The Politics of Automation
Rapid technological advancements in robotics and AI are ushering in a new age of automation. The demand for global industrial robots is accelerating across the globe, with South Korea and Germany leading the way.
The aging of working-age populations in developed (and some developing countries) has forced businesses and governments to look towards automation to sustain productivity and economic growth.
While more automation will help mitigate the aging workforce problem, it will also create labor market disruptions.
The activities most susceptible to automation—work that involves routine physical activities in predictable environments (such as manufacturing)—will require less human labor. But alternatively automation will drive demand for more managerial, creative tasks (associated with high-skill, high paying jobs) and more interpersonal, service-based tasks (associated with low-skill, low paying jobs.) These trends may contribute to the 'hollowing of the middle class,' in which middle-class incomes continue to stagnate or even reverse.
How governments respond
On a global scale, automation may undermine the traditional industrial path to economic mobility via the deployment of large-scale, cheap labor. This may not only hurt growth in some developing countries but also create massive social and political challenges.
Governments must balance the economic benefits of automation and the negative social consequences. The ability to balance these byproducts will not only depend on the size of economic exposure to automation, but also on governments' capacities to prepare and respond through social safety nets and worker retraining programs.
Eurasia Group's Demographic Vulnerability Index identifies countries with the highest levels of vulnerability—places that combine large youth populations, low per-capita incomes, and weak government institutions.
Universal Basic Income (UBI) is a commonly-discussed potential policy response to the widespread adoption of automation. Under UBI, periodic cash payments provide citizens with enough money to cover basic living expenses. While no country has yet to adopt a full-fledged UBI program, there have been several studies and trials carried out by both governments and private institutions.
UBI is a controversial measure. Supporters argue that it will help to mitigate the social costs of automation-driven job losses, but critics argue against prohibitive cost, lowered incentives to work, its image as a panacea to political leaders, and the difficulty of defining 'basic living expenses.' While no clear answer exists on the measure, the growing prominence of the debate highlights the societal anxieties surrounding automation and the importance of governments to prepare an response.
