Effect of AI and automation underestimated, economists say

According to a post published on the Bank of England’s staff blog on Wednesday, economists may have underestimated the impact on labour markets of increasing automation and the rise of artificial intelligence.

“The potential for simultaneous and rapid disruption, coupled with the breadth of human functions that AI might replicate, may have profound implications for labor markets,” BOE regional agents Mauricio Armellini and Tim Pike wrote in the Bank Underground post.

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The post also informs that; “Economists should seriously consider the possibility that millions of people may be at risk of unemployment, should these technologies be widely adopted.”

Robots and intelligent machines threaten to replace workers in industries from finance to retail to haulage, with BOE Chief Economist Andrew Haldane estimating in 2015 that 15 million British jobs and 80 million in the U.S. could be lost to automation.

Past periods of technological upheaval, such as the industrial revolution, may not be a useful guide as the pace of change was slower, giving society longer to mitigate the potential consequences of increasing job displacement and inequality, according to Armellini and Pike.

 

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