IBM International Business Machines Corp

By Sam Schechner 

DAVOS, Switzerland -- Big leaps in artificial intelligence are raising tensions among businesses and policy makers over what impact fast-changing technology will have on millions of middle-income jobs.

The economic effect of growing automation on jobs is a big subject of debate this week at the yearly World Economic Forum, where executives from companies who are pursuing artificial intelligence, including IBM Corp., Microsoft Corp., Facebook Inc. and Google parent Alphabet Inc., are gathering, along with political and economic leaders.

Many executives and economists said they believe that the development of machines that can learn and act independently will eventually end up creating more new jobs than they displace, and raise overall prosperity, as have past waves of industrialization. But some said this week that they also worry the spoils of the next revolution could be inequitably shared -- and that the transition to new models of work could be brutal for many workers.

"I don't think you've even really seen the beginning of the disruption," said Marc Benioff, chief executive of Salesforce.com Inc. "The wave of technology will create a big increase in productivity. But we also risk getting a lot more inequality."

Growing global competition, as well as rising automation, has been a factor in anemic job growth and stagnant wages in many Western countries, economists say. A study commissioned by the organizers of the World Economic Forum published this week concluded that annual median incomes in 26 advanced economies fell 2.6% in the period between 2008 and 2013

Several prominent tech executives said they expect that technological disruption will be gradual enough to allow the workforce to adapt to new jobs working along with intelligent or automated systems. "It's not man or machine," IBM Chief Executive Ginni Rometty said Tuesday. "It's a symbiotic relationship. Our purpose is to augment and be in service of what humans do."

There is some precedent for concern. Increased productivity from the industrial revolution didn't initially herald an increase in wages, said Carl Benedikt Frey, an Oxford University economist. Wage increases came some 80 years later after a new generation of workers had developed new skills, he added.

David Autor, an economist at the Massachusetts Institute of Technology, said that many routine jobs in areas like manufacturing have been lost to automation, while growth has come in lower skilled manual jobs, as well as high-end work that also requires more adaptable human intelligence -- polarizing the American workforce.

In the future, some researchers suggest, driverless cars owned by companies like Uber Technologies Inc. could displace drivers, and other types of adaptable software could start to automate some white-collar jobs involving writing or analysis. The equivalent of more than 1.1 billion full-time jobs, including more than 100 million in the U.S. and Europe, are associated with automatable activities, according to a new study from consulting firm McKinsey.

"The challenge is those mid-skill jobs," Microsoft CEO Satya Nadella said Wednesday, adding that he believes businesses should be looking at new social models to avoid social unrest or burdensome regulation.

"We've got to get somehow to this new formula where both the return on capital and the return on labor come together," Mr. Nadella said. "If we don't get it right we are going to have a vicious cycle."

Write to Sam Schechner at sam.schechner@wsj.com

(END) Dow Jones Newswires

January 18, 2017 14:21 ET (19:21 GMT)

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