About one in two jobs will disappear in the next few years because of artificial intelligence and automation. That's how Joe Davis, global chief economist at Vanguard, opened his keynote at Morningstar's ETF conference last week in Chicago. It sounds dire, but unpacking the economist's perspective, there's nuance in the coming jobpocalypse.
1. To some extent, artificial intelligence is already replacing some jobs, and you're mostly loving it. If you live in a city, automation is trying to bring you on-demand everything, from take-out to taxis. Meanwhile many of these on-demand services are also providing interesting income options in the on-demand work economy that the traditional economy never could. Need to work mornings? No problem. Want to stay close to home? Your call. This kind of increasing flexibility is the promise of the on-demand economy. Most people who've experienced it would never give it up.
2. Artificial intelligence job supplementation is good for aging populations. Davis pointed out the trend is that many countries with older populations are also the wealthiest. That wealth can be spent using technology to assist the aging process. As reported in Investment News, he said, "If population growth and demographics were all that mattered, China and India would be the wealthiest and most productive nations in the world," he pointed out.
3. Artificial intelligence replacing the mundane aspects of some jobs is creating interesting work (hopefully). Davis illustrated his point with the example of a doctor's job. In the 1800s, doctors had access to only a bag of tools--literally--and worked as a dentist, a bone setter, and a pharmacist with primitive resources. The role of the doctor was also limited mostly to white males from well-to-do-backgrounds.Today, doctors come from all walks of life and gender and are highly specialized. Technology has revolutionized the "doctor job." Now, there are more ways to practice medicine than ever. Bleeding with leeches or other common practices of a couple centuries ago are obsolete. "Many jobs have multiple tasks, and the tasks within any occupation changes over time," he said. "Most studies assume that technology only threatens jobs, and doesn't complement them."
His perspective is that we'll create new kinds of work--many unimaginable now--to unleash human creativity. One thing he's certain that should change, though, is using GDP, or gross domestic product, as the top predictor of an economy's health. In labor and industrial ages, human productivity was directly related to real output. It worked then. Today, automation and artificial intelligence are creating a situation where a lot of valuable work is inherently digital, like you see in fintech with digital currencies, AR, VR, games, entertainment and artificial intelligence. In the future, economists like Davis expect governments will start re-interpreting GDP to give them a better indicator of the overall economic well being of their nation.