Chief economist says automating routine tasks will help in tight labor market
NEW YORK—Hal Varian, chief economist at Alphabet Inc.-owned Google, is optimistic about the overall impact of automation on the world-wide economy.
Automating routine, predictable tasks will help mitigate the effects of a tight labor market over the next decade, said Dr. Varian, speaking at a recent symposium on behavioral analytics and big data hosted by the Council on Foreign Relations.
“Automation, in my view, is coming along just in time to address this coming period of labor shortages,” he said.
Free tutorial videos on platforms like Google-owned You- Tube will also mitigate negative effects of the tight labor market, he said. Every day, there are hundreds of millions of views of how-to videos on the platform, ranging from how to solve quadratic equations to how to weld, he said.
“We never had a technology before that could educate such a broad group of people any time on an as-needed basis for free,” he said.
It is difficult to predict how fast technology will advance over the next 20 years, he said, but it is certain that the so-called baby boomer generation is retiring. Born between 1946 and 1964, the baby boomers will continue to consume goods and services after they stop working.
“They're not going to be sources of growth in the labor forces anymore,” he said. The labor force in the U.S. is now growing at half the rate of population growth, which means automation will be necessary to help bridge the gap between the supply of workers and demand for goods, Dr. Varian said.
“If you want to see what the future looks like in an extreme case, go to Japan, where there are vending machines that are providing so many things because of the shortage of labor,” he said.
Automation is gaining a foothold in the enterprise. Software robots at AT&T Inc., for example, have taken over routine, repetitive tasks for human employees in areas ranging from customer service to finance. At Walmart Inc., about 500 software robots have been deployed throughout the company to help workers.
There are conflicting reports on how automation will ultimately impact the workforce. Analysts at Forrester Research Inc. predict that over the next five years, about four million jobs will be lost in the U.S. as a result of artificial intelligence and related technology, including software robots.
Gartner Inc. has said that artificial intelligence will create 2.3 million jobs in 2020, while eliminating 1.8 million. Dr. Varian said artificial intelligence and machine learning won't be as disruptive as people think, despite tremendous breakthroughs in the technology over the past few years.
Jobs where one person is doing the same, routine task over and over again, in an automobile- manufacturing assembly line, for example, will be the first to be automated, he said. “If you look at environments that don't have those characteristics, then the possibilities of automation become much more problematic,” he said.
But jobs with many tasks that are highly varied, such as gardeners and hotel maids, are harder to automate because of all the variables involved, he said. That is why self-driving cars will first be tested in the most “homogenous” environments, he said.
Still, Dr. Varian cautions that it is hard to predict the future when it comes to technology. “The line in Silicon Valley is, ‘We always overestimate the amount of change that can occur in a year and we underestimate what can occur in a decade,'“ he said. “So I think that's a very good principle to keep in mind.”
BY SARA CASTELLANOS