April 20th 2019

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Articles from this issue:

COVER STORY Budget 2019: The dark side of 'back in the black': no vision

EUTHANASIA FYI: How to navigate the voluntary assisted 'dying' process

CANBERRA OBSERVED Take your tax cuts and be merry, for tomorrow ... is another day

FOREIGN AFFAIRS New Middle East alliance will challenge Saudis

LIFE ISSUES ALP abortion policy blithely tramples all our consciences

SOCIETY AND TECHNOLOGY Will Artificial Intelligence do the walking for you?

LIFE ISSUES Trump, Shorten and Morrison on abortion

GENDER POLITICS Women abused at Women's Day March

NATIONAL AFFAIRS Bill Shorten's bizarre electric car policy

FAMILY AND SOCIETY Revitalising marriage and family: an especially lay apostolate

ASIAN AFFAIRS Entire nations going out without a baby's whimper


MUSIC 1+1=Sublimity: Explanations are like the back side of a tapestry

CINEMA Shazam!: Ambitious teen finds out what's in a name

BOOK REVIEW What will be left us after the deluge?

BOOK REVIEW Author puts some great minds to work



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Will Artificial Intelligence do the walking for you?

by Craig Milne

News Weekly, April 20, 2019

For many people, innovation in the ways of participating in and the organising of productive activity is always seen as a threat to the tenuous equilibrium of their economic lives, and indeed it has been. While inno­vations will always find support from those who can benefit from them, they will usually be resisted by those whose trades and occupations are at risk of being destroyed by them.

At present, a suite of innovations – automation, artificial intelligence, advanced robotics, machine learning and the internet of things – is initiating new disruptions to global systems of production. If the introduction of these innovations goes unopposed, unregula­ted and untaxed, which is the most likely scenario, then their adoption will have a significant effect on the livelihoods and prospects of a very large number of Australians.

Some of these innovations, like automation and robotics, are continuations of technical processes that have been at work for centuries. Others, such as artificial intelligence and machine learning, are new developments and more problematic, not just in terms of their extensive effects on employment, but in terms of the ethical and organisational issues that they raise as well.

A recent report by McKinsey & Company, Australia’s Automation Oppor­tunity, predicts that between 1.8 and 5 million Australians may need to switch occupations by 2030. The report suggests that 25 to 46 per cent of existing workforce activities are amenable to automation; an alarming prospect for those whose livelihoods are at risk.

On the positive side, the report argues that a proactive policy of rapid adoption of automation technologies, supported by business, government and educators, could add trillions of dollars to national income and rectify Australia’s poor productivity and wages growth performance of the last decade.

The tone of the report, no doubt intended as a call to action, probably overstates the extent of the imminent disruption. It is worth bearing in mind that just because an operation can be automated, it doesn’t necessarily follow that it will be. Automation has to make economic sense and there will always be productive activities where the level of automation will be relatively low.

In manufacturing, for example, automation is high in activities such as motor vehicle production but relatively low in agricultural machinery, shipbuilding or aircraft production. This is a function of the nature of the products and the unit volumes involved.

For the production of high-value items built in units, tens or hundreds rather than hundreds of thousands, a high level of automation makes little sense. In such cases, apart from the extensive use of computing in design, analysis, drafting and programming, factories will usually use a few robots and CNC (computer numerical control) machines for loading, material forming and welding, while relying on people to bring everything together. That is unlikely to change much.

In the transportation sector, where autonomous vehicles are supposed to be on the verge of wiping out the livelihoods of truck drivers, the idea that B-doubles will be hurtling along the Hume Highway with no one at the wheel within a decade is fanciful. Autonomous vehicles have their place, but it is in mines and on farms, well away from any potential interaction with people or other machines. Self-driving vehicles require the solution of prodigious technical problems before they can ever be deemed safe for general adoption.

In maintenance occupations, construction and civil works, emergency services, entertainment, aged care, food service and countless other activities, the jobs of people are pretty safe. A diesel fitter may have an on-the-spot software application to diagnose faults, call up a service procedure, a parts book and even order parts online; but, when it comes to changing out the injectors on a stricken Cummins engine in the middle of a paddock, that’s a job for a person, not a robot.

The McKinsey report reiterates the Australian economic reform experience in highly positive terms, suggesting that the new technologies, if quickly adopted, will allow us to continue along the path of beneficial progress and avoid the pitfalls of inaction. This optimistic account of the reform period is certainly the mainstream view, but one that I generally do not share.

In my view, the agents of the Australian economic reform era initiated the most comprehensive dismantling of manufacturing capacity and skill dispersal in the developed world. Far from setting up the nation for a brighter future, the governing class has thrown away the economic ballast needed for a balanced, future-oriented, technically capable, fully employed and fully sovereign industrial nation.

The story of Australian economic reform is not one of wise stewardship and adaptation but rather one of the bungling of the national development project.

The advocates of reform proposed an economy based on mining and services that would leave the nation better placed. While commodities would pay for the imports, the services part was supposed to transcend the difficult fact that a combination of high per capita incomes, a small national market with few opportunities for scale and middling technical capabilities, ruled Australia out of contention as an industrial nation in a borderless world.

The services economy, being mostly sheltered from better and cheaper foreign competition, would provide Australians with a measure of natural protection that manufacturing could not.

Unfortunately, the services-based economy the reformers achieved hasn’t transcended Australia’s difficulties at all. In fact, in the face of the new technologies, services are far more vulnerable to job losses and skill destruction than was the industrial economy that the governing class destroyed.

Automation, artificial intelligence and machine learning have the potential to wipe out large swathes of the services- based economy. The new technologies put entire professions at risk of decimation, particularly in such high-income activities as law, accounting, information technology and medicine.

The disruptive effects of the new technologies are already evident. Australia’s official unemployment rate is somewhere between a third and a quarter of the real figure; a fact reflected by the extent of casualisation, part-time work, the gig economy and the warehousing of the young unemployed in tertiary institutions.

Australians today enter the workforce later, leave it earlier, and suffer greater instabilities on the way through. Great social costs are attached to this precarious situation and unemployment will only get worse under the impact of the new technologies.

One of the basic assumptions economists share is that human wants are without limit. If such is the case, then the displacement of human factors from one activity after another by new technology is of no concern; new opportunities will always be there to exploit. This sanguine view corresponds to the positions of economic liberals, eager to preserve the status quo of current property rights and distribution arrangements.

New technologies are going to test this optimistic assumption severely. New ways of providing people with jobs and income may have to be considered.

Craig Milne is executive director of the Australian Productivity Council.

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