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.


 

Leave a Comment:

RELATED ARTICLES

AI is running ahead of its ethical issues

The future of travel

Unearthing small and mid-cap gems

banner

Most viewed in recent weeks

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 606 with weekend update

The boss of Australia’s fourth largest super fund by assets, UniSuper’s John Pearce, says Trump has declared an economic war and he’ll be reducing his US stock exposure over time. Should you follow suit?

  • 10 April 2025

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

Latest Updates

Investment strategies

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Investment strategies

Does dividend investing make sense?

Dividend investing offers steady income and behavioral benefits, but its effectiveness depends on goals, market conditions, and fundamentals - especially in retirement, where it may limit full use of savings.

Economics

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

Strategy

Ageing in spurts

Fascinating initial studies suggest that while we age continuously in years, our bodies age, not at a uniform rate, but in spurts at around ages 44 and 60.

Interviews

Platinum's new international funds boss shifts gears

Portfolio Manager Ted Alexander outlines the changes that he's made to Platinum's International Fund portfolio since taking charge in March, while staying true to its contrarian, value-focused roots.

Investment strategies

Four ways to capitalise on a forgotten investing megatrend

The Trump administration has not killed the multi-decade investment opportunity in decarbonisation. These four industries in particular face a step-change in demand and could reward long-term investors.

Strategy

How the election polls got it so wrong

The recent federal election outcome has puzzled many, with Labor's significant win despite a modest primary vote share. Preference flows played a crucial role, highlighting the complexity of forecasting electoral results.

Sponsors

Alliances

© 2025 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.