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Study: Technology, Not Outsourcing Is The Biggest Threat To Jobs

Strategy Analysis says technology that adds intelligence to computers is a bigger threat to jobs than low-wage countries.

Technology that adds intelligence to computers poses a far more serious threat to jobs than low-wage countries, a research firm said Friday.

The first wave of job-killing technology occurred in manufacturing in the 1990s, when computer-driven robotics introduced across industries from automaking to steel made it possible to produce more product with fewer people, Strategy Analytics said in a recent analysis of emerging technologies.

In the second wave, workers in customer service, help desk, directory assistance, and other support activities in businesses will be replaced by computers that have enough intelligence to handle repetitive tasks that occur during human interaction.

In the manufacturing sector in the 90s, companies sold $100 billion worth of software and hardware for robotics, said Harvey Cohen, president of Strategy Analytics. While the technology increased productivity and added to companies' bottom lines, it also eliminated 10 million jobs worldwide.

In the new millennium, as the use of intelligent computers increase, jobs will vanish, with several million expected to disappear over the next five to seven years, Cohen said. While less labor to do more work is great for business, there will be an impact on society as people find decent paying jobs harder to find.

Technology "will take the job growth out of the industries that the government has said are good places to develop employment," Cohen said. "So we've raised the question, have they thought this problem through properly?"

While technology isn't replacing large numbers of people in non-manufacturing industries today, it's expected to in time, with the initial impact showing up as slower job growth and stagnant wages.

"The thing about technology is that it has a tendency to creep up on you," Cohen said.

Lots of examples of this trend exist today. Directory assistance, for example, is being done through a combination of computers and people. A computer answers the phone, relieving the operator of saying the same greeting and asking the same question over and over again. But a person actually looks up the telephone number.

A computer will eventually handle that last task too, since looking up a number doesn't take a lot of intelligence and voice-recognition software is improving all the time, Cohen said.

"That sounds like progress, except the person who had that job, which didn't pay badly, doesn't have a job anymore," Cohen said.

Computers also handle many customer-service tasks, such as directing callers to service reps or scanning customers' E-mail and giving back automated responses. As computer intelligence improves, technology will handle more tasks and replace more people.

And the technology will get better. For example, the Defense Advanced Research Projects Agency, the research arm for the U.S. military, is leading a project to develop a vehicle that can navigate a desert for at least 10 miles without a driver. Prototypes have gone as far as seven miles, successfully moving around cactuses, boulders and other obstacles.

"I view this in the same way as the first flight of the Wright brothers," Cohen said.

Such advancements eventually find there way into businesses, which means someday fewer jobs driving forklifts and delivery trucks.

"The level of embedded intelligence in our electronic products and services is at a real turning point where we see this accelerating," Cohen said.

So the anger expressed by politicians and workers over high-tech jobs lost to India and other low-wage countries is really a distraction from the real threat, according to Strategy Analytics. "Looking forward, we don't really see the big threat in the long run being outsourcing to India," Cohen said. "We see the real threat from outsourcing to intelligent capital."

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