In 1900, there were more than 21 million horses at work in the United States. By 1960, there were fewer than 2 million. Decline began when their use was partly replaced by rail and steam engines. For a while, they were still utilized in fields, short-distance transport and in armies. The arrival of the internal combustion engine, however, made them completely irrelevant and obsolete.
To this day, there is fear that man may be in danger of going the way of horses.
In a recent issue of Harvard Business Review, statistics highlighted the decline of job and wage levels in the 1980s in relation to sustained economic growth.
This decline is primarily attributed to increased utilization of technology. In sharp contrast, the job and wage levels in the three decades following World War II were positively in step with the economy.
Initially, machines are used because they are cost-effective. They do jobs cheaper and more predictably. For routine manual jobs and simple menial tasks, machines generate a higher return on investment. They are more efficient than humans, whose performance may not improve dramatically over time.
With each advance of their capabilities, machines are steadily encroaching into territory that used to be occupied by people alone. Automated responses are commonplace. Self-service counters are eliminating the need for clerks. Prescription drugs can be had through vending machines that can read fingerprint scans. Rather than talking to an attendant, one can search for information on touch screen kiosks.
As machines threaten to replace them, humans normally respond by acquiring more skills, investing in higher levels of formal education to keep ahead. Machines, however, evolve faster than humans can keep up.
As this continues, humans may be compelled to accept lower compensation just to keep his job. If pay falls below subsistence level, they may see no point on staying. They become unemployed. And the work they left will be done by machines.
To paraphrase the prediction of John Maynard Keynes in 1930, technology would lead to an increase in material prosperity but also to widespread technological unemployment.
In Beyond Automation, MIT economist David Autor complained that experts often overstate the extent of substitution or replacement of human labor by technology.
He continued that humans and technology are strongly complementary. Autor pointed out that machines may not yet perform tasks that call for flexibility, judgment or common sense.
But “tasks that cannot be substituted by computerization are generally complemented by it.” Instead of looking at machines as substitutes, they should be used to augment the limitations of human capabilities.
To promote their book The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies, authors Erik Brynjolfsson and Andrew McAfee claimed that in comparison to machines, humans are still far superior in 3 skill areas.
One, humans have high-end creativity that generates new business ideas, scientific discoveries, etc. Technology can complement by amplifying this ability. Two, humans have emotions and high inter-personal relations.
The ability to care, nurture, motivate and lead are still beyond the grasp of machines. And three, humans have dexterity and mobility.
The authors warned, however: “None of these are sacrosanct, though; machines are beginning to make inroads into each of them.”
Real Carpio So lectures on strategic and human resource management at the Management and Organization Department of the Ramon V. del Rosario College of Business of De La Salle University. He is also an entrepreneur and a management consultant. He welcomes comments at firstname.lastname@example.org. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty and its administrators.