COVID-19 And Nationalism Are Rocket Fuel For Automation

Automation technologies have been widely used in high-value industries such as auto manufacturing for many years. Combining software, AI, computer vision and robotics, production lines now see robots outnumber humans, particularly where tasks are repeatable and require precision.

In other sectors, adoption of automation has been slower.  Walk past a construction site, witness our food being harvested or visit most factories and you will encounter a scene dominated by people. But this is about to change, driven by the combined forces of COVID-19 and nationalism.

COVID-19 and nationalism have a multiplying effect in reducing the available workforce. COVID-19 achieves this through stay-at-home orders and physical distancing restrictions which make it impossible for businesses to operate at capacity. Nationalism does it through policy and an unwelcoming narrative that reduces the flow of migrant workers across borders to meet seasonal demand. Labor shortages in the agricultural sector are already well documented in the U.S. and the U.K.[1][2].

Business owners are rightly concerned. Without employees, their operations will cease to exist. Hoping for a change to the political landscape seems like folly. Whilst political trends ebb and flow, there is little indication that we will quickly move back to a more liberal, globalized outlook. In fact, COVID-19 has increased the likelihood that we will move more towards a nationalist, protectionist agenda, with a current focus on the repatriation of critical industries and securing supply chains.

This somewhat bleak picture poses an existential challenge for many companies that rely on large numbers of people. If they cannot secure staff, they will either file for bankruptcy or be forced to find an alternative.

This significant pain point for companies is an opportunity for entrepreneurs. Not only is their pain point abundantly clear (a lack of workers), but it is supported by short, medium- and long-term trends that ensure it will persist. In addition, the pain killer (the technology to automate many of the tasks that humans do) is now at a sufficient level of maturity to conduct even the most demanding tasks.

The commercial balance has also tipped in favor of machines, with technology costs falling and labor costs rising. Return on investment calculations now look far more attractive. Where companies cannot secure workers at all, they look irresistible.

It is the beauty of our vibrant, dynamic economy that we continue to adapt and respond to the challenges we are presented with. The current situation is no different. Technology companies and more traditional ones will increasingly work together to build our homes and offices, to secure our food supply, to produce the goods we need, and much more. This is something we should rightly celebrate. It makes rapid recovery from the pandemic far more likely that at any time in history.

However, a word of caution. Policymakers must carefully monitor the impact of this technology on the labor market. Today, it is clearly welcome. Tomorrow, we may be creating an economy without sufficient jobs for those who need them or be reversing important gains in areas such as diversity and inclusion.  That is a much wider debate, but one we must not lose sight of even in these most challenging of times.

[1] USA TODAY

In California farm country, growers struggle with labor shortage

[2] foodmanufacture.co.uk

Coronavirus: UK faces farm worker shortage as migrant labour falls