The future of labor in a digital economy has become a heated topic alongside the emergence of artificial intelligence (AI). Will the proliferation of AI and robotics herald human redundancy as a working species?
This prospect has inspired pessimism in many Western countries that is not shared by most Chinese. Indeed, according to a survey compiled by the Dentsu Aegis Network, just 18 percent of British and German citizens feel that new digital technologies will create job opportunities over the next five to ten years. In China, a country with a labor force of around 800 million, 65 percent of people believe that AI will create even more work.
A major factor is that few governments are embracing the digital age with as much gusto as China. In July 2017, China’s State Council set a national goal of becoming the world’s primary AI innovation center, aiming to foster an AI industry that produces in excess of one trillion yuan (US$147.7 billion) by 2030.
Such enthusiasm has seeped right down to the municipal level, with local governments especially keen to support startups in the sector.
“The business environment in China and especially Shanghai is very attractive,” says Stéphane Truong, founder of Actionable Data, an AI consultancy service company. “I have seen a lot of initiative from several city districts such as collaboration with incubators to propose ancillary services, organizing competition for financial subsidies and providing a flexible fiscal policy.”
But Beijing has perhaps created the most fertile environment for tech startups. The capital’s Zhongguancun area is known as China’s “Silicon Valley” due to concentration of tech startups based there. Its proximity to China’s two premier academic institutions, Peking and Tsinghua universities, makes it a happy hunting ground for new talent.
One startup is Oriental iFly, which aims to use AI to create an automatic grading system for essays that provides instant feedback to teachers on students’ work and saves time spent marking.
I asked one of the company’s product designers, Kailin Xie, whether this innovation might put teachers out of work.
“Teachers aren’t hired to grade,” she asserts. “As long as there are students, teachers will be necessary. Grading is just an extraneous part of the job. Our product enables a teacher to save dozens of hours a week on marking essays.”
Is a school likely to pay those teachers the same for less work? Or will it instead use those extra hours to give them more classes, which would reduce personnel requirements?
Such questions could be some of the defining issues of the digital age. Should companies use AI to increase productivity and profits, or do they also have a duty to improve the day-to-day routine of their employees?
Much of the tech community has adopted the belief that these problems will simply sort themselves out. This is certainly the attitude of Stuart Leitch, founder of Lollipop.ai, a Seattle and Shanghai-based software company that uses AI to improve customer engagement with online products. “Firms have a very bad habit of hiring for unnecessary positions. The employees aren’t bad, but their duties usually involve repetitive, brainless and low-value work.”
“We want to release people from those positions and reduce the cost of that kind of work so those people can do more meaningful things. At the end of the day, we expect to create jobs across industries rather than put people out of work,” explains Leitch.
He has plans to expand his seven-strong team considerably in 2019.
But what of the manufacturing jobs that have served as the backbone of China’s economic growth? Many are likely to go, admits Denny Xu, vice president of the Shanghai Haihe IT Company, which produces intelligent speech robots.
“AI will change future employment trends and patterns,” he explains. “Now, the labor force is too costly, so lower-level labor will largely be replaced by AI-related technology. But humans won’t be completely unnecessary—human-machine coupling will become a future trend for enterprises and businesses.”
To a large extent, the challenge is retraining people. Thousands of brand new jobs are being created. In fact, a growing complaint from business leaders and recruiters is a lack of talent with the necessary skills to fill emerging jobs.
Stuart Leitch notes, “It’s especially difficult to find talent on the development front. Since the skills most in-demand for our business are hard data science and machine-learning skills, we’re finding that we need PhD-level candidates, which are few and far between. It may become necessary to just hire go-getters who can learn quickly but don’t necessarily have experience.”
Stéphane Truong at Actionable Data has similar issues. “My company would ideally employ candidates with at least a master’s degree in computer science. We offer a very competitive package, but the battle for talent is rough because employees are more attracted to mature companies.”
With such a limited talent pool, domestic Chinese tech giants like Alibaba and Tencent usually have first pick of the best talent.
But China’s edge on other countries may be its realization of the role that education plays in digitalizing the economy. Beijing has sunk major investment into computer science programs at its major universities, which is slowly starting to pay off.
Tsinghua University produced more of the top one-percent most highly cited papers in math and computing disciplines than any other in the world between 2013 and 2016. Much of the situation is about money: While Chinese professors still don’t earn as much as their American counterparts, many of them are still offered over US$100,000 per year, making China vastly more competitive academically.
U.S. News & World Report even ranked the university as the number one computer science institution in the world in 2018. The fact that China is now competing with Western universities in this vital field is an immense achievement and will be key to unlocking AI potential in the country.
“After all,” says Denny Xu, “AI is a new tech field—millions of young people with dreams will choose to work in this realm.”
The author is a recent graduate from the University of Oxford.