Small Cities, Big Risks

Automation is coming—will smaller job markets be ready?
Smart Cities Big Risks

AUTOMATION WILL HIT small cities harder than large cities, according to recent research by Morgan R. Frank, a grad student at the Massachusetts Institute of Technology in Cambridge, Massachusetts; Lijun Sun, a postdoc student at MIT; Manuel Cebrian, a research scientist with MIT; Hyejin Youn, an assistant professor of management and organization at Northwestern University’s Kellogg School of Management in Evanston, Illinois; and Iyad Rahwan, a research scientist at MIT.

The researchers analyzed the workforces of American metropolitan areas to calculate what portion of jobs in each area might be automated in the future and found that smaller cities are more at risk. That’s because all cities include workers, from cashiers to accountants, whose jobs are easily automated; however, larger cities have more managerial and knowledge workers, including lawyers, scientists, and software developers. Because knowledge skills cannot easily be taught to a machine, cities that are home to a significant number of knowledge-driven occupations will feel less impact from automation.

The upshot is that small cities could see an exodus of workers, as well as a higher rate of income inequality, since automation is likely to displace the middle class, says Youn. But she adds that even large cities are not immune from the effects of automation when their primary industries rely heavily on jobs that could easily be automated. For instance, card dealers in Las Vegas could soon be replaced by robots.

To quantify the total impact of automation on specific cities, the researchers considered what portion of a city’s jobs boiled down to routine tasks versus specialized expertise. They used a dataset developed by researchers at Oxford University that estimates the likelihood of a particular job being automated and combined that with information from the U.S. Bureau of Labor Statistics on the composition of the workforce in 380 metropolitan areas. This yielded an “impact score” for each city, predicting how likely that city is to be affected by automation.

For example, Boston, which is home to many hospitals and research universities, has a 54 percent impact score, suggesting it is unlikely to be devastated by automation. Other impervious cities on the list include Washington, D.C., and San Jose, California. But other cities face significant risks, according to the calculations of the researchers. For instance, 68 percent of the jobs in Las Vegas and 73 percent in Mayagüez, Puerto Rico, could be automated.

Youn does spot a silver lining: If they know what’s coming, small cities can start to make plans. “If I’m the policymaker in Las Vegas, I have to think about how to reshape my city’s industry to prepare,” she says. At-risk cities might preemptively set up job-retraining programs or create incentives to attract new, high-tech industries where workers cannot easily be replaced by machines.

Youn also points out that while advancing technology has replaced some workers, it also has spurred productivity and innovation for the workers who remain, which can be a boon for a company’s bottom line. She believes it’s important to disentangle the contrasting roles that technology plays in order to predict which industries machines will disrupt next.

In the not-so-distant future, she says, “every task will be some form of collaboration with a machine. The question is: How will this either help or destroy jobs?”

Read “Small cities face greater impact from automation,” published February 7 in the Journal of the Royal Society Interface.