AI, automation and the future job market

Artificial intelligence is the theory and development that deals with technologies created by humans and mimic how humans make decisions, react to information, speak, hear, understand language to simulate the human intelligence process such as translation between languages, visual perception, speech recognition, decision making.

Automation is the process of creating and applying technology to reduce or replace human labor. Using machines or computers which are relatively cheap, efficient, reliable, fast and operate automatically without the need to rest instead of humans who perform relatively opposite, especially in the factory setting. Automation can be distinguished into three main parts in production.


Job Loss

It is predicted that 25 percent of US employment which is roughly 36 million jobs in 2016 will be replaced with automation in the coming decades. With even a greater percentage of current jobs being substituted. (Muro and Maxim 2019). It is also estimated that by 2025 around 33 percent of the jobs today are said to be likely replaced by Smart Technology, Artificial Intelligence, Robotics, and Algorithms, known as STARA. Due to the increasing number of robotic capabilities and intelligence, we are expecting robots to outperform humans at many tasks. (Brougham and Haar, 2018)

Artificial intelligence and automation which are sources of technology create winners and losers. Technology is causing concern about job displacement since machines complete tasks by gaining data and identifying statistical data, instead of following human instructions. This has achieved phenomenal execution of a wide range of valuable jobs. (Webb 2019, p.1). The future depends on driverless cars, smartphones, the internet, automation in accounting. The amount of output that technology gives back to a business yet at benefit able costs it is difficult to choose human employees over it on some certain roles. i.e. a machine could work 24 hours a day for 7 days and will not require any allowances or rest. Jobs like accounting are at great risk when coming to this.

Mid-wage and mid-skilled occupations are more structured to physical and cognitive roles which are greatly impacted by automation (Levy 2018, p.10). If artificial intelligence and automation develop in the future people in the mid-wage occupation will become unemployed. This will force them to get into lowest wage jobs and high wage jobs, increase in the number of people in those categories will lead to a large number going for the same job which will also lead to unemployment since a minimum number will be taken for the job.

Some jobs are more affected than others and these are food preparation, transportation, production and administration (Muro and Maxim 2019). Looking at an example the agricultural sector, farmers would previously employ workers who used self-made tools. As a result, they plowed few acres of land which became only for self-consumption. Due to automation, modern farmers buy advanced machines for their farming rather than using self-made tools and human labor, which has led to Production of goods and services at high levels of quality and quantity and produced on time (Ernst and Merola 2019) The advancement and invention of more machines will lead to more unemployment in the 20 years to come.

Figure 1 demonstrate the simulation results of relationship between human demand in occupation and machine productivity. From the figure, for different values of firm-level elasticity of substitution parameter p, the higher the productivity of a machine, the higher the chances of human labour force being replaced by it.

machine productivity against demand for humans


In as much as artificial intelligence and automation are causing job loss, it is also causing employment as the years go there will be an increase in demand for man and machine teams. When artificial intelligence and humans come together to create a team, with human beings having the actual brains and can give judgment, show empathy, etc. and artificial intelligence having speed, accuracy, etc. the future jobs might be spared or even become more. Jobs consist of many tasks and machines substitute tasks not jobs, some tasks are well done by humans while others are done by technology, therefore, human labor cannot be eliminated. (Muro and Maxim 2019)

Machine substitution for labor cuts costs and improves the quality of goods and services. This can also boost demand in these same sectors, this may have no impact on increasing employment in these same sectors, but the productivity gains that come from automation can result in higher wages and better working conditions, which in turn increases consumption and employment in other industries. Most computer applications involve tasks related to programming, data science, and related fields. Computers also need installation and maintenance thus creating employment. (Levy 2018, p.7)

Artificial intelligence is playing a major role in the transportation industry many jobs might be lost but a lot is created. Companies like Uber despite causing unemployment to taxi drivers. It has created employment, Uber had to employ people who manage and maintain their app and also employs people as drivers. According to their website, Uber creates 20000 jobs per month and they come with meaningful compensation for drivers in major urban areas. (Schneider 2015, p.8)

Zion market research estimates that by 2025 the global intelligent assistant market will reach $19.6 billion. This means that a large number of artificial intelligence jobs will be generated. The virtual assistant market has digital assistants which are increasing in number, this assistance includes Google, Siri, etc. and they are getting smarter by the year. These assistants need to be monitored daily to ensure that they become better and thus more IT experts employed.

Potential for automation in various jobs categories

Artificial Intelligence is causing employment in other sectors like Education, Entertainment industry, Gaming industry, Healthcare, etc. the education sector is towards e-learning due to the recent COVID – 19 and probably future problems. Concepts such as smart content need Artificial intelligence and machine learning experts. Health is usually on demand more diseases are coming up and therefore more experts are needed to create employment.

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Artificial intelligence and automation are developing daily we are yet to be surprised and be more interested in the new ideas, innovations, etc. that will be generated. Artificial Intelligence is still in its early stages, but it is very important to know about its various projects and developments. There is more to come from it, and it can make a huge difference in the way we live. Artificial intelligence and automation won’t have a lot of impact on the job market 20 years to come since as it creates job loss new jobs are created, therefore maintaining the balance in the job market.


Brougham, D. and Haar, J., 2018. Smart technology, artificial intelligence, robotics, and algorithms (STARA): Employees’ perceptions of our future workplace. Journal of Management & Organization, 24(2), pp.239-257.

Ernst, E., Merola, R. and Samaan, D., 2019. Economics of artificial intelligence: Implications for the future of work. IZA Journal of Labor Policy, 9(1), pp.1-35.

Levy, F., 2018. Computers and populism: artificial intelligence, jobs, and politics in the near term. Oxford Review of Economic Policy, 34(3), pp.393-417.

Muro, M., Maxim, R. and Whiton, J., 2019. Automation and artificial intelligence: How machines are affecting people and places.

Schneider, A., 2015. Uber takes the passing lane: disruptive competition and Taxi-Livery service regulations. Elements, 11(2).

Webb, M., 2019. The impact of artificial intelligence on the labor market. Available at SSRN 3482150.

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