Giving Compass' Take:

• Robert E. Litan shares the potential of automation to improve society and allow for breakthroughs. 

• How can philanthropy help ease the transition to automation? How can philanthropy help to ensure these benefits come to fruition? 

• Read about the labor-displacing potential of automation.

Like a chess player who doesn’t look past his next move, those who worry that automation will cost jobs tend to focus only on the initial replacement of certain jobs by robots or software in specific firms and industries. They do not count new jobs that will be created in the process, in several ways:

  • Firms engaged in producing, marketing and implementing productivity-enhancing automation will continue to need more software programmers, engineers, psychologists, linguists and others needed for these functions.
  • While firms use automation to replace certain kinds of workers, automation requires other complementary skills, or individuals trained in data visualization, in reasoning and collaborative skills to think “Big,” and how to use automation to design and deliver new products and services.
  • As automation drives down the costs of all kinds of goods and services, people buy more of them, generating more jobs in the process for firms adopting automation.
  • Perhaps most important, the cost savings from automation do not disappear into thin air, but rather get spent on other goods and especially services – health care, education, leisure, travel and entertainment – that will need more people to make and deliver them.

These four effects have worked in combination in the past to ensure that other life-changing technologies (think electricity and computers) for over two centuries in the U.S. and increasingly around the world have continued, in the absence of cyclical downturns, to generate enough jobs to replace those no longer needed.

Read the full article about benefits of automation by Robert E. Litan at Brookings.