Saturday, June 10th, 2017

Machines may be more efficient and replace tasks, but humans are still vital. Drew Hasselback explains why

The Vancouver Sun

About 180 robots BROMONT, QUE. are doing work that humans used to do at this GE Aviation plant in Bromont, Que., that makes parts for jet engines. But they haven’t replaced the humans. Indeed, the opposite is true. Since a new automated section of the plant ramped up at the start of the decade, the number of people working here has risen to more than 900 from 600.

“A machine is not replacing three jobs,” said Eric Bouchard, senior operations manager at the Bromont plant. “It is reopening those jobs somewhere else because of production.”

The economics are simple. Since GE Aviation’s Bromont plant started using automation in the 1990s, the number of human hours needed to produce output has dropped an average of five per cent each year. That led to the decision to invest $85 million in the plant between 2010 and 2016 to increase automation. GE Aviation says robots are responsible for a 25-per-cent increase in output over those years.

The Bromont experience is a small example of a larger trend occurring in industries ranging from manufacturing to energy to banking: Automation unleashes gains in productivity that can actually boost employment and benefit the economy as a whole, though the experience will no doubt be disruptive for many of those who initially lose their jobs.

Even the Bank of Canada, the keeper of the country’s economy, recognizes jobs will be lost as robots replace some workers. But long-run economic history suggests that the adverse effects of robotization will be short term.

At Confederation, one-third of Canadians laboured in agriculture. Today, that figure is less than two per cent. The rest of those wouldbe farmers seem to have found something else to do while there’s more food available than ever.

In an April speech in Toronto, Carolyn Wilkins, the BoC’s senior deputy governor, said that if you roll back the clock on Canadian manufacturing productivity to what it was 20 years ago, you’d need 750,000 more people to match today’s nationwide manufacturing output.

Yet overall unemployment is down. Fewer people might be working in manufacturing, but more people have jobs overall.

“Productivity growth is the only game in town when it comes to raising the economic and financial well-being of people over a long period,” Wilkins said.

Simply put, greater productivity boosts consumption. As manufacturing becomes more efficient and the time needed to make things drops, people switch their attention to other pursuits, and those usually involve them spreading their money around the economy. More spending means more jobs.

“Clearly, blaming the machines is not the way forward,” Wilkins said. “If we seek out and embrace new technologies while successfully managing their harmful sideeffects, we will create inclusive prosperity.”

To be sure, the benefits from automation that Wilkins describes may take a few years to find their way into countrywide economic statistics. The Bank of Canada expects Canadian labour productivity to improve to 1.1 per cent by 2020 from 0.6 per cent today, but it expects all of that gain to come from a cyclical pickup in investment following the oil price shock.

Yet GE Aviation’s case is an example of what could happen across the broader economy. Employment at the Bromont plant has risen because the firm is making and selling more jet engine parts. It estimates its robots replace at least 35 million tasks a year that humans used to do by hand, such as lifting or assembling parts.

The immediate payoffs at Bromont were ergonomic. Repetitive work can lead to strain, and monotonous work can cause minds to wander.

The machines replace the tasks, but they don’t necessarily replace the people. Humans are still needed to program the machines to do the work. That job is done by teams who figure out how to get the most out of the machines.

“The role has changed from dexterity to technical skills,” said Johanne Jolicoeur, senior human resources business partner at the plant.

GE Aviation, therefore, needs people who have the “soft skills” needed to problem-solve and find efficiencies within the plant. Operations manager Bouchard said the company is specifically looking for people from what he calls the “Nintendo” generation.

“We need people who are not afraid to push buttons,” he said. “People that can play video games or that have iPads, iPhones, of course, in the future, will be a requirement. But we are also looking, big time, for the cultural aspect: having employees that fit the model and the culture that we have, a culture of improvement, teamwork and innovation.”

This new type of technology loving, efficiency-driven employee is expected to be the typical plant worker of the future, and the Government of Canada recognizes it needs to prepare people for a technology-based work environment that is heavily rooted in linear thinking and algorithm-based problem-solving.

“It’s not about humans versus technologies, it’s not about humans versus robots. It’s about how we embrace technology,” said Navdeep Bains, Canada’s minister of Innovation, Science and Economic Development.

The federal government said it will spend $950 million to fund up to five “super clusters” across the country that will link companies with colleges and universities to develop several high-tech industry applications. Functions will include training in advanced manufacturing.

And there’s no question that manufacturing has changed rapidly in a short period of time, and this has had a disruptive impact on Canadian workers. For instance, manufacturing was once the backbone of the Ontario economy. But a study by the University of Toronto’s Mowat Centre found that in the 10 years leading up to 2014, the number of people working in the province’s manufacturing sector fell to just over 10 per cent, down from nearly 16 per cent.

Freer trade and better transportation has led to the creation of globalized value chains. Many firms have moved low-end productivity jobs to low-cost jurisdictions offshore. It’s unlikely those low-cost jobs will ever come back.

But subject to business cycles, the Mowat Centre study found that Ontario’s higher productivity jobs remained in place. The report concluded that Ontario should focus on remaining an attractive jurisdiction for high-tech, advanced manufacturing at the upper end of the value chain.

“This will mean higher-paying manufacturing jobs, more profitable firms, more large firms, more export-orientation, and greater diversity of export markets — all of which will generate more jobs and more GDP for the overall Ontario economy, not just in the manufacturing sector,” the Mowat Centre report said.

For its part, the Bank of Canada is counting on automation eventually contributing to economic growth for a simple reason: it has to. Canada’s economy is in a slowgrowth mode, and the percentage of older workers in the economy is creating an overhang. Something is needed to fill the gap.

“We know this is a reality going forward,” said Stephen Gardiner, managing director in Canada for consulting firm Accenture Digital. “For our clients, this is something that they need to remain competitive and to be able to essentially generate well-being for their employees, their shareholders and the society they are in.”

This automated future involves more than physical robots. Developments in software and artificial intelligence will make it easier for human beings to interact with machines and computers.

Victoria Bovaird, a management consultant at Deloitte, said her firm has just released research showing that 41 per cent of companies have either fully implemented or made significant progress in adopting cognitive and AI technology within their workforce. “Our research is showing that in many cases organizations do it right and it will create new jobs,” she said.

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