Bill Jamieson: Robots can save us, once we fix the broadband

Gains in productivity from robots and artificial intelligence will boost the economy.

Both make an earnest claim to truth. But among many a weary scepticism will have crept in. How ironic that an effort to measure the impact of AI and robotics should coincide with a reminder of the hassles millions face with the information technology already up though not always running. And in too many areas of rural Scotland customers are struggling to get a broadband connection at all.

Ofcom says that under its proposals, customers would no longer have to “fight tooth and nail” to get “fair compensation”.

“Up to” 2.6 million customers could benefit and payments would apply whenever services go wrong and are not fixed quickly enough.

Excellent news – I must attach this news clip to my internet server, together with a little drawing of a pig with a pair of wings.

My reaction to the PwC report is also tinged with scepticism. I don’t doubt that we are in the throes of a robotics revolution. The vogue shorthand phrase is “Industry 4.0” – the huge advance in automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of Things and cloud computing.

According to PwC, manufacturing and retail are among the most at risk from the new technologies. It estimates that 30 per cent of existing jobs in the UK are potentially at a high risk of automation.

PwC chief economist John Hawksworth says “more manual, routine jobs”, which can effectively be programmed, are the most at risk. “Jobs where you’ve got more of a human touch, like health and education,” would be safer.

The report, understandably, has sent a frisson across the admin and support sector and also IT back-up operations. I have no doubt that we are in the throes of a great convulsion – a process that the economist Joseph Schumpeter famously described as “creative destruction”. But are all its effects as negative as some of the more lurid coverage suggests?

As the PwC report itself points out, the nature of some occupations would change rather than disappear. And it added that automation could create more wealth and additional jobs elsewhere in the economy.

This is not always obvious. I vividly remember, on a business trip to the US in the early 1990s, returning with a deeply alarming series of articles from the New York Times. These warned of an imminent destruction of millions of white collar, administrative jobs as the information technology revolution catapulted the economy into the world of the paperless office.

The great crisis that America faced, it predicted, was the onset of mass middle class unemployment and a “crisis of leisure”. What on earth would the country do with all this new-found leisure time? It was so portentously written I was convinced a similar crisis would unfold here.

As matters turned out, there was a recession – though not one caused by the onset of information technology. And predictions of “the paperless office” were the theme of jokes for many years.

Meanwhile, for every job lost in “the back office” at least as many more were created. Employment in America expanded consistently during the 1990s, but has been inconsistent since due to recessions in 2001 and 2007-2009. However, the latest figures show that the US added 227,000 new jobs in January, marking the 76th consecutive month of job gains, the best on record. And the unemployment rate, at 4.8 per cent, is in line with the Federal Reserve’s estimate for a normal job market.

Unemployment, of course, reflects many variables including fiscal policy, central bank interest rates, the level of the currency, inflation and the strength of demand across the global economy, as well as the advance of robotics. Yet over the past 20 years there has been a massive advance in information technology which has worked to change many occupations – and create tens of thousands of jobs.

Here in the UK the jobless rate has fallen to 4.7 per cent – the lowest since mid-2005. And the employment rate remained at an all-time high of 74.6 per cent as the number of people in work rose while wage growth slowed. Unemployment in Scotland has fallen to 129,000, with the rate also down to 4.7 per cent.

Since the industrial revolution, the onset of mechanisation and more efficient ways of production have disrupted the social and economic terrain of Britain. But they also have brought a myriad of different forms and types of employment together with a transformation in lifestyles and living standards.

Home robotics offer the prospect of more members of the household being able to go out to work. And the more technology-driven and efficient our manufacturing base becomes, the less the incentive on labour cost saving grounds for companies to move plant and production to the Far East.

As Hawksworth reminds us, gains in productivity from robots and artificial intelligence will boost the economy. “It’s going to boost productivity, a big problem for the UK recently, and increase incomes… which will increase demand for human jobs in other areas.” Outsourcing more repetitive tasks to robots could free up people to do more valuable work.

Much critically depends on schools and colleges preparing people for an increasingly automated world. But there is nothing more adaptive and resourceful than people – so long as we are prepared for change and free to innovate and invest. Whether out of a hunger for the new, or the need to manufacture more efficiently, the market of many millions will find new ways of working. AI need not spell Armageddon for the labour market.

But the scale and pace of all this, of course, is conditional, not only on big changes in education, but also on our ability to operate and install AI to optimal effect. For a nation struggling to secure a speedy internet connection – or crack the mysteries of Microsoft Windows 10 – the pace of change can’t always be described as breakneck.