Recessions fuel adoption of new technologies1 min read

The results from research into automation highlights how recessions fuel adoption of new technologies and eliminate low-skilled jobs.

Writing about the findings Brookings wrote, “Several economists have outlined this cyclical nature of automation. Nir Jaimovich of the University of Zurich and Henry E. Siu of the University of British Columbia reported that over three recessions in the last 30 years, a whopping 88% of job loss took place in “routine,” automatable occupations—meaning such jobs accounted for “essentially all” of the jobs lost in the crises.”

In terms of the pace of adoption, researchers discovered that “automation happens in bursts, concentrated especially in bad times such as in the wake of economic shocks, when humans become relatively more expensive as firms’ revenues rapidly decline. At these moments, employers shed less-skilled workers and replace them with technology and higher-skilled workers, which increases labour productivity as a recession tapers off.”

Even though this research specifically looked into the Americal job market, the insights aren’t specific to any one economy or region.