Rise of the Robots

Time and again, technology has proved to be a disruptor.

With conversations shifting to robots, automation and artificial intelligence, should we worry about jobs disappearing?

Before you say yes, think about how jobs evolved in the past: While you won’t find ‘blacksmith’, ‘weaver’ or ‘chimney sweep’ in the ‘Wanted’ ads anymore, you will find new careers such as app developer, drone operator, sustainability manager, solar engineers, social media manager and wind turbine engineers.

It’s all happened before and it may happen yet again, that technology makes some jobs obsolete and produces new ones. The challenge for societies and companies is to develop skill development institutions and career paths that support workers.

According to experts, artificial intelligence and robotics are upending the traditional workplace and yes, this will cause job losses over the next few decades. Carl Benedikt Frey and Michael Osborne, of the University of Oxford, said in a 2013 paper that automation could make 47 percent of U.S. jobs redundant within 25 years.

But this is hardly the first time technology has replaced manual labor – it’s something that hasn’t stopped happening since the Industrial Revolution started in the 18th century.

For example, it was technology that led to creation of jobs such as switchboard operators, typists and elevator operators, only to have these positions disappear recently. In 2000, more than 130,000 people worked in video stores in the United States.

As Internet entered our homes, video streaming sites such as Netflix and online piracy have made the few remaining video stores a nostalgic curiosity. What happened to all the employees? Monthly job reports provide a clue. In the U.S., there are about 160 million civilian jobs, but about 1.7 million disappear each month because companies go bankrupt, merge or rationalize. Yet, in a good month, there is a net gain of 200,000 jobs. While for individuals, dislocation can be traumatic, video store employees as a group moved on and gained work elsewhere.

Threatened jobs

Frey, speaking at the recent Allianz Future Forum, showed some skepticism that history will repeat itself. His argument is that the changes this time around are too profound. Continuous rapid decline in the cost of computing would make it worthwhile to replace workers, even in markets where wages are low, Frey said. In addition, artificial intelligence would threaten white-collar positions long thought immune to automation because they were cognitively more complex, such as accountancy, legal work, technical writing and insurance underwriting. Now computers would be able to undertake such tasks.

For example, at the Allianz Technology office in Trivandrum, a city on the southern tip of India, bots undertake sophisticated but routine tasks that would once have been done by humans. If an industrial client wants a policy, a bot finds relevant risk data and suggests a premium. More than 100 such bots are already in use throughout Allianz and deliver an efficient service to customers.

But then, worries about “technological unemployment” are also not new. Jack Ma, the founder of Chinese e-tail giant Alibaba, recently said the next 30 years would be “painful” in the number of jobs that automation would take from humans, but he could imagine a future where people worked only for four hours a day and “maybe four days a week.”

Dirk Foerterer, a trends expert at Allianz Germany, is one of those who focus on the possibilities that emerging technologies hold. Not that he glosses over the fact that disruption is coming. “We have to be clear that there will be those who will be left behind,” he says.

“Taxi drivers or truck drivers will yield to driverless cars, checkouts will become cashier-less and factory jobs will continue to make way for automation.” But don’t panic, he says. “We should not ignore those who lose out, society needs to find a way to include them, but stopping innovation would be a fatal mistake. Technical innovation is the key to continuing wealth and prosperity and these will trigger growth.”

In the past two decades, new professions have emerged that never existed and there is growing demand for more traditional occupations, such as therapists, nurses, teachers, firemen, as well as positions that require psychological and social intelligence or creativity.

The number of people working in less complex environments is likely to decrease, while the number working in more non-standard, complex ones is likely to increase. For individual workers, the differentiator will be the ability to adapt skills to the changing needs of the workplace. Lifelong learning will be important to ensure an ongoing presence in the workplace.

Societies and companies will have to develop not only workforce development institutions but also career paths that support workers. We will need people with the skills necessary to undertake more cognitive work. Frey asserts that governments should invest more in retraining and relocation to reduce the impact new technologies are bound to have on sectors ranging from transport to financial services.

Companies, for their part, will need to attract the best talent to fill the positions of the future. Retraining lower-wage staff to fill positions is another approach. This will not only help address the problem, but it will distinguish companies in the market place. In the future, as today, the best people will be attracted to firms that have a reputation for taking care of staff.

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer:


Flavia Genillard
Allianz SE
Phone: +49 89 3800 3142

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