Industry News Details

AI Creates Job Disruption But Not Job Destruction Posted on : Jan 20 - 2022

A common concern surrounding automation in recent years is that it will result in widescale job losses as the work previously done by people is taken over by technology. Of course, the reality doesn't really support this narrative, and indeed, companies that invest in technology often end up employing more people as a result of the improvement in their fortunes heralded by the investment.

The leadership team of the fintech company Kashat highlight the reality of investing in technology. They reveal that microfinance has traditionally been highly labor intensive, with many of the skills the same as those used in the sector for years. With the introduction of AI, new skills have been introduced into the underwriting process in order to serve at scale, while enabling employees to further expand their skillset and become even more valuable in the future.

The impact of this distinction is clearly visible in the growth rates across the sector, with those more tech-enabled firms growing far faster, and therefore employing more people, than their more traditional peers.

A cursory glance at the news coverage around automation doesn't suggest that the fears around its job destructing capabilities is going to go away any time soon, so it feels like all additional data brought to the table has merit, even if it does largely repeat that which has gone before.

Research from the University of Warwick fits this bill and argues that just a quarter of the firms that have introduced some form of AI-based technology over the past few years have suffered any form of net job loss. Indeed, the number who said jobs have been lost was roughly the same as the number who said that investing in AI had resulted in more jobs being created (the remaining half said it had no impact).

“Advances in AI have reignited debates about the impact of technology on the future of work, raising concerns about massive job losses," the researchers say. "However, current evidence supporting this is beset by methodological limitations and there is very little analysis of what actually happens in organisations introducing AI-enabled technologies."


Impact on jobs

The research did suggest that AI-based technology was more likely to have an impact on jobs than investment in non-AI based technology, but this impact was also more likely to be felt in the positive, job-creation sense as well. View more