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every time we see a potentially transforming technology that could affect work right
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so we see that back in the days Industrial Revolution the ludites movement right those people who
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literally burn the Looms and uh it didn't turns out that you know having these looms that effectively accelerate
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the process of making garments to not make these people lose their jobs we actually see an increase in employment
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so every time we see technology that could potentially you know change the way we were change our lives we I think
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there's like a human visual reaction to it welcome to the ripple effect the podcast that takes you
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on a journey through the minds of work and faculty I'm your host Dan Loney and
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in each episode we'll be diving deep into the inspiration behind the groundbreaking research that Wharton
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professors have conducted and exploring how their findings resonate with the world today we'll be covering a diverse
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range of topics bringing you the latest insights and knowledge that you can apply to your life into work so get
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ready to dive into new ideas with the ripple effect and a pleasure to be joined by Lin Wu
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who's associate professor of operations information and decisions here at the
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Wharton School Lynn great to talk to you again so much for having me thank you and I
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guess let's start out by what it was that has kind of originally sparked your
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interest in studying how kind of robots are are starting to change employment that's a great question honestly this
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one has the easiest motivation at the time they're I mean still going on now
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there were just so many articles on a press and Academia or everywhere about how robots are going to take over all
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our jobs and the pending robocalypse that's gonna happen very soon and uh there were already policy pieces on
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robot taxes you know you had one Bill Gates promoted it Bill de Blasio made it a central piece of the presidential
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campaign back in 2000 2020. and the Bernie sander recently had also proposed some kind of a robot
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attacks so I think it's really important to understand what's going on here like have some real
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concrete evidence at the firm level to see whether firm actually do laid off people on mass
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after robot adoption and there were only industry in the country level evidence at the time and there's actually really
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important to study at the firm level because you know countries and industries do not adopt robots firms do
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right and uh whatever the positive negative fast you find depends on you know whether firms that adopt actually
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are people were they you know where is actually coming from from that do not adopt so this kind of a you know this
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kind of I found a very difficult to observe in when you're looking at a macro level at industry and Country
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level why is it you think we've kind of had these narratives pop up and and and
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really in many cases uh they have taken hold uh in with some people over the last few years
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I think it's uh not just last few years like I think I've seen this kind of
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Trends going on like every time we see a potentially transforming technology that could affect work right
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so we see that back in the days Industrial Revolution the ludites movement right you know there's people
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who literally burn the Looms that actually automated the process of making uh you know garments
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and uh it didn't turns out that you know having these uh looms that effectively
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accelerate the process of making garments did not make these people lose their jobs we actually see an increase
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in employment for people who can effectively use these new automated mechanical tools like like
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looms and you know we see the same thing with like you know Excel excels like it's going to take it's going to replace
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accountants it never happened right so every time we see technology that could potentially you know change the way we
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work change our lives we I think there's like a human visual reaction to it and especially we
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tend to overestimate what a technology technology can do and thinking oh my gosh I'm gonna lose
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my jobs now and I think it's really important to take bad to think about what exactly is that technology doing
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the four you know we make any strong decisions especially the policy makers uh you know
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a policy angle to decide you know what are we going to do about this what are workers going to do about what firms
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they're going to do about it so tell us a little bit about the research that you're doing in this area
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to try and really get a better grasp on what's what's been taking place here
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yeah absolutely so our work is a first to study robot adoption unemployment how the facts are going is going to be at a
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firm level so one emphasis at the firm level is because only at a firm you can see what happens
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when firm adopt robot do they actually lay off people or do they actually hire more people and what happened to The
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Firm that did not adopt right so these kind of uh effects can only be observed at a more micro level
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so we actually use the data from statistical Canada which has a comprehensive data on robot Import and
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Export so which have a very good measure of robot adoption data and we also have
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very comprehensive data about the financial performance what about from the tax filings a bunch of uh you know
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mandatory surveys that the Canadian government mended it various firm practices so we found is exactly some opposite of
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what people were expecting that robot did not replace human workers in fact the robot adapters or the firm that
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adopted robots hired more people than it did before so how do we reconcile the evidence that
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we see sometimes an industry level the country level there is a negative effect on robots unemployment
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it turns out it's not a robot adopting firms that are hurting employment it is a firm that did not adopt robots
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that are losing the competition they're not competitive as before and they had to lay off people because
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they're losing the market share so it's a very different story than the popular press thinking
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that we got a tax robot to preserve human work it turns out is the People The Firm that did not adopt robots need
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help so taxing the firm that robots or turned out to be exactly the wrong thing to do in this case
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that's so that's like a one major finding in in in saying in basically saying well look we actually look at
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these phenomena in a greater detail to understand what's going on here without
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this kind of a firm level measurement and and Technology measurement we wouldn't be able to know this important
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distinction we also have found other effects on employment it's not the number that
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matters so we always think that robots are you know taking over our jobs and that's not that's not the case but it
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turns out that the story is not as rosy as Swig had expected right so we actually see the skill effects basically
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the federal robot on different type of skills has a very different has a different
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story so specifically robot adopting firms hired more High skill workers and many more low skill workers at the
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expense of middle skilled workers so here I Define High skill worker are those with college education low skill
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workers are the people with barely finished high school and middle school workers are people with high school
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degrees but with kind of where associate degrees has some kind of a more advanced
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to work related trainings so is this middle skill workers are being decimated by robot and that is a big problem and
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we also show that not only that managerial work supervisory work has also been decimated by robots
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so if you look at average number it looks great like employment has gone up but by
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hollowing all the middle skill work hollowing out the supervisory work is actually a big problem because now the
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career ladder is broken right right so how do we incentivize how do we train how do we make sure uh you know where
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did middle skill work no they can't I mean you can't expect people to all get
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college degrees and become you know programmers or become robot technicians right or you know producers right
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yeah same thing with old skills yeah does the adoption of robots in the firms that you see uh that have done that does
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it change the Dynamics of the work being done by those companies not even necessarily the labor side of it but
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actually the the actual work and maybe even the success rate for the company itself
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absolutely so let me give you an example right so I think you touch on a very important question is what like you know
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it's just adopting the robot itself is not going to be enough right you have to
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be able to learn how to manage robots in a way that accelerates your performance
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it increase your work or productivity so let me give you an example a real live example it's like a repair facility at a
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U.S electronic firm they actually experience a dramatic Improvement in their ability to observe productivity
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after robots were implemented okay so this is a repair facility they fix Electronics okay and because robots
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don't get tired they don't get physically tired when performing this kind of repetitive task of you know of
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fixing certain uh errors a certain problem in the electron electronic board so they can do this job more
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consistently than humans who previously doing the same task as a result of variance in production
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actually have gone down so this allowed manager to clearly observe individual employees behaviors okay and they
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actually found that you know through this system because robots are doing these kind of tasks they were able to
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see oh many employees so human employees were following irregular patterns or being very productive in the morning
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compared to the afternoon and in the afternoon their productivity kind of went down a little bit
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and but then they do more repairs later hours as they were like you know cramming their work End of Days
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so interestingly after robots are implementing the repairing process right they are actually able to trap as
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individual employees productivity for easily or for two reasons right first the type of Errors the robots made are
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very different from that of humans okay so because of the differentiating errors
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between humans and the robots is make it easier for us to figure out which one is
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which okay and robots are also more likely to make consistent errors compared to human
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errors right again making human errors easier to identify okay another reason is that robots also provide a precise
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data about their own performance okay which also made it easier to isolate both positive and negative side of
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performance changes caused by human behaviors so this data generating capability allow manager to you know
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monitor their productivity much better than before detect weaknesses in the production processes and then still just
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not just stopping robot itself all the other thing they've done to detect the
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figure out in the production production process in this case the manager of the referred
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facility wasn't even aware of this cramming Behavior described earlier until the robots were able to Monitor
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and adopt uh other than that robot to observe these processes and as a result they were changing lives
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of the word processes along the way to further reduce the errors once human or human workers and robots are working
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together and overall error raised in a facility has dramatically improved that's an example of where robots how
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robots can be used to improve productivity in human uh how to how to manage Workforce appropriately to
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capture to further increase the effect of the robots how do you think that then careers are
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going to be impacted by the further adoption of robots and and I'll play that off of uh the comment you made
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earlier about the impact being uh significant on middle managers as we go forward you would think that's a that's
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an important kind of stepping stone in a person's professional career if we have fewer of those then that
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changes I think the the hierarchy the structure of leadership within companies that's a really really important point
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and it's actually a really hard problem to solve so in my research I mentioned
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earlier because you have many more lower skill workers many more higher skill workers at expensive Metals your work
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the type of manager you need is going to be very different right these managers need to understand how a robot Works to
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be able to detail these processing just just like just like the example I gave about repair facilities right they need
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to change fundamentally change the way they work fundamentally change the world the way they monitor and reward
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and hire employees right so these are those are two effects number one we simply need fewer managers than before
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supervisors before because managing standardized work on Lower skilled worker is you can manage many at the
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same time as opposed to higher skill or middle skill workers right and furthermore the type of manager skill
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management skills you need is going to be different right so it's a big problem
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right so now I so now we have no middle skill work but less of them and much fewer supervisory work and where do
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people go right so middle so the entry level work is supposed to be a stepping stone as you said to move up in the
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career hierarchy and now you can't move up anymore right you've got middle still you're gone you
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go to uh the supervisors and you are gone and then you can't it's very hard to
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move up to high skill work right that requires extensive training so this is a very big challenge for managers right
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you had to think about well how do I build a new career ladder for my employees now the existing one may not
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work it may not have worked already and that's why you see a lot of unionization going on in the workforce
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from Amazon warehouse to Starbucks everywhere it's because that you cannot you can't use a career ladder as a
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motivating force for people to you know work in the entry-level job by lower pay
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in in exchange for a future career advancements so how do you build that back you know
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if you don't the firms do not build a back then we're going to see Union
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becoming uh you know a more Mainstay in our in our society again so if we're
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expecting that we're going to see more companies uh adding robotics uh into their operational structure here in the
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years ahead I guess does it answer the question whether or not companies can even avoid having robots in the first
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place it almost seems a little bit like they can't afford to do that as we move
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farther down the road yeah this this case unless there's no one adopting a technology the moment one one firm
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adopts they become more effective more competitive that means everyone else in order to stay competitive in the market
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in Marketplace you have to adopt these new technologies right like you just uh even the biggest firms like you know um
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very profitable very you know you know very you know Innovative firms have to catch up on that game and we've seen
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that Google's case when Microsoft released our GPT Google's scrambling to
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do the same thing you know incorporating every aspect of that technology in their
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in their products like that is something that firms cannot avoid uh you know just
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uh burning the ludice right the little guy's burning the Looms not gonna work
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yeah how then do you think that uh the advancement of chat GPT will play a role uh in the corporate uh corporate
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structure as we move forward I think uh for the LGBT large and large language models is
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going to accelerate that process tremendously because you think about What Chai GPT and the this large
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language models you know what they're targeting is exactly that middle skill
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work right it's not like it's entry level work like you feel like you know and uh
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that that will be replaced and then because these technology are really good when you already know when you are an
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expert in that field already accelerates your work but who are doing those work for you before if you were
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you know a senior person is people below you now you can use the charge EBT to do a lot
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of it for you so it's precisely that middle skill work that is being targeted
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and that's exactly you know it's the same effects of robots and there was
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like a recent paper by openai and also a colleagues at Wharton I showed that the
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the the the skill set up being targeted gbt is programming drops again middle skill programming jobs and writers
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writing jobs again those are you know entry-level writing jobs so those are being you know being massively
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accelerated by the chat NDP so is the is the middle skilled job uh does its longer term uh outlook look very Bleak
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at this point or is there going to be some level of middle skill work that will still be there in conjunction with
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all of this advancement around technology see middle skill work is in trouble but new middle skill work will be
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created for example right prompt engineering something you've never heard of until
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maybe it's a few months ago these Engineers are literally trying to make happy do what it's supposed to do
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right prompt engineering or robot technicians to fix the robots right right process engineering to think
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observe processes to see where robots can be used in the production processes right all these things are you know
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probably going to be new tasks and then over time they'll tell new tasks will be
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involved into new career opportunities just like you know 20 years ago there was no social media manager right that's
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a new job that created as a result of the Technologies but the important problem is not necessarily the new job
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will be created I guarantee you that new jobs and new tasks will be created is the speed at which we can retrain the
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existing Workforce to actually leverage that right the last time we had this kind of dramatic technology change is
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probably Industrial Revolution um steam engine replay being replaced by electricity that took 30 40 years to
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complete right and that means a new generation of managers retired New Generation sorry the existing like uh
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you know existing managers to retire existing Workforce retire for new managers a new Workforce who are already
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you know being trained in the time a lot of Technology too more effectively except in this time
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we're not going to have 30 40 years Horizon we're gonna have five ten years
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Horizon so how do you retrain that existing Workforce is going to be a huge challenge for
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everyone for firms for policy makers for everyone yeah thank you for listening to the ripple
00:19:52
effect we hope you found this episode informative and engaging don't forget to
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