The Covid-19 pandemic has accelerated the adoption of cutting-edge technologies. From contactless cashiers to welding drones to “chow bots” — machines that serve up salads on demand — automation is fundamentally transforming, rather than merely touching, every aspect of daily life. This prospect may well please consumers. Forsaking human folly for algorithmic (and mechanistic) perfection means better, cheaper, and faster service.
Automation Doesn’t Just Create or Destroy Jobs — It Transforms Them
Three questions firms should ask themselves when deciding whether to automate.
November 02, 2021
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Summary.
Automation is everywhere these days. While economists often consider the effects of automation in terms of whether it creates or destroys jobs, less attention is paid to how it changes jobs and the wages paid to the workers that perform them. While there are cases where automation can create higher-paying jobs, more often it drives wages down. For companies considering automation, this can seem like a boon, as cost savings on labor can increase margins. But, there are also potential downsides, as companies may find themselves in trouble when automated systems falter. Firms should ask themselves three questions when deciding to automate: 1) What are the limits of the technology? 2) How do those limits impact the operation? 3) How does the cost of overseeing technology affect its value proposition?