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It’s Managers, Not Workers, Who Are Losing Jobs To AI And Robots, Study Shows

Managers, not lower-level employees, are seeing their ranks diminished with the onset of artificial intelligence and robots, a new study out of the University of Pennsylvania Wharton School finds. That’s because as AI and robotics expands within a business, managers can oversee a wider breadth of operations.

In a recent podcast discussion, Lynn Wu, professor at The Wharton School and AIB Affiliated Faculty, points out that “contrary to the popular notion that robots will replace human labor, we find robot-adopting firms employed more people over time. Any displacement of labor came from firms that did not adopt robots. These non-adopting firms actually lost their competitiveness — and they had to lay off workers.” Details of Wu’s study, based on looking at the performance of firms that purchased AI and robots over a 20-year period in Canada, will be published in the INFORMS journal Management Science.

The most surprising revelation from the study, however, was that AI and robotics adoption resulted in a reduction in management and supervisory ranks. “This is a class of people we did not expect robots to have an effect,” Wu says. “Because managers, by definition, supervise other human beings, so we really cannot replace their functions until the singularity occurs with artificial general intelligence.”

The decline in managers’ opportunities in the AI/robotics enterprise is the result of vast efficiencies introduced to processes that once required a cadre of managers to oversee. “There is less need for managers to supervise, ensuring that workers show up on time, inspect their work, etc.,” says Wu. “Robots can record precisely the work they have done, so there’s no agency costs, no fudging of the numbers.”

Another surprise is the fact that AI and robots boost employment with both low-skilled and high-skilled jobs. Rather, it is “middle-skilled” jobs that are threatened, Wu found. “Robots cannot directly substitute low-skilled workers such as pickers and packers,” she says. “A manager can potentially supervise many of these workers at a time.” For high-skilled workers, “the effect is a little bit less certain,” she continues. “They can manage themselves; these high-skilled workers know how to do their jobs better than their managers.” Read more via Forbes

Pemo Theodore

Pemo Theodore is a Media Publisher and a great people connector. She was Founder Silicon Valley TV which has served the San Francisco Bay Area for 10 years! She has produced Silicon Valley Events for Investors & Startups for 10 years. Pemo loves to video interview venture capitalists & founders to engage the human behind the success stories.. She has been Executive Producer of FinTech Silicon Valley for 6 years, organizing twice monthly FinTech talks & panels in San Francisco & Palo Alto and audio podcasts. She believes in learning through a great discussion with experts in the domains. Pemo has a talent to bring the right people together and is an incredible networker. Pemo's events have been seen as supporting Venture Capitalists & Angels in sourcing great deal flow from startups who attend her events. Many founders have received funding through meeting investors at her events. Her favored medium is audio & visual media and she has built up a great body of work of videos of panels & interviews and podcasts in Silicon Valley startup ecosystem. She has lived & worked in Canada, Australia, New Zealand, Ireland, London, Northern Ireland & Silicon Valley. Bio

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