Where Machines Could Replace Humans-And Where They Can’t (Yet) by Michael Chui, James Manyika, and Mehdi Miremadi, Mickinsey & Co.
The technical potential for automation differs dramatically across sectors and activities.
As automation technologies such as machine learning and robotics play an increasingly great role in everyday life, their potential effect on the workplace has, unsurprisingly, become a major focus of research and public concern. The discussion tends toward a Manichean guessing game: which jobs will or won’t be replaced by machines?
In fact, as our research has begun to show, the story is more nuanced. While automation will eliminate very few occupations entirely in the next decade, it will affect portions of almost all jobs to a greater or lesser degree, depending on the type of work they entail. Automation, now going beyond routine manufacturing activities, has the potential, as least with regard to its technical feasibility, to transform sectors such as healthcare and finance, which involve a substantial share of knowledge work.
hese conclusions rest on our detailed analysis of 2,000-plus work activities for more than 800 occupations. Using data from the US Bureau of Labor Statistics and O*Net, we’ve quantified both the amount of time spent on these activities across the economy of the United States and the technical feasibility of automating each of them. The full results, forthcoming in early 2017, will include several other countries,1 but we released some initial findings late last year and are following up now with additional interim results.
Last year, we showed that currently demonstrated technologies could automate 45 percent of the activities people are paid to perform and that about 60 percent of all occupations could see 30 percent or more of their constituent activities automated, again with technologies available today. In this article, we examine the technical feasibility, using currently demonstrated technologies, of automating three groups of occupational activities: those that are highly susceptible, less susceptible, and least susceptible to automation. Within each category, we discuss the sectors and occupations where robots and other machines are most—and least—likely to serve as substitutes in activities humans currently perform. Toward the end of this article, we discuss how evolving technologies, such as natural-language generation, could change the outlook, as well as some implications for senior executives who lead increasingly automated enterprises.
Understanding automation potential
In discussing automation, we refer to the potential that a given activity could be automated by adopting currently demonstrated technologies, that is to say, whether or not the automation of that activity is technically feasible.2 Each whole occupation is made up of multiple types of activities, each with varying degrees of technical feasibility. Exhibit 1 lists seven top-level groupings of activities we have identified. Occupations in retailing, for example, involve activities such as collecting or processing data, interacting with customers, and setting up merchandise displays (which we classify as physical movement in a predictable environment). Since all of these constituent activities have a different automation potential, we arrive at an overall estimate for the sector by examining the time workers spend on each of them during the workweek.
Technical feasibility is a necessary precondition for automation, but not a complete predictor that an activity will be automated. A second factor to consider is the cost of developing and deploying both the hardware and the software for automation. The cost of labor and related supply-and-demand dynamics represent a third factor: if workers are in abundant supply and significantly less expensive than automation, this could be a decisive argument against it. A fourth factor to consider is the benefits beyond labor substitution, including higher levels of output, better quality, and fewer errors. These are often larger than those of reducing labor costs. Regulatory and social-acceptance issues, such as the degree to which machines are acceptable in any particular setting, must also be weighed. A robot may, in theory, be able to replace some of the functions of a nurse, for example. But for now, the prospect that this might actually happen in a highly visible way could prove unpalatable for many patients, who expect human contact. The potential for automation to take hold in a sector or occupation reflects a subtle interplay between these factors and the trade-offs among them.
Even when machines do take over some human activities in an occupation, this does not necessarily spell the end of the jobs in that line of work. On the contrary, their number at times increases in occupations that have been partly automated, because overall demand for their remaining activities has continued to grow. For example, the large-scale deployment of bar-code scanners and associated point-of-sale systems in the United States in the 1980s reduced labor costs per store by an estimated 4.5 percent and the cost of the groceries consumers bought by 1.4 percent.3 It also enabled a number of innovations, including increased promotions. But cashiers were still needed; in fact, their employment grew at an average rate of more than 2 percent between 1980 and 2013.
The most automatable activities
Almost one-fifth of the time spent in US workplaces involves performing physical activities or operating machinery in a predictable environment: workers carry out specific actions in well-known settings where changes are relatively easy to anticipate. Through the adaptation and adoption of currently available technologies, we estimate the technical feasibility of automating such activities at 78 percent, the highest of our seven top-level categories (Exhibit 2). Since predictable physical activities figure prominently in sectors such as manufacturing, food service and accommodations, and retailing, these are the most susceptible to automation based on technical considerations alone.
In manufacturing, for example, performing physical activities or operating machinery in a predictable environment represents one-third of the workers’ overall time. The activities range from packaging products to loading materials on production equipment to welding to maintaining equipment. Because of the prevalence of such predictable physical work, some 59 percent of all manufacturing activities could be automated, given technical considerations. The overall technical feasibility, however, masks considerable variance. Within manufacturing, 90 percent of what welders, cutters, solderers, and brazers do, for example, has the technical potential for automation, but for customer-service representatives that feasibility is below 30 percent. The potential varies among companies as well. Our work with manufacturers reveals a wide range of adoption levels—from companies with inconsistent or little use of automation all the way to quite sophisticated users.
Manufacturing, for all its technical potential, is only the second most readily automatable sector in the US economy. A service sector occupies the top spot: accommodations and food service, where almost half of all labor time involves predictable physical activities and the operation of machinery—including preparing, cooking, or serving food; cleaning food-preparation areas; preparing hot and cold beverages; and collecting dirty dishes. According to our analysis, 73 percent of the activities workers perform in food service and accommodations have the potential for automation, based on technical considerations.