Literature Review on Automation and Technological Unemployment

 

You will conduct a review of the literature in the subject area of Automation.
Specifically, you are to identify the origins of the concept of the Technological
Unemployment and to chart its development up to the present day.

1.Establish the scenario for your report by selecting an organisation of any type,
sector and size to focus your report on. Describe:
a) Which organisation is it? (type, sector and size)
b) What are the main products and/or services provided by the organisation?
c) Who are the main customers?
 
2.Prepare a literature review, charting the development of the concept of
Technological Unemployment from its inception until the present day.
Ensure that you include references to at least 10 peer-reviewed articles, including
the 2016 paper by Frey and Osborne that has been supplied. You may also find
relevant reviews in the trade press and from other authoritative sources.
 
3.Apply Frey and Osborne’s findings (see Appendix A in the Supporting Materials) in
the context of your chosen company.
Consider a low impact scenario, when only jobs at high risk (> 70%) are replaced
by technology. How will the company change?

 

Introduction

Technological Unemployment

Technological Unemployment is a term used when there is a loss of a job or employment opportunity because of the introduction of machines and automatic service. (Woirol, 1996). Today global economies are facing a major issue which is “Technological Unemployment”. According to an article “Technical Change, Effective Demand and Employment” by Cesaratto, Technological Unemployment in short and simple language is the replacement of human by machines and automation. Unemployment because of advances in machines and other services provides redundancy to workers. For example, if shoes are manufactured in machines on a large scale, then a cobbler can lose its business. (Cesaratto, Serrano, & Stirati, 2003)

Automation

Automation is term given to a technology where machines replace human for doing any task or any task where there is no involvement of human. According to Rifkin in his book "The End of Work", Automation is the utilization of various control system for the operation of machines, gadgets, vehicle or any task without any intervention of a human, or with minimal human intervention. (Rifkin, 1995)

Coca-Cola

Coca-Cola is world's largest soft drinks makers and was patented for medicine. John Pemberton invented Coca-Cola in the late 90s and it was the marketing tactics by Asa Griggs Candler which made Coca-Cola a global leader in soft drinks. The products were sold in over 200 countries by the year, 2013. (Dudovskiy, n.d.) 
Customers, products, and services: Main target customers of Coca-Cola are those individuals who are aging between 12-30 years. According to a press release by Coca-Cola, there is no targeting segment with regards to Life Style and Occupation, this drink is made for all. Coca-Cola has deliberately positioned itself in the soda pops market. Coca Cola has direct tie ups with the canteens of offices and colleges. Also, they have tie ups with various big restaurants like McDonalds, KFC, Pizza Hut and Dominos. Their corporate tie is a big reason behind their increasing sales. 
It must face an important question: Will it have to accommodate or adapt to 200 countries where the brand sells its products? The brand has first grasped this principle of "acting and thinking worldwide". In this manner, Coca-Cola is prepared to keep Coke in the core product, offering the needs of locals. They utilize the strategic position so that there is just a single image in the entire world, which is a success since today it is a part of daily existence all over. ("One Brand" Marketing Strategy | Coca-Cola GB, n.d.)
Advancement and technological development has made Coca-Cola almost automated today. Lots of workers who used to work and fill the bottles with the help their hand, from manufacturing cola drinks to packaging, workers were involved in every process. But now in the 20th century, everything has been changed. From manufacturing to supply chain, everything has been automated. Although it has benefited both company and consumers but affected a lot in giving unemployment. 

Literature Review on Automation and Technological Unemployment

In an article “The future of employment: how susceptible are jobs to computerization?” by Frey and Osborne. They investigate how annoying works are for computerization. To assess this, they start by applying a novel method to estimate the possibility of computerization for 702 businesses implementing the Gaussian process classifier. Because of estimates, they examine the expected impact of future of computerization on the number of jobs at risk and the results of the US labor market with the primary objective of analyzing the relationship between computerization of wages and academic achievement prospects. 
In his article “Technology, unemployment & policy options: Navigating the transition to a better world” Marchant reported that, it makes the economies unstable because unemployed cannot run as consumers. Despite if this fact, unemployment is one of the widely disputed concepts for a long time. According to his article, there is a worry that the rising technologies like PCs, A.I (artificial intelligence) and robots or autonomy are uprooting human jobs, making a pandemic of "technological unemployment". Although this projection has not yet been declared, if this is genuine then our financial and social results will affect this future. In this manner, it is appropriate to begin the identification of policies and options to determine this potential issue.  (Marchant, Stevens , & Hennessy, 2014). According to an article by a walker. It considers that automation does not completely replace human labor, but by reducing the need for skill to compensate for technological progress, reduces the need for human labor below full employment. (Walker, 2014). Introduction to technology in production sector has resulted in optimum unemployment. As per an article “Does Technology Cause Unemployment”, when there is an increase in technology advancement, then there is an increase in unemployment level too. (Georgiou, 2009). In a book “The Economics of Technology and Employment: Theory and Empirical Evidence”, investigation on the effect of technical change on employment is done, in which critical analysis has been done to analyze how much economic analysis and theory can deal with this problem of technological unemployment (Vivarelli, 1995). 
Technological unemployment is the mainly because of dissimilarity between the collective aptitudes and skills of the workers and the abilities important to show the available employment. It is considered as big in the form of revolution and whether you like it or not, it is forever going to change human civilization. (Cesaratto, Stirati, & Serrano, n.d.)
Lower skill level is also a result of technological unemployment. According to an article by Pauw, unemployed are not having sufficient skills that are required in the market and this is the big reason there is the increased demand of skilled labor because of technological advancements. (Pauw, Oosthuizen, & Westhuizen, 2008). One of the major benefits of the introduction of the Industrial Revolution in production sector was to give direct profit to both manufacturers and consumers. This digital era has produced some major problem, although it has benefited consumers and company (Jämsä-Jounela, 2007).  
According to A history of unemployment, the rate of unemployment was less in comparison with the rate of unemployment after the industrial revolution. According to this unemployment level in the USA was less in the 1950s and 1960s. (A History of Unemployment - An Encyclopedia of World History, n.d.). In an article “Reasons for Youth Unemployment”, it has been stated that advancement in technology has led to increase in the level of unemployment. (Pettinger, 2017)

Scenario

Findings of Frey and Osborne

Frey and Osborne find that employment in the sectors like, logistics, manufacturing, transportation also administration and official jobs are at risk of getting automated. Despite the growing jobs in the service sectors, the occupation has become susceptible. According to Dr. Osborne, he had identified several important obstacles, which are currently stopping businesses automatically. Since big figures help in overcoming these obstacles, many jobs will be put to risk. Their findings show that the race of technology is moving forward, less skilled workers will go on the tasks which are not susceptible to computerization- that is, the tasks requiring creative and social intelligence, articles states. "To win the race workers have to achieve creative and social skills." (Frey & Osborne, 2017) 
Similarly, in case of Coca-Cola, skilled workers will have to be more skillful to stay and compete with the automation.  
Some Facts and Graph on Automation and Technological Unemployment. 
Slowly but this is true that robots are taking away employment. Same is the case with Coca-Cola. According to a back-off-envelope launch, in the ninety years, "70 percent of today's businesses will be replaced by automation in the same way." Should we worry? About 200 years ago, 70 % of American labors used to live in farms. Today computerization has disposed of 1% of its jobs, with the machines instead of them. But the displaced laborers did not sit still. Rather, technology and automation have made a huge number of jobs in totally new areas.
 
In an article in Economist “The onrushing wave" Productivity gains will be realistic from the future automation, even if they submit to the owners of most machines. Some of the goods and services will be spent - golf trainers, domestic help and so many - and most of the rest is invested in firms who are demanding expansion and possibly more labor fare. Same is explained in the graph above. (The Economist, 2014)
 
Based on the data of the Federal Reserve Bank of St. Louis, the graph below shows employment in the United States as part of all jobs, as you can see, a line from the beginning of the 1950s Almost completely flows straight down the line. (FRED, 2018)
In an article in The Economist, “Automation and anxiety” probability of computerization on different jobs have been discussed. Same is given in the graph (Below). (The Economist, 2016) 

How will automation affect the company?

There is a total of 47% of people who are employed in the USA and their job is at risk because soon they will be replaced by machines. Similarly, in U.K 35% of jobs are at risk of getting replaced by machines. Automation will not affect those blue-collar workers who are skilled enough to work with these machines. Companies will need to train their skilled workers and employees on a regular interval to work with these machines. Companies will have to pay fewer wages to workers because most of their repetitive work will be done by machines. 24*7 Support for their customers with the help of Chatbots. AI and Machine Learning will change the way of marketing for all the companies. Payrolls and HR will be Automated and Cloud-Based. (Gray, 2017) 

Conclusion

To limit technological advancement, most of today's believers have given their case basis on short-term delivery effects. They can understand the government jury to assess the harm done against their apparent honesty and eloquent society. But the loss will be punitive, not reimbursement. I believe that improvement technology will be a challenging task for workers and employees to survive. They will have to improve them self not only by getting smarter but also skillful. Technology used to do both things: creation of a job and loss of a job. Generally, it used to reduce low wages, employs fewer productivity, while it creates jobs that make more productive, higher skill and better payments.

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Bibliography

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A History of Unemployment - An Encyclopedia of World History. (n.d.). Retrieved 2 10, 2018, from http://www.localhistories.org/unemployment.html
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