NEW YORK— Barclays Bank PLC (“Barclays”) today released the third report of its Impact Series, authored by Barclays’ Research team and supported by the Barclays Social Innovation Facility. Titled Robots at the gate: Humans and technology at work, the report explores the ways technology is fundamentally re-shaping the nature of work, and the implications of this re-shaping process accelerating in coming decades.
“Technological acceleration has sparked both apprehension and intrigue in terms of its impact on the future of work. Much of the impact of technology in an economy depends not just on what is technically feasible, but also on how human attitudes evolve”
The report sets today’s groundbreaking technological advancements in the context of historical precedent, and argues that robotics and Artificial Intelligence do not portend a jobless future, as many fear. However, these new technologies have important macroeconomic consequences, such as wage disinflation, which will likely continue in the years or even decades to come.
“Technological acceleration has sparked both apprehension and intrigue in terms of its impact on the future of work. Much of the impact of technology in an economy depends not just on what is technically feasible, but also on how human attitudes evolve,” said Ajay Rajadhyaksha, Head of Macro Research at Barclays. “The Impact Series report examines the opportunities and challenges technological change creates for the global workforce in respect to available jobs, wages and productivity. Ultimately, society has always found a way to absorb the positive effects of technological change while responding to the challenges such changes pose; that is likely to be true in the future as well.”
Key conclusions of the report include:
- Soft, not hard automation has the biggest impact on workers initially. In the years or even decades after a groundbreaking technology is first introduced, soft automation, where only parts of a job are automated, is more dominant than hard automation, where technology fully substitutes labor.
- New technologies do not necessarily reduce the number of available jobs. Automation often lowers costs to produce goods and services, which in turn increases demand for them, resulting in new job growth. It is also common for technological advancements to create entirely new related industries and professions.
- Technology can and does hold down wages. Wages have been suppressed since the turn of the millennium in every major economy, despite an increase in employment. For the first several years or decades, even the most path-breaking technologies end up automating specific tasks within a job, not the job itself. In doing so, technology frequently ends up lowering the skill-set needed to do a job, in turn expanding the pool of potential workers, which then acts as a drag on wage growth.
- Productivity spurts lag behind technological leaps. It can take years or even decades for an economy to figure out how to best use a new technology. Eventually, economies of scale are reached, consumer behavior adapts, companies refine their business models and productivity growth finally kicks in.
For more information or to view the full report and related articles and infographic, please click here.
About Barclays’ Social Innovation Facility
The Barclays Social Innovation Facility is a catalyst for the development of innovative products and services that deliver both an ongoing commercial return and a sustained social impact. It was launched in 2012 and is a key part of the firm’s Shared Growth Ambition. The Impact Series is designed to explore the social impact of economic, demographic and disruptive changes affecting markets, sectors and society at large.