Automation: Will it Hinder or Empower the Future Economy?

Presentation about automation to improve reliability and productivityAs the inevitability of technological advancement progresses, increased modes of automation will radically shift how the economy functions. Ways in which automation will effect the future of work are met with conflicting conjecture and predictions. Some do not see it as a threat to overall economic health – predicting a future rich with the luxury of excessive leisure time to expand upon human innovation and ways to improve society overall. Other prognosticators see a different future, where the redundancies caused by automation will make significant portions of society unemployed, underemployed, and under-paid as wages are cut by the cost saving measures of machines. Technology undoubtedly makes our lives easier, but at what cost will this convenience come – and if so, what compromises can be made?

Undoubtedly, technology makes the human experience easier by lifting many burdens and inconveniences. The advancements made by machines have allowed us to enter a realm where virtually any possibility can be attained. The diagnosis of medical issues can be made easier through the increased capabilities or doctors and medical professionals. Cancer detection devices with a false negative rate of 0 are now available – as opposed to the 7 percent rate of human error. New cancer fighting tools have resulted in a 50 percent improvement in tumour classification. The elimination of human error in medical diagnosing greatly lifts the likelihood of avoidable tragedies. To a lesser impact, the convenience of communication technology allows patients to interact with doctors without having to go directly to them. This allows doctors to interact more easily with patients, and allows them to assess the severity of issues before determining if patients should visit their offices.

Self-driving cars, although controversial, can in theory decrease the risk of accidents by taking human error out of driving, and can significantly decrease insurance cost for drivers. 3-D printers can and will be able to make a variety of virtually unthinkable objects, including human organs for transplant. The constant innovations made in agricultural technology will continue to improve food yields, and contribute to solving the world’s hunger crisis.

Remedial and routine tasks that were once seen as mundane, tedious and stressful can now be eased through automation. Areas in which automation is gaining ground include: fraud detection, document processing, accounting work, and actuarial claims in insurance, etc. These are all fields in which grueling repetition can be avoided thanks to simple technological approaches.

The general argument made in favour of automation centers around efficiency. Efficiencies become improved by the replacement of routine tasks so that workers can focus on more creative and non-formulaic elements of labour – in order to improve overall output and economic growth. This sounds pleasant in theory, but may have dire consequences to sectors of the economy where low and high skilled repetitive labour is incumbent upon human workers.

According to a study done by Oxford University, 47 percent of the American labour force could be negatively affected by automation. The types of jobs potentially included in these redundancies include: telemarketers, cashiers, receptionists, security guards, taxis, fast food, and warehouse and transport logistics, etc. Entry level positions for college students entering the workforce in professional settings will also be threatened, as many of those jobs require remedial and repetitive office work – disabling young graduates from gaining the necessary experience to move up in their careers.

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The predicament of machines replacing basic routine labour could create massive redundancies in human capital, and cause widespread economic turmoil. Jobs that remain may have to settle for lower wages in order to compete with the cost saving methods of automation. This in turn would give many consumers less purchasing power to buy the products that a highly automated economy can offer on mass.

One proposed but ill-thought solution to this issue is the introduction of universal basic income. The problem with this idea is that it would be highly burdensome on the economy, as it would cause higher taxation and curb economic growth; as well as create a scenario for inflation to occur because of money printing. Furthermore, it would not actually do anything to solve the problem of unemployment, especially since its presence would disincentive people from pursuing free market solutions.

Karl Marx theorized that in the future, as automation takes root, people will accumulate the leisure time to pursue non-obligatory and creative tasks in order to improve humanity. However, he discounts the need for incentive in the human creative process; as well as the role of a specialized and growing free market economy to foster leeway in non-essential areas. If people are poor and constantly starved for employment and desperate to provide an improved life for their families, then writing music, painting a portrait or philosophizing will be the least of their worries. Not to mention, not every human being is necessarily endowed to pursue purely creative aspects in life.

There are more feasible alternatives to approaching automation other than the proposal of universal basic income. In fact, the prospect of massive redundancies may not even take place to the extent in which it is feared. The notion that massive layoffs will occur as an immediate reaction to automation is a natural assumption to make, but fails to consider the ability of labour to be reallocated in a growing and transitioning economy.

As the economy shifts toward automation, machines will likely replace the more tedious aspects of work, leaving room for workers to focus on more creative and intuitive tasks to increase efficiency. More automation will increase the efficiency of productivity by cutting costs. This will allow for goods to be produced and sold at cheaper prices, making them more available to increasing consumer demand. This increase in overall productivity will create a demand for surrounding labour to facilitate the mechanization process. If the economy is constantly growing due to demand from increased output, then human labour will inevitably be needed in order to facilitate a new production environment.

If we look to history as an example, we see that mechanized innovations have actually increased economic output – recalibrating the economy around new advancements. The weaving industry in the United States was revolutionized in the 19th century when machines were brought to the factory floor. The use of sowing machines massively increased output and drastically made the price of cloth cheaper. Workers were still required to operate the machines and tend to them to avoid malfunction. This made the work much easier. The weavers were not replaced, their duties were just altered.

Labour is always transforming. Back in the late 19th century, the majority of the United States economy was farm based. Now, thanks to mechanized farming techniques, only 2 percent of the U.S economy is agricultural. People did not become redundant; they just transitioned to other sectors of the economy.  In the middle of the 20th century, many of America’s manufacturing jobs were depleted, not because of automation, but rather because much cheaper labour could be exploited in countries with no unions or basic worker’s rights. Ironically, automation in the United States may actually bring back a lot of these industries if the cost of production can undercut the prices elsewhere.

The key to providing a better and secure economic future is to combine human and machine labour in a way that increases efficiency and improves overall growth. Automation should be viewed not only as an opportunity to make our lives easier, but as a possibility to improve upon an ever changing economy. Automation may have an impact on some jobs, but the mechanization of labour has been a reality for over 100 years – with little negative effects on employment. The best solution to transitioning labour practices is to emphasize the importance of a free economy, one which is adaptable to inevitable change and creative enough to constantly re-constitute itself. The debate will continue to rage on, but naysayers should consider the opportunities granted by automation, rather than fixate on its supposed deleterious effects.


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