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Serious Robots are replacing humans rapidly in every field

Robots set to take 20m jobs globally by 2030, SA and Victoria will be hard hit, warns report - Business
Updated 23 minutes ago
robot
PHOTO Fuelled by advances in AI, machine learning, and engineering, robots will also play a bigger role in services sectors.
Up to 20 million manufacturing jobs could be lost to robots by 2030, according to a new report by Oxford Economics.

The study found that robots will lead to twice as many manufacturing job losses in low-skill areas, thereby aggravating income inequality.

The report, "How Robots Change the World", estimates that each new industrial robot eliminates 1.6 manufacturing jobs on average, and calls on governments to prepare with policies including better training and welfare programs, and a universal basic income.

It suggests that in Australia, South Australia is most vulnerable to the future robot rollout.

The state is Australia's most manufacturing intensive but has the slowest-growing economy and low levels of manufacturing productivity, the report argued.

CEO and chief economist at Oxford Economics, Adrian Cooper, said, while the rise of robots would boost productivity and economic growth by creating jobs in yet-to-exist industries, existing business models across many sectors would be seriously disrupted.

"For both people and businesses, the effects of these job losses will vary greatly across countries and regions, with a disproportionate toll on lower-skilled workers and on poorer local economies," he said.

"In many places, the impact will aggravate social and economic stresses from unemployment and income inequality in times when increasing political polarisation is already a worrying trend."

But there's a $5 trillion 'robotics dividend'
But the report suggests that, overall, robots will do more good than harm.

It found a 1 per cent increase in the stock of robots per manufacturing worker leads to a 0.1 per cent boost to productivity, measured by output per worker — enough to drive meaningful economic growth.

A 30 per cent rise in robot installations above Oxford Economics' baseline forecast for 2030 would, for example, trigger a 5.3 per cent boost to global GDP in that year — equivalent to $4.9 trillion to the global economy that year, or an economy greater than the projected size of Germany's.

Fuelled by advances in artificial intelligence (AI), machine learning and engineering, robots will also play a bigger role in services sectors including retail, healthcare, hospitality and transport, as well as construction and farming.

But the report found that jobs in less structured environments — and which demand compassion, creativity or social intelligence — were likely to be carried out by humans for decades to come.

There are 2.25 million robots currently in use
The number of robots in use worldwide multiplied three-fold over the past two decades, to 2.25 million.

Manufacturing accounted for more than 86 per cent of the world's operational stock of industrial robots at the end of 2016, according to the International Federation of Robotics.

About one-in-every-three new robots worldwide is now installed in China, which accounts for around one-fifth of the world's total stock of robots — up from just 0.1 per cent in 2000.

It is expected the global stock of robots will multiply even faster over the next 20 years, reaching as many as 20 million by 2030.

The report projects China could have as many as 14 million industrial robots in use by 2030, dwarfing figures for the rest of the world as China further consolidates its position as the planet's primary manufacturing hub.

1.7 million jobs lost to robots since 2000
About 1.7 million manufacturing jobs have already been lost to robots since 2000, including about 400,000 in Europe, 260,000 in the US, and 550,000 in China.

The impact happens over time. Within the first year of a robot's installation, roughly 1.3 workers are displaced, on average, from their job; this extends to 1.6 workers over subsequent years.

The report analysed the job moves of more than 35,000 US workers over their careers.

It found more than half of those leaving production jobs in the past two decades were absorbed by just three occupational sectors: transport, construction and maintenance, and office and administration work.

It predicted these sectors are among the most vulnerable to automation over the next decade.

Lower-income regions hardest hit
To highlight the geographic areas of major economies that are most at risk from robotisation, the report unveils uses a "Robot Vulnerability Index".

This index ranks the most- and least-vulnerable regions of seven key advanced economies: the United States, Germany, the United Kingdom, France, Japan, South Korea and Australia.

It found that, on average, each additional robot installed in these regions leads to almost twice as many job losses as those in higher-skilled regions of the same country.


GIF: 'Highly intelligent' robots have been represented on screen, including in I, Robot Play GIF 0.1 MB Settings GIF: 'Highly intelligent' robots have been represented on screen, including in I, Robot
In Australia, Victoria and NSW are less vulnerable to robots than South Australia, and are also faster growing.

"Melbourne and its surrounding area have a diversified manufacturing base, although one that is declining in relative importance as Melbourne's service economy strengthens," it said.

"Victoria's manufacturing productivity is also higher than that of South Australia."

It said NSW looks much less vulnerable than either Victoria or South Australia.

"In this state, the labour market has become less dependent on manufacturing jobs in recent years, while manufacturing productivity has improved," it said.

"So the impact of further robot densification will likely be muted."

Australian regions most vulnerable to robots

(Source: Oxford Economics)

Region Index Score
South Australia 0.42
Victoria 0.39
Tasmania 0.37
Queensland 0.32
New South Wales 0.28
Western Australia 0.14
Northern Territory 0.06
Posted 34 minutes ago
 
Rise of the machines: Is a universal basic income the answer for mass unemployment?
Updated Wed 5 Jul 2017, 8:37 AM AEST
Video 5:43
Why the world's richest say a universal basic income is good policy

The Business
It's just over three decades since Dire Straits immortalised their satirical free money formula in song.


Money for Nothing music video
Sadly, not all of us are skilled at Hawaiian noises or banging on the bongos like a chimpanzee, so we're not going to make it as rock legends on MTV, which itself has been usurped by YouTube anyway.

But what if you didn't have to be a rock star to get money for nothing?

What if, instead of humans installing microwave ovens and moving refrigerators, robots did it for us, and then we got paid to do nothing?

Much of the discussion about artificial intelligence and machines is cloaked in fear - the fear that they will take our jobs and leave the masses unemployed and destitute.

But what if there are some jobs - like custom kitchen deliveries and moving colour TVs - that we'd rather like them to take?

"I think we should embrace automation. The only problem we've got now is we're not embracing it," argued author and former BBC economics editor Paul Mason.

"We're paying people with degrees to make coffee. We are replacing machine car washes in Britain with hand car washes, where six guys with rags can undercut a machine."

It's long been a dream of futurists that machines might take over odious and repetitive tasks so that people might work less and enjoy more leisure.

Which jobs will AI take over?
The difference in the past couple of decades is that machines are becoming increasingly capable of assuming not just manual roles, but mental tasks as well.

But this dream could turn into a nightmare if the fruits of the machines' labour are retained exclusively by their owners.

It's a nightmare that renowned physicist and cosmologist Stephen Hawking sees unfolding before his eyes.

"Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution.

"So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality."

A universal basic income (UBI) paid for by higher taxes on the wealthy, especially those whose wealth is derived from capital not labour, is a key plank in the first option.

Elon Musk speaking about a universal basic income
Tech billionaire Elon Musk is an advocate, even though he would probably be one of those most heavily taxed.

"I think ultimately we will have to have some kind of universal basic income, I don't think we're going to have a choice," he told a global summit in Dubai earlier this year.

Troy Henderson is doing his PhD on universal basic income and, even though he's sceptical that robots and AI really will lead to mass unemployment given historical experience with major technological change, he said there are still good reasons to introduce a UBI.

"A reduction in poverty levels, a reduction in inequality, an increase in income security and also an increase in personal freedom," he argued.

The World Today
"I'd also say it is a way of redistributing value in the form of money from over-remunerated forms of work, such as banking for example, to under-remunerated forms of work, such as looking after kids or looking after elderly parents, which today is disproportionately done by women."

Money for nothing doesn't come cheap
But that's precisely the major sticking point around a universal basic income ... money.

Giving everyone money for nothing doesn't come cheap.

"If you wanted to replace the current system with just a level of payment that was about the level of Newstart, we'd be talking $240 billion a year in spending," estimated Professor Peter Whiteford from ANU's Crawford School of Public Policy.

The Money
One option would be to reduce some of the more generous existing benefits, such as the aged and disability pensions, to the level of a UBI.

But that probably wouldn't be popular.

"If you set it at the level of Newstart you would be cutting the benefits for pensioners by 40 to 45 per cent," argued Simon Cowan from the Centre for Independent Studies think tank.

Even with those savings the net cost would still be huge.

"You would still have to find something like a $170-190 billion in order to fund this scheme," Mr Cowan estimated.

The overall spend for the Australian Government this financial year is about $450 billion, and it already has a sizeable budget deficit, so it would need to raise nearly 50 per cent more tax revenue to fund even a very basic universal income.

That could lead to some eye-watering tax rates for those still working.

"You'd be talking about everybody having a marginal tax rate of about 60 cents in the dollar," Professor Whiteford reckoned.

But it's zero sum game. For every higher-income person paying more tax, there'd be a lower income person made better off, with most people in the middle about the same.

Will we want to work if we're paid to do nothing?
The second big obstacle to UBI is the question of whether anyone will want to work at all - a question tested in North American trials in the 1970s.

"If you were an adult male it didn't make much difference in the amount of work you did, mothers tended to spend more time with their children and young people tended to spend more time in education," Professor Whiteford said.

The Netherlands, Finland and Canada's most populous province, Ontario, are currently running their own trials.

Approximately 250 Dutch are set to receive around $1,400 a month, 4,000 Canadians will receive up to $17,000 a year and 2,000 unemployed Finns will be paid about $840 monthly, regardless of whether they earn anything else or not.

But Finnish basic income researcher Otto Lehto from Kings College London says the Finnish trial, run by a centre-right Government, is too limited in scope.

"The idea of basic income has always been to really be universal and applicable to people at different points in their lives and in different employment situations," he said.


Money music video
"The experiment will not test out whether self-employed people, students, entrepreneurs or so on will benefit."

But even if the trials prove that most people still want to work when they don't have to just to survive, will the better off want to pay a guaranteed wage for those who don't?

On this front I think Pink Floyd offers more insight than Dire Straits.

"Money, it's a crime. Share it fairly but don't take a slice of my pie ... if you ask for a rise it's no surprise that they're giving none away."

This is part two of a three part special by The Business and Business PM which looks at how automation will reshape the Australian workforce.

Posted Tue 4 Jul 2017, 2:10 PM AEST
 
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