FinTech Silicon Valley Jobs

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 is a Media Publisher & Event Producer. She is CoFounder/CEO Silicon Valley TV She is the Executive Producer of FinTech Silicon Valley & organizes Bay Area FinTech meetup: Silicon Valley FinTech meetup & Blockchain Music meetup with almost 3k members. She has produced Silicon Valley Events for Investors & Startups 7 years. She video interviews venture capitalists & angel investors & FinTech experts. She partners with videographers to cover San Francisco Bay area startup conferences & meetups with livestreaming, video & foto packages Silicon Valley TV She is based in Silicon Valley & has been involved in online business for 14 years. She has been in small business for 46 years in Ireland, London, Canada & Australia. She also published a free ebook (the findings of 1 year research from VCs, angels & women founders) “Why are Women Funded Less than Men? a crowdsourced conversation” She was TheNextWomen‘s most prolific contributor of 2011. Silicon Valley TV has been noted as a platform for supporting high growth women led companies in Huffington Post

SUBSCRIBE FinTech Silicon Valley Jobs youtube

Mailchimp Signup Form

Follow us on Twitter

%d bloggers like this: