The Impact of Technology on Employment in Construction 2

Thursday, February 4th, 2016
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It was recently estimated by a CEDA report that as many of 40 per cent (almost 5 million) of Australian jobs are at high risk of redundancy from new technologies in the next 10 to 15 years, with a further 18.4 per cent being at medium risk.

Smart machines could replace as many as 40 million to 75 million jobs worldwide. Many areas of manual and professional work are already being displaced by rapid advances in affordable technology. Robots are being developed which can be taught and programmed by any regular worker to perform virtually any hand-eye coordination task and are already being trialled with tasks such as painting, laying bricks and laying pipes.

In the US, a robot called Baxter has been developed to handle a wide variety of manual tasks such as loading, unloading, sorting, and handling of materials. Designed to be low cost (around US$20,000) and sold to the types of small companies which dominate the construction industry, Baxter can even express emotions like happiness and confusion through its digital face and it can sense people nearby and adapt to changes in its environment.

White collar workers’ jobs are also at risk due to advances in artificial intelligence. There are a multitude of jobs in the construction industry undertaken by engineers, quantity surveyors, designers, planners and project managers which are already being displaced by this type of technology. However, this is only the tip of the iceberg.

For example, a machine called Watson developed by IBM uses artificial intelligence, natural language processing and machine learning to do the diagnostic work of doctors and financial advisors. Artificial intelligence is also the basis of Apple’s Siri computer program, which works as an intelligent personal assistant using a natural language interface to answer questions, make recommendations, and perform actions by delegating requests to a set of web services.

In particular, advances in new technologies such as quantum computing, cognitive computing and evolutionary robotics will soon usher in the next era of disruptive smart machines, driven by computing powers millions of times faster than our current ‘classic’ digital computers, and at a fraction of the cost.

Google has just announced it has built the first quantum computer called D-Wave 2X, which is 100 million times faster than traditional digital computers we have today, and new memcomputers are being developed to mimic the way the brain works. These machines will be able to work alone or alongside humans, undertaking the most creative tasks, and they will be able to communicate, interact and learn as they go.

The field of evolutionary robotics is developing robots that have minds of their own and which can even reproduce and evolve by manufacturing their own siblings, destroying the ones which under-perform and saving the smarter machines for future reproduction to ensure that the genetic line strengthens over time. This might sound outlandish, but these machines already exist, albeit in prototype form, and are predicted to have a far greater impact on the workplace than the internet has ever had.

Along with new information communication technologies, these new smart machines will turn our workplaces on their heads, changing the very nature of work, displacing millions of people from their jobs and creating entirely new professions, industries and opportunities for those who can make the shift.

For example, by cutting out many middle management jobs, new information technologies have already flattened organisations by about 25 per cent over the past 25 years and this trend will continue to accelerate.

Our career paths will also change, as will the type of knowledge we will need to progress them. The hierarchical corporate ladder is a throwback to the industrial revolution when businesses were built on command-and-control structures and when success was built on economies of scale and standardisation.  In the digital age, career paths will tend to follow a zigzag rather than a straight line and progression will more likely be ensured by building diverse experiences, skills and networks which are transferable across different businesses as they change.

Millennials who have grown up with new communication technologies will also have different expectations about the types of firms they want to work for. They will want a more flexible and collaborative work environment than their predecessors with less control, bureaucracy and supervision. They need this freedom to innovative and to be entrepreneurial without having to go through multiple layers of management.

Smarter machines will also bring about changes in both the philosophy and practice of management. Manual and repetitive jobs and number crunching will be done by machines, releasing managers to harness their entrepreneurial capabilities, shifting developed economies like Australia from service-based industries to entrepreneurial and management based economies. In the 2014 census, about 37 per cent of those employed in Australia were classified as managers or professionals, the largest of any category. This trend is likely to continue.

However, on the downside, new technology will also bring greater job insecurity. The internet has globalised the market for talent and created a ‘human cloud,’ a global pool of causal workers who are accessible on demand and who can work for far lower wages and produce the same quality work as local workers in developed countries.

There are a multitude of online ‘human crowdsourcing’ platforms, such as Amazon’s Mechanical Turk and Upwork that now connect employers with these global freelancers.  A recent survey estimates that by 2025, over 540 million people will have used one of these platforms to find work. While advocates argue that these new platforms solve labour shortages in developed countries and redistribute wealth, reduce poverty and promote global equality, others argue that they ‘hollow out’ organisations by outsourcing their labour and drive down wages and working conditions in the pursuit of profits. As a result of this trend, many people are now faced with a future of permanent part-time work on casual and even zero hours contracts which provide little of the job security.

Another well-known downside of technology is the globalised 24-hour labour market and the relentless nature of modern work which is blurring the boundaries between work and home and causing work/life balance stresses for many people. A recent survey by Microsoft found that today, 80 per cent of the population have at least one smart device with an average of 21 applications, 23 per cent do work while socialising with their closest friend and 50 per cent use a smart device in bed!

Controversially, new technology is also allowing managers to track and monitor their workers. New wearable devices such as smart wristbands and fitness trackers, available for as little as $20, allow managers to easily track the location and work rate of their employees and to monitor their health and mental well-being, even outside of work. According to recent research, many firms in the construction industry are now offering their staff wearable fitness trackers raising, legitimate concern about the invasion of workers’ privacy and intrusions into personal lives, not out of true concern for their well-being but in the pursuit of maximum profits and productivity and a more perfect workforce that does not become ill.

Finally, there is some good news for companies facing skills shortages and loss of experience from an ageing workforce, and for all those baby boomers who may be reeling from recent collapses in their pension returns. New technologies will likely also spell the end of retirement as we have known it, by allowing over-65s to become part of the invisible human cloud which does not discriminate on the basis of age.

Let’s finish on a positive note and learn from history. Looking back to the industrial revolution, the evidence clearly shows that on balance, while some manual jobs and professions will be replaced by new technology, it will create more jobs than it will destroy by creating new alternative industries in knowledge intensive sectors that supply, manage and rely on this technology. The challenge for Australia is to position itself favourably for these changes and to shape the future rather than let it shape us.

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  1. Barry B

    This is the inevitable downside of the current wave of technological innovation – many human workers will be rendered completely obsolete.

  2. Dave

    Excellent article, worth the read.