The labor market in the era of the 4th Industrial Revolution: which scenarios?

Loss of jobs with industry 4.0

There is no doubt that the 4th industrial revolution is going to influence our habits. In this post, I would like to focus on one of the most debating topic and, probably, one of the most unpredictable as well.

The question is: how the 4th Industrial Revolution will impact the labor market?

“Techno-pessimists” argue that the contribution of the digital revolution has already been made and that its impact on productivity is almost over. Economists Larry Summer and Paul Krugman even coined the expression “secular stagnation”.

On the other hand, “techno-optimists” claim that “technology and innovation are at an inflection point and will soon unleash a surge in productivity and higher economic growth” (source: Schwab K, The Fourth industrial Revolution, Portfolio Penguin, 2016)

Who will be right?

The fact is that many different categories of work, particularly those that involve mechanically repetitive and precise manual labor, have already been automated. Many others will follow, as computing power continues to grow exponentially. Sooner than most anticipate, the work of professions as different as lawyers, financial analysts, doctors, journalists, accountants, insurance underwriters or librarians may be partly or completely automated.

In his investigation Luigi Franco, an Italian journalist, highlighted some key points. Martin Ford, a Silicon Valley entrepreneur and author of Rise of the Robots, sentenced that:

“It will be more difficult to automate the work of a caretaker than of a radiologist”

In fact, the experience that for a radiologist requires years of studies and practice, can be collected in few minutes by a robot, once that millions of data (radiographs and reports) have been provided to him. At that point, thanks to the progresses in Imaging Recognition and AI, a machine can associate the radiograph with the right prognosis (source: Franco L, Arrivano i robot e non solo in fabbrica. Ecco che cosa dovremmo fare perchè non ci rubino il lavoro, from FQ Millennium Magazine, Nov 2017).

Similar to the radiologist example, robots, through data collection and Machine Learning, are able to collect millions of laws, regulations and similar case studies. As you can imagine, a human can’t do better.

If robots will do most of our jobs, humans should work less, if we will still have a job.

Therefore, who will provide us enough money to survive, or to buy products?

Bill Gates, founder of Microsoft, noted that

“if a human being earns 50 k$ per year working in a factory, he must pay taxes. If a robot does the same amount of job (or more), it should be taxed at the same level”.

This proposal has been already rejected by the European Parliament in February 2017 and has been evaluated as a nonsense by the academic world: ” If west countries introduced such a taxation, all other countries who won’t tax robots will have a huge benefit, including China”.

How to survive these scenarios? What is your point of view?

The debate is open. In the Industry 4.0 Training Program we provide, some potential solutions are presented and discussed.

Please visit www.accialinicosnulting.com to gather more information, or contact me at nicola@accialiniconsulting.com.

Stay tuned.



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