1) Why is there an incentive for rms to automate in a recession

- When revenues fall instead of wages, the cost of each worker rises, and so for a rm, they
become a greater liability, which could be replaced by a machine

2) What does the latest research suggest about this claim?

- Overall, it comes with evidence pointing to there being a declining general interest on
automation

- Even after the pandemic, automatable jobs are as common as expected without the pandemic
in Australia, meaning that despite going through a recession, automation rates haven’t
undergone the expected boost

3) What is the “lump of labour fallacy”?

- That there’s a nite amount of work: this theory believes that due to a preexisting limit to the
amount of work available, automation reduces this amount, and so inevitably leads to human
workers going unemployed

4) What are the other three reasons suggested, explaining why the pandemic may not be having a
big impact on automation?

- Travel limitations

- Automation was already a complicated eld, it was taking a long time to understand how it
worked, this being when people could travel to o ces, see factories etc, and so when
communication could only be done via video-link, developing an understanding of
automation became increasingly harder, making its application further unavailable

- Investment

- Due to most rms avoiding investing when uncertainty is high, such is the current
situation. And so lending standards tightening, and scal spending has been focused on
protecting households and companies, not incentivising investment any further. This has
yielded a situation where investment on automation during the pandemic has actually
been hindered, and so not overly exploited as a new norm, as some people feared.

- Human in uence

- Certain actions require a particular human factor, and so are very hard if not impossible to
be replaced by an automated alternative, and so despite jobs being lost during the
pandemic, some of these can’t be replaced by robots
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