The AI-fication of Jobs summary

To understand the specific kind of impact that AI can have on jobs and society in general, it’s helpful to look to the past and see what’s happened in these kinds of situations before. In particular, we can look at three different industrial revolutions.

The first one happened in the early nineteenth century, when mechanization first began to threaten jobs in areas like the textile industry. The English Luddites, who got their name from a protester named Ned Ludd, raged against the machines. But their rebellion wasn’t just about smashing equipment; they were talented artisans fighting for their survival. 

Yet, despite their efforts, there was no stopping the first Industrial Revolution. By the mid-1800s, the skilled crafts the Luddites had fought to preserve were mostly replaced by mass production, leaving many artisans displaced and impoverished.

When we zoom out though, a bigger picture emerges. Mechanization also boosted productivity and enabled economic growth on an unprecedented scale. On the whole, more jobs were created than lost. The costs were steep for some, but for British society in general, the first Industrial Revolution laid the foundation for modern economic prosperity.

Fast forward to the second Industrial Revolution, in the early twentieth century, and we see the pattern repeating. The rise of electricity, steel, and the further expansion of mass production methods created millions of jobs, transforming manufacturing into the backbone of the global economy. 

While factory work brought opportunities for many, it also devalued skilled craftsmanship. So we ended up with clear winners and losers. The winners were the engineers, managers, and industrial workers in booming sectors like automobiles and chemicals. And the losers were the artisans and agricultural workers, whose trades were overshadowed by machines and urbanization.

Then came the Third Industrial Revolution, starting in the mid twentieth century and driven by the internet and digital technologies. Computers and automation reshaped industries, creating high-paying jobs in fields like software development while decimating middle-skilled roles like clerical work. Digitalization opened doors for some while slamming them shut for others. Those who couldn’t adapt faced declining wages and limited opportunities, widening the gap between high- and low-paid workers.

Still, throughout all these revolutions, overall employment rates remained surprisingly stable. Jobs didn’t disappear – they shifted. Societies found new ways to adapt, with emerging industries offsetting losses in older ones.

But the transitions were rarely smooth. Wage inequality grew with each technological leap, leaving some thriving while others struggled to keep up. Now, as we enter the era of AI, history offers valuable lessons. Like the industrial revolutions before it, AI will reshape work. But as we’ll see in the next section, this time will be different.