‘Blaming the machines’ not an option: Wilkins
Bank of Canada embracing automation to lift lacklustre economic productivity
The Bank of Canada says Canadians should not be afraid that robots are about to steal their jobs.
Canada’s central bank is counting on automation to provide a much-needed boost to Canada’s economic productivity, said Carolyn Wilkins, senior deputy governor of the bank, in a speech Tuesday to the Toronto Board of Trade. For that to happen, Canadians need to embrace, not shun, the opportunities created by workplace automation, she said.
The bank believes productivity will contribute two-thirds of the average 1.5 per cent growth expected in the Canadian economy over the next few years. “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,” she said. “If we want to continue to prosper, we have to improve our productivity. Clearly, blaming the machines is not the way forward. If we seek out and embrace new technologies while successfully managing their harmful side effects, we will create inclusive prosperity.”
The bank believes Canada’s economy needs to rev up its productivity, which has struggled since the early 2000s. If the productivity performance of the late 1990s had continued at that pace, Canada’s gross domestic product would be 23 per cent higher, meaning an extra $13,000 for every Canadian, she said. “Our underwhelming productivity performance since the early 2000s has cost us dearly.”
Automation may be the answer to productivity, but the bank acknowledges that technology and automation can displace some jobs in the short term. Wilkins cited studies by McKinsey & Company and the Brookfield Institute that suggest around 40 per cent of tasks currently done by humans could be automated.
As machines replace humans, policy-makers should confront the disruption with programs that foster skills training, education and continuous learning. Trade protectionism, she said, would be a big mistake because it would disrupt supply chains and reduce incentives to compete. “The risk of growing protectionism is something that concerns not only me, but everyone at the bank.”
But Canadians should not expect a dystopian future in which machines make workers obsolete, she said. Technological change has been part of the economy since Canada was founded 150 years ago. Automation has not generated a sustained rise in unemployment. As technology has replaced some human jobs, it’s also created productivity gains that have led to other employment opportunities. A century ago, agriculture made up one third of all the jobs in Canada. That has shrunk to less than two per cent today.
As productivity gains enhance the output in sectors such as agriculture and manufacturing, costs for consumer goods decrease so people have more money to spend on other goods and services. Adjusted for inflation, the average income per person in Canada is up 20-fold since Confederation. “People’s spending appetite tends to grow along with productivity,” she said. “This phenomenon is observed not only in Canada but also in other advanced economies.”
Not every job could face immediate change, she said. Some jobs call for skills that won’t be mastered by computers any time soon, such as personal interaction, flexibility, problem solving and common sense. She said that for now, humans should continue to be the best personal care workers, plumbers, consultants and — she joked — central bankers.
If we seek out and embrace new technologies ... we will create inclusive prosperity.