Leadership CONNECT: 10-OCT-2024 (Y24W42)

The recent (October 2024) strike by U.S. seaport dockworkers once again highlighted the feared impact of AI and digital technologies on employment. In addition to demanding higher wages, the union called for limits on automation, citing that it “kills jobs.”

The International Longshoremen’s Association (ILA), representing 45,000 port workers, had been negotiating a new six-year contract with the United States Maritime Alliance (USMX).

The union sees that while value and profit are being created for shippers and port owners, the increased automation could reduce the workforce by 50% or more. As one protest sign read: “Automation hurts families: ILA stands for job protection.”

Some of the top seaports utilizing automation—including Rotterdam (Netherlands), Shanghai (China), Singapore, and Los Angeles (USA)—already demonstrate significant cost savings, increased safety, improved energy efficiency, and the capability to operate 24/7. The trend toward automation is evident and growing.

Historically, technology has often been blamed for displacing jobs, dating back to the days of the Luddites. However, in most instances, technology has ultimately created more jobs—though often different kinds of jobs. For example, about 200 years ago, around 1820, 70-80% of the workforce in the United States was employed in agriculture. Today, that number is less than 2%, thanks to industrialization, technological advancements, and the emergence of other sectors such as manufacturing and services.

While some jobs are destroyed, others are being created. This has been the nature of workforce mobilization, resulting in a U.S. unemployment rate of 4.1% in September 2024. Globally, many countries are experiencing similar dynamics, with automation reshaping industries and causing both job losses and the emergence of new opportunities.

Will this trend continue? Let’s explore what is happening in the transportation industry:

Before AI — In most places, services like Uber, Lyft, and Gett disrupted traditional taxi jobs (both drivers and dispatchers) and enabled many non-professionals to make a living. Digitization of navigation and ride-hailing changed the industry. For example, you no longer had to work full days to recoup initial costs; driving became a second or part-time job.

After AI — Companies like Waymo and Cruise (and Tesla with its RoboTaxies) have demonstrated the feasibility of self-driving cars. They have made significant strides in autonomous vehicle technology towards fully autonomous driving. For now, these services are still small, they have created many development and supervision jobs while destroying relatively few traditional jobs.

AI, with its capability to work alongside humans (such as the new “canvas” from OpenAI, used to write this post), is not merely digitizing existing processes—it is transforming them entirely. What will AI do to jobs?

Broadly speaking, and let me speculate here, today in the U.S., there are approximately 1.5 to 2 million people driving both traditional taxis and Uber-like services. In ten years, with the rise of autonomous vehicles and shifts in mobility trends, this number could decrease to around 500,000 to 1 million, as self-driving technology gradually reduces the demand for human drivers. A gain of, say, 10,000 employees in managing the above transformation is meaningless.

In conclusion, we may be approaching what could be described as a “digital Malthusian trap,” where digital advancements lead to a net loss in employment. This is due to the rapid pace of development driven by AI. The results: digital/ai markets are evolving much faster than the rate at which human workers can adapt and transition.

Read more about this topic:

• Not everyone is embracing this future. Some people have even resorted to attacking Waymo cars (Source: Facebook video)
• MIT Technology Review on Robotaxis (Source: MIT Technology Review)
• Will Tesla Robotaxis Live Up To 10 Years Of Development And Hype? (Source: CNBC)
• More resources on the future of work (Source: DigitalRosh)