COVID-19: Facing up to the challenges of accelerated automation

Experts have been anticipating a Fourth Industrial Revolution for years. When it comes AI will play a major role in it.

In the long run increased automation will come with huge benefits, but there will also be teething problems, and governments need to prepare for these. Automation does not progress steadily; it comes in bursts. It looks set to accelerate post-COVID-19 as companies take up digital solutions to cut costs and deliver services without human contact.

This will present a challenge for governments around the world. They will need policies which smooth the transition rather than resisting it, ensuring their workforce is ready to take advantage of new opportunities.

Around the world, some countries have embraced the benefits of automation much faster than others. The International Federation of Robotics reports that there are 631 industrial robots per 10,000 employees in the Republic of Korea, compared to just 45 in Thailand and 3 in both India and the Philippines.

But, as a result of COVID-19, this global picture may be about to change. Periods of recession are accompanied by swings towards automation as machines are often cheaper than people. Combine this with a pandemic where workers are forced to stay home, and consumers are keen to avoid human interaction and you have the perfect storm. Adoption of automated solutions involving AI is already accelerating as a result:

These are just a few examples of how COVID-19 has already increased the role of AI in a number of sectors. Once these technologies are implemented, they are unlikely to be rolled back in a hurry, especially if social distancing continues and automation saves costs as recession hits.

All countries will be impacted by automation in the coming years, but we are not all set to reap the benefits equally.

Automation is now also accelerating in the very countries that have been poised for some time to face some of the most significant challenges.

Workforce composition plays a major role in susceptibility to AI-related job-losses. While more workplace activities can be automated in Japan than in India, 55.7% compared to 51.8%, this does not mean the transition will be easier in the latter case. India does not have the rapidly ageing population or shrinking workforce which has smoothed the onset of automation in the likes of South Korea and Japan. Nor does the Philippines where, according to McKinsey Global Institute, around 18.2 million jobs are at risk.

Reports of increased automation and uptake of AI in call centres in the Philippines and in India should therefore be of particular concern. This has come about as a direct result of COVID-19, as AI has kept call centres functioning while workers are sent home.

This does not mean automation has to be disastrous; it may well end up creating more jobs in the long run. But it must be managed. If the pace of automation is now accelerating, policies will be needed to create new jobs and give employees new skills.

Globally, a number of countries have struck out ahead, accompanying high levels of automation with increased employment. In these cases, governments can help to ease this transition:

This pandemic is already accelerating the adoption of AI globally. Countries where AI solutions are being rapidly adopted will need to implement similar schemes to avoid job losses and increased inequality.

While fluent English has long been a key skill for employees at call-centres in the Philippines, AI can easily replicate this. This case shows why huge efforts will be needed to retrain workforces and give them the skills of the future.

The transition to increased AI in the workplace will not be smooth everywhere but governments must play an important role. Different strategies will work in different places, but two elements are key: increased opportunities for retraining at any age and improved welfare schemes for those affected.

Industry is already responding to COVID-19, streamlining their systems and adopting AI. Governments must take this new burst of automation seriously to keep up with these changes and ensure automation has a positive impact.