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PwC predicts three waves of automation by 2030

According to an international analysis of the potential long-term impact of automation released by PricewaterhouseCoopers (PwC),the share of jobs at high potential risk of automation will rise slowly but steadily in the coming decades, reaching as much as 30% by the mid-2030s.

The research - entitled “Will robots really steal our jobs?” - analyzed a data set compiled by the Organisation for Economic Co-operation and Development (OECD) that looks in detail at the tasks involved in the jobs of over 200,000 workers across 29 countries (27 from the OECD, plus Singapore and Russia), a press release sent to the Budapest Business Journal shows.

“Our estimates are based primarily on the technical feasibility of automation, so in practice the actual extent of automation may be less due to a variety of economic, legal, regulatory and organizational constraints,” said Antal Kerekes, technology advisory partner at PwC Hungary, commenting on the findings. “Just because something can be automated in theory does not mean it will be economically or politically viable in practice,” he stressed.

Among the results, PwC identified three waves of automation between now and the mid-2030:

The Algorithm wave is already well underway and involves automating structured data analysis and simple digital tasks, such as credit scoring. This wave of innovation could come to maturity by the early 2020s.

The Augmentation wave is also already underway, but likely to come to full maturity later in the 2020s. The augmentation wave is focused on automation of repeatable tasks and exchanging information, as well as further developments of aerial drones, robots in warehouses and semi-autonomous vehicles.

In the third Autonomy wave, which could come to maturity by the mid-2030s, AI will increasingly be able to analyze data from multiple sources, make decisions and take physical actions with little or no human input. Fully autonomous, driverless vehicles could roll out at scale across the economy in this phase, for example.

Kerekes added that other analyses PwC has carried out suggest that any job losses from automation are likely to be broadly offset in the long run by new jobs created as a result of the larger and wealthier economy made possible by these new technologies.

“We do not believe, contrary to some predictions, that automation will lead to mass technological unemployment by the 2030s any more than it has done in the decades since the digital revolution began,” he observed.

Emphasis on education

In the long run, less well-educated workers could be particularly exposed to automation, emphasizing the importance of increased investment in lifelong learning and retraining, notes PwC.

More highly educated workers will typically have greater potential for adaptability to technological changes, for example in senior managerial roles that will still be needed to apply human judgement, as well as to design and supervise AI-based systems. Such workers should see their wages increase due to the productivity gains that these new technologies should bring, the analysis adds.

Differences are less marked by age group, although some older workers could find it relatively harder to adapt and retrain than their younger cohorts. This may apply particularly to less well-educated men as we move into the third wave of autonomous automation in areas like driverless cars and other manual labor, which has a relatively high proportion of male workers at present. At the same time, the report adds, female workers could be relatively harder hit in early waves of automation that apply, for example, to clerical roles.

“Our research shows that the impact from automation and AI will be felt in waves, with more routine and data-driven tasks such as those performed in the financial services hit first, while tasks involving physical action such as transport jobs are more vulnerable to automation in the longer term,” said Gábor Riba, senior manager at PwC Hungary. “But just because businesses and people aren’t feeling the impacts right now, there is no excuse for not starting to plan for the future,” he cautioned.