Home / Blog / How are automation and AI going to affect the job market? – II

How are automation and AI going to affect the job market? – II

The three waves of automation identified by PWC will impact differently different areas, as shown in this graph with transport area being more affected than health care. Image credit: PWC

PWC has released a report where it analyses the potential effect of automation on tasks involved in 200,000 jobs in 29 Countries. It makes for an interesting reading. Also, it contains an animated figure allowing you to explore the impact at different time in each of those 29 Countries. I found it very interesting to play with it.

They have identified three waves, one to crest early next decade based on algorithmic approach, the second to hit in the late part of the next decade characterised by augmentation and the third, possibly the most impactful one, deriving from autonomous systems expected in mid-2030s.

Notice that the algorithmic wave is the one fuelled by AI and big data. This is expected to have a small impact on job displacement (a better word, I guess, than job losses), around 3%. This should not be surprising since we have already felt the impact of robots and digitalisation in manufacturing in the last 15 years.

There are significant impact differences depending on the area, as shown in the graph for transportation, financial services and Healthcare (many more sectors are analysed in the report) and on the Country, with losses ranging in the third wave between 20% and 50%.

One of the key point emphasised in the report is the crucial role of education both as scholar education and continuous education.

The impact of the three expected waves of automation on different education levels. Credit: PWC

As shown in the graphic whilst there is not a significant difference in impact in the first wave (although one can see that low education workers are less affected by the first wave, but this is jut because they have ALREADY been affected!) the story is quite different in the third wave with workers have low and medium education expected to be hit harder.

One should also be careful, however, on how to read these graphics. They have been created based on today’s level of education (which won’t be significantly different from the one in the next few years). If one imagine that all of a sudden all people will have high level education we will face a new issue, the problem of making use of that high education in such a big number.

Having said that it is anyhow clear that education will be playing a big role in the coming decades and continuous education, in particular, will be crucial to manage the job displacement.

These aspects are addressed both by EIT Digital in its growing portfolio of Professional School courses and by IEEE Education. More specifically the impact of automation will be addressed in the coming Symbiotic Autonomous Systems Workshop and associated TTM 2018 conference next October 30th, November 1st in San Diego.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the Industry Advisory Board within the Future Directions Committee and co-chairs the Digital Reality Initiative. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.