Advancement of technology like robotics, artificial intelligence, machine learning and other automation techniques have no doubt created a revolution in the way business is conducted.
Machines outperform and exceed the human performances in the work activities especially the repetitive tasks.
Now, automation technologies along with new and improved algorithms have gathered the knowledge of decision-making processes and works like a human being to a certain level.
There are some factors that define the impact of the automation in the global economy in 2018 and further.
- Automation technologies can reduce the human errors and improve the quality of work by providing speed and perfection. The result of the implementation of the automation techniques offers outcomes and performance that human beings can never achieve. The productivity of the businesses gets improved by the reduction of human efforts in monotonous activities. The increased productivity and reduces human efforts imparts a great impact on the prosperity and growth of the businesses. According to McKinsey Learning reports, automation may rise 0.8 to 1.4 percent annually.
- The job market is the most impacted one when we talk about global revenue. The work of nearly half of the occupations can be automated by the currently available automation technologies. This will have a great impact on the way we look at any profession. It may increase or reduce the jobs in the market than that of today.
- Automation techniques and analysis involve physical activities as well as huge data collection to make the outcomes effective. The specific areas where IoT implementation is not possible, the data collection involves different other techniques. These activities increase the chance of creating jobs to a certain extent along with the use of automation in businesses.
- Automation involves economic, technical and social factors that determine the pace of the economic growth of different industries. The progress of the technology innovation in the areas such as Natural Language Processing are the factors that are driving the pace of revenue growth. However, the cost of implementation of these technologies, which include labour cost and skills, the performance of the systems and social or legal regulations will necessarily affect the technological and economic growth.
- Not necessarily automaton will replace human beings. People will find another type of jobs or employment and gain skills with the help of these technologies only.
Impact of automation and emerging technologies on global GDP
According to some researchers, productivity will rise as a result of the implementation of automation worldwide. However, at the same time, the cost of the emerging technologies is going higher each passing year.
ImageSource: https://www.statista.com/statistics/740422/worldwide-robotic-process-automation-artificial-intelligence-market/
From the above graph, we can see the rise in expenditure in implementations of automation technologies like Artificial Intelligence is on the rise.
A study by Chicago Booth business school, the rise of technology automation through information technology investments will have a greater impact on the wages and jobs globally.
The corporate revenues have risen at a sharp pace during the last decade, and it continues to do so in the coming years as well. This rise in revenues especially in the corporates can be attributed to the investments in automation techniques.
The migration and the globalization of the jobs and the investments in automation has contributed to the rise in profits in corporations versus the GDP.
Automation will not be achieved and not gonna be impact world economy overnight. There are some factors that affect the extent of the automation implementation.
- Technical feasibility is the first among those factors affecting the adoption of automation. Technologies have to implemented, tested full scale and integration scopes in current scenarios have to be identified to take the full advantage of automation.
- The second factor is the costing that is involved through the processes. The development of new skills among the labours, training costs, implementation and testing cost, the cost of integration with the available infrastructure or complete replacement of the older one is involved. If the higher picture is seen, the cost can affect the adoption of automation in many sectors.
- Research says in the current scenario, only 55% of the jobs can be automated fully. Therefore, the dynamics of the labour market, the difference between the demand and supply graphs and human labour costs while the implementation is happening will directly affect the revenue of the corporations.
- The labour cost savings, higher quality, and productivity through automation and increased throughput are leading the way to economic benefits.
- Job losses may lead to social regulatory impacts in the implementation and adoption of automation techniques and hence impacting the complete revenue generation ecology.
Considering the above factors, the effects of automation seems to be big at the industry level rather than globally.
Automation and its great impacts on the job market are debatable. The mass unemployment, potential decrease in usage of human labours, the level of productivity which is unattainable by human beings, the world’s economy seems to be in quite a juggling position right now.
According to McKinsey Global Institute analysis, human labour will still be required in many job activities, but a percentage of all work can be automated across the occupations.
The global scenario says that human labour will be working in all the sectors even though the automation techniques are adopted. However, the behaviour of the jobs will change, and new skills have to be developed and learned fast to keep up the pace.
On the reflection of all the analysis and debate, profit growth, revenue growth, and investments are directly related to the adoption of automation. Investments will create new jobs as it is being seen. According to a study conducted by Reuters Thomson, more than 100 top innovative companies spent more than $225 in research and development which created around 270000 jobs worldwide.
While the robotics will increase the profits in the global economy. If that is invested somewhere else, it will continue to create jobs for human labours, so that both people and businesses gain something from the automated world.
