The Investor 89 Asia

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for years, and automation is spreading
through financial services – known as
‘robo-advice’.
But robots are also penetrating other,
less obvious, areas of industry. In
agriculture, they are being tested for tasks
such as automated weed control, sensing
when fruits and vegetables are ripe, and
checking the moisture and nutrient levels in
soil4.Merrill Lynch’s report on the robot
revolution5 highlights how automation has
already had a significant impact on the
industry. For example, in 1960 a single
farmer in a country using machines in
farming could produce enough food to feed
25 people.Today, that figure is 155, and by
2020 it predicts that will have risen to 200.
Further automation will be a crucial factor
in helping to feed the world’s growing
population.Merrill Lynch also says that
food production will
have to increase by
70% by 2050 to meet
the world’s needs.
Others, however,
point to the
potential costs of
the robot revolution.
Predictions of the
impact this will have on jobs are
increasingly gloomy. In January,
consultants from Deloitte warned
that more than 11 million of the UK’s
30 million jobs are at high risk of
automation 6, with the wholesale and
retail sector at greatest risk. In the US,
President Obama’s economic report
earlier this year pointed to research
ANALYSIS
22 | THE INVESTOR
When the Google-
designed
computer
AlphaGo beat
the world number
two player at strategy board game Go by
four games to one in March1, it was hailed
as a milestone for artificial intelligence
(AI).This was not simply because a
computer had beaten a human; it was also
because Go is so complicated, with more
possibilities than there are atoms in the
universe2, that it was assumed a computer
would not be able to see through the
millions of potential but pointless moves
that human intuition is able to navigate.
AlphaGo’s victory was a tangible sign
that machine learning is coming of age.
Dramatic improvements in processing
power – Moore’s Law holds that the
processing power of
computers doubles
every two years3 –
combined with
exponential increases
in the amount of
information available
through technology
(known as big data),
are transforming the types of tasks that
can be undertaken byAI and the speed
with which it undertakes them. Driverless
cars could supplant the trucks and delivery
drivers who currently shift goods around
the globe; complex legal documents
might be checked by intelligent machines
rather than trainee lawyers; hedge funds
have been using automated trading systems
the robot
revolution
Huge technological advancements mean that
automation could threaten jobs worldwide
By Heather Connon
Jobswill only disappear
when businesses invest
in computerised
equipment
indicating that more than 80% of
low-paid jobs could face automation7.
Of course, experts have been warning
for years that robots will take our jobs: in
1930, economist John Maynard Keynes
talked of the emergence of a new‘leisure
class’ and predicted that, by 2030, the
working week would have shrunk to just
15 hours as routine tasks were automated8.
But asAndrewHaldane, Chief Economist
at the Bank of England, said in a speech last
year:‘Debates on the relationship between
jobs and technology stirred again during
the 1960s in the US, during the 1970s in
advanced economies, and again in the 1980s
and 1990s in the UK and parts of Europe.
In each case, the prompt was rising rates of
unemployment.And in each case,this debate
subsided as unemployment rates fell.’
However, he did say there were signs
that things could be different this time.
‘Moving into the 21st century, this debate
has once again been re-kindled. The
prompt this time has not so much been
rising rates of unemployment. Rather, it has
been the emergence of smart machines,
jet-propelled by modern computing.These
machines are different. Unlike in the past,
they have the potential to substitute for
human brains as well as hands.’
He points out that unskilled workers
have been the main losers from
technological advances.‘Some displaced
workers have not been on the up escalator.
They appear instead to have “skilled-
down”, typically by taking a job for which
they are over-qualified.They have become
not unemployed but “under-employed”.
Across the EU, rates of under-employment
average around 15%.As in the early 19th
century, by adding to the unskilled pool of
labour, this will have dampened unskilled
wage growth.’
But Diane Coyle, Professor of
Economics at the University of
Manchester, says there is no need to panic.
‘Howworried should we be by the speed
of change? Not as worried as the most
alarmist predictions suggest.’ She points
out that electronics company Foxconn
recently announced plans to install
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