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Updated essay on
Is Artificial Intelligence (AI) and Robotics going to
push the world into another economic recession by
way of replacing human jobs?
Mushtaq Ahmad Mahindro
Outline:
1. The AI scenario
2. Will the robots will be replacing human beings and putting them out of jobs? To what
extent the industrialization in the past has been successful in garbing jobs from the human
beings? Whether the onslaught of second machine age/digital age will be abrupt or gradual?
- The historic context.
3. Who will be the champion in the production of robots?
4. To what extent robots would be making up the deficiency of decreased young working
force in the rich economies?
5. The division of labor intensive industries/countries and automation intensive
industries/countries.
6. Opening up of new jobs in the field of designing, developing and marketing of robotic
engineering (High skilled innovative jobs). The future educational fields are going to be
IT, and STEM (Science, Technology, Engineering, Mathematics).
7. History establishes one fact that human mind which creates the problems for itself also can
fix them.
8. Who is going to benefit from the new AI age and to what extent?
9. What kinds of jobs will be affected more and to what extent, and the expected increase in
the AI related jobs?
10. The most significant industry using industrial robots is going to be the automotive industry.
11. The world Development report 2019 on future human jobs and the demand on requisite
skills.
12. AI age as an opportunity or threat?
13. Conclusion

Thesis Statement: The Artificial Intelligence (AI) and Robotics are no doubt replacing the human
jobs but in no way going to usher the world into any economic recession. As a matter of fact
demand of new jobs relating to designing, developing, production, and maintenance of AI
machines will be generated.
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1. It is widely believed that by the year 2030 Artificial Intelligence (AI)/robots

emotionally intelligent agents capable of doing complex tasks intimately familiar with
human moods will be replacing the human beings not only in most of the industrial
setups but day to day tasks as well. Our almost all home and vehicle devices will get
equipped with emotion chips that will sense our feelings and preferences via our
voices, tones, and gestures. Robots will be everywhere addressing our empathetic
needs even. That would be an Artificial Emotionally Intelligent (AEI) world.
2. The question is, will it be replacing human beings and putting them out of jobs as some
economists believe? The answer may be lying in the question - Is the phenomenon of
grabbing jobs, from the human beings by the technology, being witnessed for the first
time? People say no doubt this is not an unusual occurrence but the speed with which
it is going to happen has never been there in the past. Isn’t a reality that man’s ability
to fix the problems created by it has also been multiplied? Whatever the technological
speed we are moving with is it possible that one fine morning we find robots swarming
like anything in our streets and industrial setups? The reality is that this is a gradual
process, and the process is already on, and the speed will be in accordance with the
human digestibility. We are passing through this phenomenon since the dawn of
industrial revolution that is mid-eighteenth century onward. There have been
continuous pressures on the human workforce in favor of more skilled and technical
jobs and educational domains accordingly. The only difference in this second machine
age (the digital age) is that the process of transformation has just speeded up,
consequently the human capacity to deal with the challenge. No doubt the smart
machines, new technologies dipped in the Artificial Intelligence overtaken by the
highly globalized interactive and interdependent business environment are compelling
the entrepreneurs to reset and adjust their human workforce jobs and skills. But these
are not only the challenges but opportunities for the entrepreneurs as well as these are
going to reduce their expense, finally improving the quality of the life of the people.
Some economists take this challenge as a disruptive force concerning the economic
security of the people. When we look at European industrial revolution, which started
in the late 18th century with the invention of steam engine, we find that it did replace
many human jobs but without any abrupt loss of jobs leading to any severe economic
recession. Instead it uplifted the quality of the peoples’ life. As regards the
apprehension that the previous industrial revolution was slow, and the looming digital
one based on AI would be faster than that, hence, would be telling upon human jobs
very negatively, it is very difficult rather impossible to replace all human beings with
robots in any industrial setup so abruptly. The process would be a gradual one which
has already started. As previously discussed robots, of course, are to be conceived,
designed and manufactured by engaging the highly skilled human force giving rise to
altogether substantial new industrial setups as happened in case of the computers
replacing the manual typewriters and industries related to their manufacturing in the
1980s. Before the birth of Microsoft and its ecosystem in the 1980s, nobody could
even imagine the creation of more than 15 million jobs in the IT sector. For instance,
Facebook created more than 5 million, Amazon more than half a million, and likewise
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Apple and Google. The manufacture of hardware and jobs associated with it are also
there. Computerization of service sectors which started in the 1980s is yet to be
introduced and completed in many developing countries accordingly the demand for
computers. The fate of the new automated, digitized age would not be different than
that of the soft world and hard accessories and creative sectors associated with it as
many dramatic technological breakthroughs are going to happen. Robotics and AI is
just the continuation of the same in a sense. No doubt a robot has been placed in a
company’s board of directors but see how many people have been engaged right from
conceiving the robot idea, putting the relevant intelligence in it, designing and
manufacturing the same. Hence in this AI driven age income and employment
opportunities are not going to squeeze but are going to change its course only. Manual
typewriters, data registers in banks and all other commercial organizations, and
extensive use of paper was the only mode of transaction and communication between
individuals and organizations just thirty years ago and is still in many developing
countries. Computers have dispensed with all this without bringing any job squeezing
effect, instead becoming a vital source of employment in the computer hardware and
software industry.
3. The question is who will be the global leader in the face of these challenges? The
answer is the one that will show the maximum ability to adapt and adjust more speedily
in this fast approaching ‘IT programmed automation’ age. The challenge would be of
linking education with the emerging demands on AI-related mechanics and jobs. This
challenge will be more pronounced with the USA and China, the leading growth
engines in the world. It is estimated that by 2020 China, USA, Germany, South Korea,
and Japan will be purchasing 80% of world robots. Industrial robots are already in use
in the export-driven economies of South Korea, Japan, Germany and China, being
cheaper, and more reliable.
4. China’s working-age population has also decreased on account of the transformation
of its population from poor to middle class, and increase in aged people due to one
child policy of the past. This has led to an increase in wages pushing the economy
towards robot driven one. But the automation process will not be that much fast in
China, as it was in Germany, Japan, and Sweden, on account of its around 40% cheap
labor still available in the countryside. This all is not only adding to the import of
robots but pushing this country to manufacture its robots thus becoming a source of
creation of new jobs in China as well, and these robots will be cheaper than produced
in Germany and Japan. China does not appear to be oblivious of dominating the highly
important emerging market of Artificially Intelligent driverless vehicles and digitally
connected appliances. The chances of China to be the future topmost producer in
Robotics are brighter than the current champions like Japan, South Korea, Germany,
and the USA. For the reason that it has a lot of money, increasing domestic industrial
demand for automation, and Chinese government policy of encouraging robot
manufacturers and companies via subsidies, low-interest loans, tax waving and rent-
free lands. Industrial automation is being considered crucial in China on account of its
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aging population and shrinking workforce, also for the reason that it is a way to
produce competitive products.
5. China started producing robots in 2013. Before that, the robots were manufactured
only by the foreign manufacturers. Total production by both Chinese companies and
the foreign ones in 2016 were around 70,000 units, almost 1/3rd of which were
produced by Chinese companies. It means the creation of jobs and challenges to jobs
are going on simultaneously. The difference lies in categories only. The labor-
intensive industries will be moving toward those emerging economies where the wages
are low on account of still high working-age population that are slow in automation
like India and ASEAN.
6. There exists an intense apprehension of early dawn of an economic recession on
account of this AI revolution, which will be in the form of “self-driving cars to next-
generation robots & 3d printing. According to them the speed with which drones, AI,
and the robot-driven industrial revolution is taking place will not be matching the
pace of creation of new jobs; hence a severe joblessness issue particularly in the
developed economies. But isn’t it a reality that this advancing extremely
digitized machine age will simultaneously be creating new jobs dealing with
conceiving, designing, manufacturing, marketing and maintaining the AI
machines? The only change that could be there would be the demand of human
resource skilled and educated in the STEM and IT, hence giving way to the
dawn of an ‘IT programmed Automation’ age.
7. History establishes one fact that human mind which creates the problems for itself also
can fix them. Humans who are creating AI also can fix the issues arising out of the
same for its survival. There is no denying the fact that the jobs created by mobile/cell
phone and internet companies, related to its research/design/development/marketing,
are far higher than those replaced in the domain of landline telephone, and
photographic cameras made by Kodak and Yoshika like companies in the past.
Innovation is the unbeatable reality of the world as it creates value for the consumers
improving the quality of life of the people. All living, vibrant, forward-looking
organizations and companies have always remained poised and cognizant of this fact,
and thus keep on adding value to their products and services. During this process, some
machines become obsolete likewise the old skills paving the way for the new ones to
come in. Therefore economists have aptly coined the term of ‘creative destruction’ for
this process. The only change will be high demand for highly educated people with
cognitive tasks in focus engaged in developing software technologies, and related
capital replacing the human muscle.
8. However, again the demands and dictates of the new AI age seem to be so fast and
expanding, there exists every possibility that Americans might not be in a position to
meet up the demands as happened in case of the software world. In this situation,
America once again appears to rely on brain hunt via H1B visa or rely on China to
assume the responsibility being the most likelihood. For instance over $12.5 billion in
funding flowed into AI startups in 2017. Out of this, around 50% was received by
Chinese startups as per new CB insights report on “The state of Artificial Intelligence.”
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For the jobless people if it happens, as believed by 50% of economists, America would
have to introduce some subsistence social welfare schemes to help the unemployed
during recession phase which generally precedes the transformation phase from low
tech to high tech. But I feel this will be a short-lived period and will not be a cause of
any drastic impact on the American economy. This will be dealt with by the speedy
adjustment ability of the present day highly globalized, collaborative and
interdependent business and investment world where the principle of demand and
supply immediately comes into force to stabilize the destabilized market environment.
To the question that as the technology moves forward concerning AI will the people
still do better than computers? No doubt computers will be driving cars better than
humans, but after all, they will be programmed by the humans. That is the point where
we see that the shift of the jobs will be from drivers to programmers, hardware
engineers, manufacturers, and marketers, hence the change in the skills. However, the
abilities that were considered essential in the past will no more be in demand in the
days to come. I don’t believe that a knowledge-based economy is the feature of the
twentieth century. It was there since the inception of mankind. Man’s progress and
upward development have always been knowledge-based, based on innovative and
creative mechanism inbuilt in the human mind.
9. It is estimated that Human Level Machine Intelligence will be 50% by the year 2040,
and 90% by the year 2070, and at that time humans will be busy in developing such
machines, marketing and maintaining them. The overall effect will be the increased
production of man serving devices adding quality to the human life in the form of
comforts and luxuries. Figuring out the impact on jobs little bit in more detail, it has
been observed that around 800 million people are going to lose jobs by 2030 by robotic
automation as reported by McKinney Global Institute. That is one-fifth of the world
workforce and includes one third in the developed nations like the US, Germany, and
UK. Whereas developing countries will be less affected as they do not have much
money to buy automation. Machine operators and food workers will be hit harder
generally related to manufacturing and transportation sectors. Whereas doctors,
teachers, and lawyers involving more human interaction will be less affected.
Likewise, jobs related to gardening, plumbing, nursing requiring human care will also
be less affected. In the U.S. alone around 50 million jobs may be eliminated by 2030,
but about 20 million jobs eliminated will be transferred to other industries. The report
also believes that the transition would be of the same scale as it was in the early 1900s
when the global economy overwhelmingly switched from agriculture to industry.
To dispel the myth of loss of jobs due to AI-related automation research firm Gartner
says “by 2020, AI will generate 2.3 million jobs, exceeding the 1.8 million that it will
remove”. And during the next five years to 2025, the new jobs created concerning AI
will reach 2 million. The jobs eliminated will belong to middle and low-level positions
and the newly created jobs will belong to highly skilled robot engineering (including
software engineering – designing to manufacturing) and management positions
including the robot advisors, and posts related to STEM education in the universities,
and cognition and creativity. Hence, in 2020 AI will be a net job motivator.
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Worldwide annual supply of robots during 2000 was 99,000, which rose to 294,300 in
the year 2016. And China is the largest industrial robot market, with 87,000 units sold
in 2016. Consultants Deloitte argue that ‘While technology has potentially contributed
to the loss of over 800,000 lower-skilled jobs (in the UK) there is equally strong
evidence to suggest that it has helped to create nearly 3.5 million new higher-skilled
ones in their place.’ (Deloitte LLP 2015). As a matter of fact, the countries with the
highest robot density, notably Germany and Korea, have among the lowest
unemployment rates. In aggregate, it is widely believed that robotic automation has a
positive impact on employment and wages.
10. The most significant industry using industrial robots is an automotive industry with
35% market share. The second is the electrical/electronics industry with 31%, metal
and machinery industry with 8%, rubber and plastics industry with 5%, food industry
with 3%. As regards, the increasing wage inequality in the years to come, that cannot
be attributed solely to automation.
11. With regard to the fear that robots will take away the future human jobs the world
Development report 2019 states that ‘on balance this appears to be unfounded’, as
work is constantly reshaped by technological advancement. Firms keep on evolving
new means of production and technological adjustments in view of the fast changing
requirements of the business world. Overall, technology is bringing new opportunities,
new jobs and increased productivity ultimately adding to the quality of the life of the
people. However, workers need to be better skilled to solve the complex problems of
the time. Hence, investment in the human capital as a continuous process to build its
capacity in line with the changing market demands must be the focus of the
governments and the entrepreneurs. Technology is just changing the demands of the
skills. Under the circumstances what the governments should do? Governments should
invest in human capital development especially in disadvantaged groups and even at
early childhood education programs to develop the new skills that are increasingly in
demand in the labor market such as high order cognitive and socio-behavioral skills.
On the technology side these are relating to STEM (Science, technology, Engineering,
Mathematics), IT, and developing the ability to work in a multi-cultural and multi-
religious business environment.
12. Advancing ten years will witness substantial tectonic forces of globalization China
playing a dominant role in that, and astonishing technological progress mainly to be
contributed by USA, Germany, Japan, France, and China. These advanced countries
will not be needing immigrants in the numbers they required in the late 20th century.
As regards the main commercial hub of robotics and industrial output it appears to be
the China, India and ASEAN and East Asia. Among the advanced world, Australia
and Canada would do better on account of its capacity to assimilate immigrants due to
their sizeable accommodating space. China, in the beginning, will be the largest
purchaser of robotic equipment and subsequently will become the largest manufacturer
and exporter. With technology and speed racing ahead what we need to do is to invest
in innovative automation. Incoming technology will act as a facilitator of not only of
new ideas but new employment opportunities as well. We will indeed be employing
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fewer people in the existing model but will also be opening new domains of
engagement that will be in the robotics and AI world conceiving still higher and higher
models.
13. It is therefore quite clear that AI and robot automation is going to improve both the
productivity and quality, increased competitiveness, and also remuneration of the
workforce. Additionally, robots are going to decrease the expenses of the
entrepreneurs as human beings are more expensive to hire and retain. Hence the robotic
culture is going to introduce the culture of affordability adding to the quality of life of
the people. The humans spared will be engaged in the designing, developing, and
production of the robots. That is a highly skilled job requiring expertise in STEM
domain. Therefore, Governments and firms must work to create an environment that
will enable workers, companies, and nations to reap the rewards of these future
developments. This means investing more in research and development in robotics
and, imparting requisite education and skills, and training to both the existing and
future workforce.
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