed the world that there may be circumstances where it is difficult for humans to come to the workplace. In such cases, companies that have the means to use automation to continue production will be at an advantage over those that do not. Technology is still developing at an unprecedented rate and it remains to be seen whether or not Artificial Intelligence will win the race against humans in conquering the workplace.
Take-Home Points
- The 4th industrial revolution will lead to large-scale unemployment in the short run.
- The future of automation in a country is highly dependent on where the country stands on the political spectrum, the age demographics of the population, and the level of development it has achieved.
- For certain jobs like those involving communication and critical thinking, humans would maintain their edge above machines.
- Democratic governments are less likely to implement pro-automation policies in the fear of losing popular support in elections.
- Aging countries will be more likely to use machines in the workplace than middle-aged countries.