Progress in artificial intelligence (AI) has been phenomenal. Deep learning, in particular, has allowed machines to learn through data and experience rather than on the back of pre-programed models. It is enabling breakthroughs in natural language recognition and computer vision in a wide range of applications. Given these and other advances, futurists, journalists and academics are increasingly asking themselves what roles, if any, will be left for humans. By Lawrence Burns, investment manager at Baillie Gifford.
- Artificial intelligence is changing the outlook for certain professions
- Will people start to resist technical progression?
- Does history provide a guide as to the likely outcome for the jobs market?
According to leading technology innovator Sebastian Thrun, “we are just seeing the tip of the iceberg”. While no doubt a great technical achievement, the recent progress in autonomous vehicles, for example, does beg the question of what will become of taxi drivers, truck drivers and even pilots when it is cheaper, safer and more efficient for computers to undertake these roles. James Anderson, manager of the £4.1 billion Scottish Mortgage Investment Trust at Baillie Gifford, is clear that an effective investment manager should do more than simply move money from place to place. They have a role in helping the best companies grow and endure.
A widely-quoted study by Oxford academics Frey and Osbourne has even claimed that as many as 47% of today’s occupations are at risk of being automated in the next 20 years. Will there be an employment crisis? An explosion of inequality? And, will the upshot of this be a resistance to technological progression and, therefore, the blue sky outcomes we are relying on?
"While no business starts out as definably ‘evil’, they can be pushed into poor behaviour by investors"
Before panicking too much, it’s worth remembering that the fear that machines would make human labour obsolete is as old as machines themselves. As far back as the industrial revolution, Luddites smashed weaving looms, fearful they would take their jobs. And it has been no less emotive throughout the 20th century. In the 1930s, British economist John Maynard Keynes coined the term ‘technological unemployment’, predicting that the working week would shrink to 15 hours as the need for human labour diminished. President John F. Kennedy went as far as declaring in 1962: “I regard it as the major domestic challenge, really, of the ‘60s, to maintain full employment at a time when, automation, of course, is replacing men”.
At the dawn of the computer revolution in 1982, and in the face of mounting historical precedence, the view that the rise in technology would lead to underemployment stubbornly persisted. Nobel Prize-winning economist Wassilly Leontief was adamant: “Past experience cannot serve as a reliable guide for the future of technological change … it is a simple fact that fewer people will be needed”. There are other problems associated with investing in this way, says Anderson. While no business starts out as definably ‘evil’, they can be pushed into poor behaviour by investors: “There is self-justifying behaviour within any company and it interlocks with what happens in fund management firms,” he adds.
Technology and employment present us with a fascinating paradox. While the past few hundred years have seen countless innovations from the spinning jenny to the computer, all of which are demonstrably labour saving, it simply is not the case that huge technological leaps and increases in automation have either rendered human labour obsolete or led to an increase in long-run unemployment. Quite the opposite, in fact. The proportion of the population employed has increased materially and done so in almost every decade for the past 125 years. In the US, for example, 52% of the population was employed in 1890, today the figure is 65%.
This has been an extract of the full article which can be read on the Baillie Gifford website.
Lawrence Burns is investment manager at Baillie Gifford
The views expressed in this article are those of Lawrence Burns and should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect personal opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions. Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford Life Limited is authorised by the Prudential Regulation Authority (PRA) and regulated by the FCA and the PRA. Baillie Gifford & Co Limited is a unit trust management company and the OEICs’ Authorised Corporate Director. Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK. Persons resident or domiciled outwith the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.