Does artificial intelligence destroy jobs?

Let’s not be afraid: Schumpeter’s “creative destruction” is a source of growth

Artificial intelligence (AI) has been a topic of debate for several decades, with often exaggerated fears about its impact on the labour market and everyday life. For example, in 1968, Stanley Kubrick’s film “2001: A Space Odyssey” imagined a future where computers would control all aspects of human life, even killing them if they stand in their way. However, more than 55 years later, humans are still at the core of our society and economy.

More recently, Elon Musk predicted that by 2019 we would have autonomous cars on the road. Yet, although significant advances have been made, autonomous cars are still far from being a mainstream reality.

Creative destruction

Nevertheless, it is important to consider the Austrian economist Joseph Schumpeter’s theory of ‘creative destruction’ to understand the impact of AI on employment. According to Schumpeter, innovation and economic progress are the result of a process of “creative destruction”, in which new technologies replace old ones, leading to a transformation of the labour market.

Successful collaboration

In the context of AI, it is essential to recognise that human-machine collaboration is often more effective than a machine alone. Machines can complement human skills, improving productivity and allowing employees to focus on higher value tasks. Three weeks ago, Microsoft presented its new software tools under the name “Microsoft 365 COPILOT”, which once again emphasise people-machine collaboration.

During the Covid-19 crisis, for example, bank customers needed to talk to human advisors rather than rely on robots. So AI did not replace human workers in this case, but rather served as a medium to help employees serve their customers better.

Replacing repetitive tasks rather than creativity

The sectors most likely to be affected by AI are those that involve repetitive and predictable tasks. In contrast, jobs requiring human skills such as creativity, empathy or complex problem solving will remain less affected.

Of course, it is human – the term is ironic in this context – for workers to fear being replaced by automatons with artificial intelligence. In the 19th century, when the industrial revolution was already overturning the established order, worried workers destroyed the looms of several spinning mills with sledgehammers. Today, however, these concerns have been dispelled and no one is thinking of returning to the arduous task of hand weaving.

Unemployment at its lowest despite automation

It is interesting to note that despite increasing automation, the unemployment rate in countries such as Switzerland, the USA and the UK is close to its historical low. This partly confirms Schumpeter’s theories that innovation and creative destruction can lead to the creation of new jobs and ultimately stimulate economic growth.

In summary, it is essential to temper our expectations and also our fears about the impact of AI on employment and to recognise that human-machine collaboration is often more effective than a machine alone. Despite the exaggerations of the past, Schumpeter’s creative destruction remains relevant to understanding AI-induced labour market transformations. It is likely that AI will destroy some jobs, but it will also create new ones and human workers will continue to play an essential role in our economy.

 

 

 

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