Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 257

Robots and AI will automate workplaces at a frenzied pace

Believe it or not, a motion to the European Parliament recommends that autonomous robots be deemed 'electronic persons'. The motion suggests that self-learning robots, those that make independent decisions and interact freely, be held to have an 'electronic personality'.

The proposals in the 2017 motion aren’t as bizarre as it might seem because companies are already ‘legal persons’. Such a status means businesses can be held responsible for damages and can insure against such costs. Giving the same status to robots before they become ubiquitous in the workplace and elsewhere would allow likewise.

Even so, about 150 experts in science, law, ethics and other fields slammed the recommendations as inappropriate, ideological and non sensical in a petition to the European Commission. A core complaint was that deeming robots as ‘persons’ would absolve from liability the humans behind a malfunctioning robot.

Political challenge of robots and AI

The legal status accorded to robots is one of countless political issues policymakers must resolve ahead of an expected leap in automation driven by gains in artificial intelligence and robotics. The biggest political challenge arises if the automation likely during the ‘fourth industrial revolution’ were to cause massive unemployment – and a huge number of jobs are thought to be at risk. A just-released OECD study says that 46% of jobs in 32 developed countries are likely to be “significantly affected” by automation over the next 20 years. Other (but not all) studies offer similar forecasts.

Economically, automation will make sense, especially in ageing societies where shrinking workforces put upward pressure on wages. Boston Consulting Group, for instance, says that automation, once installed, cuts manufacturing costs by up to 20%. Robots and algorithms will thus boost productivity and in general, long-term living standards.

At a political and social level, however, the ramifications of automation could be fraught. Robots and algorithms are poised to destroy countless low- and semi-skilled jobs. While they will create jobs, these jobs are likely to be of the type (higher- and lower-paying ones) that hollow out the middle class. The social safety nets in place to limit any populist backlash against automation and society’s ability to retain the displaced appear inadequate to cope with any lasting increase in unemployment and inequality. To stop political disgruntlement nullifying automation’s economic benefits, policymakers will need to find better solutions than those offered so far, such as taxes on robots, jobs for all or universal basic income. It could be this era’s defining political challenge.

Room for more optimism

Some caveats. A lasting rise in joblessness due to automation is just speculation. It may never happen. Warnings about automation are perennial. The mistake the pessimists usually make is to underestimate the number of jobs that advances create. Many service jobs are immune, even if robots might help these occupations.

The challenge for policymakers, though, is that the upcoming automation threatens to be unprecedented in terms of scale and speed. While the rise of robotics and artificial intelligence herald a more prosperous longer term, fewer opportunities and reduced financial security for voters could jolt politics in unpredicted ways in the nearer term.

Policymakers can see that the dangers of the ‘gig’ economy are likely to demand greater government intervention against market forces. They have time to find solutions.

 

Michael Collins is an Investment Specialist at Magellan Asset Management, a sponsor of Cuffelinks. The full version of this article is available here.

 

  •   6 June 2018
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

AI is running ahead of its ethical issues

Why the US economy is stronger than you might think

Will AI destroy investor capital?

banner

Most viewed in recent weeks

It’s time for LICs to die

A high-profile dividend cut and a prominent fund manager’s apology have reignited a long-running debate. If investors can access similar exposures more cheaply and efficiently elsewhere, what exactly is keeping LICs alive?

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

Is it time to bail on Australian stocks?

For generations, Australian investors have backed banks, miners and dividends. But has that loyalty come at a cost? A look at the numbers raises an uncomfortable question about where future returns will come from.

The new capital gains tax trap for your portfolio

Investors have long accepted one portfolio rule without much question. A major tax shift could change that calculation entirely, forcing difficult trade-offs between risk, discipline and an overlooked cost lurking beneath.

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Latest Updates

Retirement

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

2026 is not 1999

The US market looks eerily similar to the dot-com era with soaring AI spending and tech giants dominating returns. But one difference separates today’s boom from the dot-com bubble and it could determine what happens next.

Planning

Taxing time for trusts

Trusts are facing a shake-up, but an overhaul may not be necessary. Families can explore restructuring strategies that preserve succession and the asset protection benefits that have made these structures valuable.

Economy

Why the US economy is stronger than you might think

War, inflation and higher rates were expected to derail America. But has the market got it wrong? Three forces are driving the economy beyond expectations, revealing implications for stock prices and portfolio positioning.

Gold

How much trust is in your portfolio?

Everyone talks about diversifying assets. Far fewer think about diversifying trust. As inflation, debt and market assumptions collide, the question is whether portfolios need greater protection from unexpected outcomes.

Retirement

Retirement in reality - 7 months in

Seven months into retirement, I'm still uncovering surprises. This month was spent reflecting on the slow pace of health change, the myth of neatly scheduled part-time work and the unexpected persistence of retirement guilt.

The new geography of technology leadership

The next chapter of technology may not belong to the companies or business models many expect. As the landscape shifts, some opportunities are emerging in places that remain surprisingly overlooked by global markets.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.