At Your Service? by Gaurav Nayyar Mary Hallward-Driemeier & Elwyn Davies

Author:Gaurav Nayyar, Mary Hallward-Driemeier & Elwyn Davies
Language: eng
Format: epub

Increased Role of Automation

The Diffusion of ICT

Unlike for manufactured goods, digital technologies are likely to have a big downward effect on the cost of trading services but an insignificant impact on the labor-cost shares in services (Baldwin and Forslid 2020). This is consistent with a well-established framework that estimates which jobs are at risk of automation based on which tasks computers can execute reliably (Autor, Levy, and Murnane 2003). These tasks are procedural, rule-based activities that primarily involve the organization, storage, retrieval, and manipulation of information that can be entirely codified as a series of precise instructions to be executed by a computer. A large body of evidence, based on data from the United States and other high-income countries, shows that the computerization of such “routine” (or “codifiable”) tasks resulted in job polarization—meaning that high- and low-skill jobs have grown at the expense of many more-automatable middle-skill jobs such as bookkeeping, clerical work, and repetitive production (Autor and Dorn 2013; Autor, Katz, and Kearney 2006, 2008; Goos and Manning 2003).

At both ends of the skill spectrum, services tasks have been more challenging to automate. Among these are cognitive tasks, characteristic of many professional, technical, and managerial services that employ highly skilled workers and emphasize problem-solving capabilities, intuition, creativity, and persuasion. Also difficult to automate are the manual tasks, characteristic of health care, food preparation and serving jobs, cleaning work, and numerous jobs in the personal services sector that are not skill intensive but emphasize situational adaptability, visual and language recognition, and in-person interactions (Autor, Levy, and Murnane 2003).

Yet the prevalence of routine tasks, especially across low-skill services subsectors, means that more than two-thirds of jobs in the accommodation and food services and retail trade subsectors, for instance, are suitable for greater computerization.6 Furthermore, recent evidence is indicative of more widespread ICT adoption across services subsectors, although this is more uneven in LMICs.7

Catch-Up in ICT Use among Low-Skill Services in Higher-Income Countries

The average share of ICT and finance firms with a broadband connection across Organisation for Economic Co-operation and Development (OECD) countries already exceeded 95 percent in 2010. Meanwhile, the average share of retail firms with a broadband connection increased from about 84 percent in 2010 to about 95 percent in 2017, and the corresponding share in accommodation and food services rose from 76 percent to 94 percent over the same period (figure 3.3, panel a).

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