Question

Adam Smith (1723-1790), widely known as the father of modern economics, placed markets at the center of the political economy (i.e., the study of how a country is managed or governed, taking into account both political and economic factors). Drawing on Smith’s 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, construct an detailed viewpoint explaining multiple points that takes Smith’s thoughts and extrapolates them to a current or recent episode in history, OR a current Canadian policy issue.

Essay Question: What would Smith say about the future of automation in the workplace?

Answer 1

New technologies create new jobs types – think web designer or mechatronic. Second, automation creates new industry sectors and these may provide more jobs than are lost in sectors that decline as a result. Ecommerce has created sixteen times more jobs in the UK since 2010 than have been lost in retail, for example. But the most important reason automation has maintained its track record of net job creation over so long is its impact on supply and demand.

As Adam Smith noted, ‘the desire for food is limited in every man, by the narrow capacity of the human stomach, but the desire of the conveniences, and ornaments of building, dress, equipage and household furniture, seems to have no limit or certain boundary’. No boundary except the ability to pay for the desired goods that is. This is where automation comes in, by making goods cheaper to supply. The cost of a television, for example, fell by 98% in the US between 1950 and 2017 and as a result the number of American households owning a television rose from 9% of the population in 1950 to 95% in 1970. This pattern continues across most goods and services until demand is saturated and moves on to new sources of desire. Meanwhile, increased productivity through automation results in wage increases that provide more income to spend on goods and services.

Addressing the skills gap will take concerted effort. Most companies are just starting to adopt new automation technologies and find it difficult to predict their future skills requirements. The technologies themselves are still evolving. Close collaboration between companies and higher education institutes will be required to ensure a supply of skills for which there is current and future demand. Most industrial economies have recognised and are responding to this. For example, the U.S., which has over recent years focused on the value of four-year bachelor degrees, is pivoting back towards apprenticeship schemes, many of them partnerships of multiple companies and higher education institutes around the industries relevant to a particular region.

In the current era, developed countries may be on the verge of a similar transition. Robotics and machine learning have improved productivity and enhanced the economies of many nations. Artificial intelligence (AI) has advanced into finance, transportation, defense, and energy management. The internet of things (IoT) is facilitated by high-speed networks and remote sensors to connect people and businesses. In all of this, there is a possibility of a new era that could improve the lives of many people.

To ensure the competitive edge among companies, business leaders and their subsequent HR professionals must understand how technology will augment daily workplace activities and explore the types of job descriptions that will be created as result.

Some jobs will disappear, there is no doubt, but there is also no doubt that new positions will spring up. Although robots can work 24/7, business leaders are doubtful that robots could be as creative and emotionally intelligent as human beings. Therefore, skills that revolve around social relationships, responsibility, creativity, imagination and leadership will continue to be in the hands of humanbeings, and it is up to the organisational leadership, HR departments and workplace strategist to re-arrange working environments in a way that allows individual employees to bring these unique skill-sets to life side by side with automated technology.

As this shift towards more automation in the workplace continues, the focus in the workplace should shift towards understanding the overall profiles of the existing workforce and developing a clear action plan that can guide reskilling of current employees.

Make no mistake, there is also a role for employees in this process. The employees must stay open-minded to potential benefits of automation, which could present a unique chance to make job roles more interesting, lucrative and fulfilling.