Artificial intelligence as augmenting automation: Implications for employment

There has been concern that artificial intelligence (AI) may cause significant unemployment; however, proponents say that AI augments jobs. Both of these positions have substance, but there is a need to articulate the mechanisms by which AI may actually do both, and, in the process, transform the balance of work available. We examine economic studies of automation’s impact on employment and skills, illustrating the favoring of nonroutine skills over the routine, and a hollowing-out of middle-skill jobs. We then use case evidence of AI and automation to show how AI is augmenting automation to the same effect, allowing firms to modularize and control routine work. The remaining work tends to be nonroutine and low-skilled (allowing for further replacement in the future), or high-skilled. We illustrate the dynamic effects that occur when AI is combined with other key technologies, creating economies of scale and scope for firms. Through augmentation, the resulting employment structures may also have lower quantities of high-skilled work. This depends on advances in AI, and its ability to replace more complex forms of work. We end with a call for more critical conversations between society and business, and on what business schools should teach.