By Ben Rand
There has been a growing debate about whether technology is destroying jobs, particularly in the manufacturing sector. In 2011, two MIT professors published “Race Against the Machine,” in which they suggest that new technologies such as robotics were reducing the demand for human workers, perhaps permanently. Will such technologies cost us manufacturing jobs?
Fear about new technologies is not new. It dates back to at least 1779 and the dawn of the Industrial Revolution, when an Englishman named Ned Ludd purportedly smashed some machines to protect his job, giving rise to the Luddites, English textile artisans who protested against power looms in the early 1800s. While power looms cost some artisans their jobs, that technology also dramatically reduced the cost of fabrics, making them accessible to more customers and leading to a textile boom. The increase in demand caused the number of weavers (i.e. loom operators) to grow dramatically throughout that century, even though the labor required to weave cloth fell by 98% over that same period.
A similar thing happened in the early 1900s, when Henry Ford introduced the assembly line, dramatically lowering the amount of time and labor it took to manufacture his cars, from 12 hours to 90 minutes. Fewer labor hours meant each car cost less to build. Ford passed some of that savings along to consumers in the form of lower prices, which again sparked a boom in demand that saw Ford’s sales increase. That led to more hiring to meet the demand, even as the labor content of a Model-T plummeted, culminating in Ford’s famous “$5 Day” offer in 1914, which effectively doubled the previous average manufacturing wage. Ford’s own workers could now afford a Model-T and the modern middle class was born. By the way, Ford’s sales went up. Again.
Clearly, new technologies do eliminate certain jobs. We’re seeing that now especially with low- or no-skill jobs. Just as textile artisans lost out to loom operators, in the future, driverless cars could put bus drivers, truckers and cabbies out of business. But if new technologies spark demand by dramatically lowering prices or meeting unmet needs, then other new jobs or even new industries are likely to be created. In reality, certain jobs are always being destroyed by new technologies, new products, new processes and/or new business models.
What is not open for debate is that new technologies are coming, just as they always have, whether we are ready or not. The companies that embrace and successfully deploy technology to make their products better, faster and cheaper will have an advantage over those who do not. This has been a simple, immutable truth of manufacturing since the Industrial Revolution. In reality, there can be no debate. There is no choice. The Luddites will always lose.