Automation and e-commerce are set to phase out 80 percent of transportation and warehousing jobs and 63 percent of sales employment, says Oxford University
Roughly 80 percent of jobs in transportation, warehousing and logistics and 63 percent in sales are likely to disappear due to automation, with retail employment also at a high level of risk, according to Oxford University researchers.
In a study focusing on the impact of automation on e-commerce and the wider wholesale and retail sector, the university’s Oxford Martin Programme on Technology and Employment found the impact of digital commerce systems was only beginning to be felt.
‘Much of the disruption is yet to come’
“Much of the technology disruption is yet to come,” wrote Carl Benedikt Frey, co-director of the programme, and post-doctoral researcher Chinchih Chen.
They cited the fact that younger consumers, those most likely to buy via e-commerce platforms, are only now entering their “peak spending years” and said the penetration of automation remains “quite low” as yet.
“Technological progress in sensors, data, and software are as important as that in robots and drones to enable this automation,” they wrote. “Some of this technology is only just now reaching commercial potential (and some is still on the drawing board), meaning that the full impact of technology has yet to be felt.”
Other enabling factors include broadband and mobile device penetration, they said, citing the fact that in Japan 32 percent of all goods bought online were purchased on smartphones in 2016, up from 27 percent a year earlier.
The study, ‘Automating e-Commerce from Click to Pick to Door’, is the third in the programme’s ‘Technology at Work’ series, following a 2013 report that predicted automation would replace 47 percent of US jobs over the next two decades.
‘Downfall of retail employment’
The high figure for transportation, warehousing, and logistics jobs reflects their relatively low-skilled nature, the report said.
As for retail, the study cited a PWC report from March of this year that found jobs in wholesale and retail were 44 percent at risk from automation. The retail sector has the highest employment share in the UK, and the estimated 2.25 million jobs at risk from automation was the highest number at risk in any sector.
“Unlike manufacturing jobs which are highly concentrated, the downfall of retail employment will affect every city and region,” the Oxford study found.
It said US companies employ 2 million staff for stock and order fulfillment work alone, with 90 percent of warehouse picking currently done by hand.
While the replacement of warehouse staff by robots is “not yet either capable or cost effective in all cases, this is likely to change,” the study said.
The e-commerce industry faces constraints of its own, however, including the availability of warehouse space and the sharp growth of light goods vehicles on the roads. Kilometers travelled by such vehicles in the UK were 47 percent higher in 2015 compared to 2000, while those travelled by passenger cars were only 5 percent higher.
And e-commerce adoption is “by no means uniform”, either, with one-hour delivery available in parts of the US and Europe but average delivery times of nine days in Brazil.
“While e-commerce penetration is 87 percent in the UK, it is only 18 percent in Romania,” the report said.
The report found that in the US the sales jobs at risk make up 6.1 percent of total employment, with the at-risk jobs in transportation and material moving adding another 5.1 percent.
“Looking forward, the impact of trade on American jobs is likely to diminish, while the impact of automation is likely to increase; the reason being that a substantial share of non-tradable jobs are exposed to automation as a result of recent technological advances,” the report concluded. “The prediction of President Obama, that, ‘The next wave of economic dislocations won’t come from overseas, it will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete,’ is thus likely to be proven accurate.”
Do you know all about broadband and the ultra-fast future? Try our quiz!