Japan and the Problem and Promise of Automation

If the world has a problem, technology will solve it! That’s the stance taken by many technologists and industrialists who trust that human innovation – when put to the test - will prevail. It’s the “human” part of the equation, however, that is increasingly in question.   

In Japan, for instance, where a demographic decline in working age citizens demands automation in order to fill the gap, Covid-19 has given the country further reason to invest in AI, robotics, and machine-learning wherever possible. Elsewhere in the world, where Covid has left millions unemployed, there’s rising concern that companies will pass on human employees in deference to machines. 

Observing Japan to see how it’s robotic revolution takes hold and impacts people could serve as a bellwether for policy-makers elsewhere. Governments are desperate to rekindle economic growth after Covid’s devastating effects. This means encouraging corporate recovery, while reducing unemployment. In certain sectors – primarily industrial – the two may prove mutually exclusive.  

To help us understand what’s at stake, I contacted the author of the McKinsey article, Maya Horii. She’s a Partner in McKinsey’s Tokyo office and advisor to both public agencies and private enterprise. We discussed Japan’s unique set of circumstances, its declining workforce, poor productivity, and prospects for displacing human workers with machine-based alternatives. 

At the risk of conjuring up images of robot armies deployed to displace human workers, recent studies suggest that efforts to downplay that risk might be overstated. In other words, companies emerging from the Covid crises may have no choice. Whether in the interest of increase productivity or in an effort to reduce the risk of contagion, robots and all forms of AI-driven automation are looking like viable investment options. Workers – in some sectors more than others – may prove expendable.

Just this week, the International Federation of Robotics announced that “2.7 million robots work in factories around the globe, marking it the highest level in history.” Asia - not surprisingly - led by China, Japan and Korea, accounted for more than 218,000 robot installations in 2019,” representing nearly 68 percent of the world’s total.

In Japan and Korea, AI-enabled robots are a necessary evil to shore up the shortfall in available manpower. In China, the situation is quite different. There is no shortage of human labor. It’s instead a matter of manufacturing leadership. China installed more industrial robots last year than all other countries combined. 

The trend in AI-driven autonomation is clear and apparent. The real question is what does this mean for the human workforce? 

Researchers at MIT predict that robot deployment will quadruple in the next five years. More importantly, they say: “Our evidence shows that robots increase productivity. They are very important for continued growth, but at the same time they destroy jobs and they reduce labor demand. Those effects of robots also need to be taken into account.” Taken into account by whom? Governments? Companies? Labor Unions? The Federation?

There’s more. Some of you might have heard a lot about how robots won’t replace humans but will, instead, work with them – as if some magical human/robot melding is in the making. Well, according to the good people at the International Federation of Robotics, demand for so-called “collaborative robots” is virtually insignificant compared to demand for “traditional” robots. As in, the kind that don’t require any form of human participation – thank you very much. 

I suspect that much of this is just evolutionary (…said the Homo Sapiens to the Neanderthal…) It makes sense that labor intensive work is being subsumed by robots leaving humans to dwell on the more creative requirements of our modern economy. But what started with Industrial robots is now leaking into other sectors. Make way for the professional cleaning robots, the inspection and maintenance robots, the medical robots, and…wait for it…the powered human exoskeleton and military-grade robots. If you’ve seen the film, The Matrix Revolutions, you know what I’m talking about.  

If the current message to the global workforce is: Beware blue-collar workers, robots are coming for your jobs, then the next phase points to back-office roles where any repeatable or templatized process ranging from accounting to legal work can and will be done by AI applications. Companies know it to and are preparing in Board rooms around the world to make qualified decisions on which jobs go and which ones stay.

Thinking about law school, financial accounting, or a career in communications? Don’t. There’s a smarter, cheaper, and tireless alternative waiting in the wings and it goes by the name of Artificial Intelligence.