Machines Can Replace Millions of Bureaucrats
When it comes to robots displacing humans from the job market, government bureaucrats are generally not what springs to mind. The recent McKinsey report on the future of jobs estimates the automation potential of administrative jobs at just 39 percent, far less than the 73 percent potential for accommodation and food services.
And yet the public sector is one of the biggest potential arenas for such displacement -- and one in which most people wouldn't mind seeing more automation. The reason it's barely happening now is largely, and predictably, an absence of political will.
Since 2013, Oxford University academics Carl Frey and Michael Osborne have done seminal work on automation risks for jobs, quoted by most studies on the subject. Their 2016 work with Craig Holmes and a team of Citibank employees listed some of the most automation-endangered professions:
In some countries, some of the people in these jobs -- such as postal employees -- are public-sector workers. But government clerks who do predictable, rule-based, often mechanical work also are in danger of displacement by machines. In a recent collaboration with Deloitte U.K., Profs. Osborne and Frey estimated that about a quarter of public-sector workers are employed in administrative and operative roles which have a high probability of automation. In the U.K., they estimated some 861,000 such jobs could be eliminated by 2030, creating 17 billion pounds ($21.4 billion) in savings for the taxpayer. These would include people like underground train operators -- but mainly local government paper pushers.
This week, Reform, the London-based think tank dedicated to improving public service efficiency, published a paper on automating the public sector. It applied methodology developed by Osborne and Frey to the U.K.'s central government departments and calculated that almost 132,000 workers could be replaced by machines in the next 10 to 15 years, using currently known automation methods. Only 20 percent of government employees do strategic, cognitive work that requires human thinking -- at least for now, while artificial intelligence is as imperfect as it is. Most of the rest are what the Reform report calls the "frozen middle" -- levels of hierarchy where bureaucrats won't budge without approval from above.
Almost all British government departments have 10 employee grades or more. The department for environment, food and rural affairs has 13. Most of the middle-level tasks are routine and rigidly regulated and motivation is low: Only 38 percent of middle-level bureaucrats say they feel good about what they do. In the U.K., the average civil servant takes eight sick days a year, while a private sector worker takes five. In the last two decades public sector spending rose by an average 3.1 percent a year, about 16 times faster than productivity.
The Reform report discusses how this frozen middle could be thawed. The general idea is to automate information flows and organize remaining employees into project teams that may not even need to be managed. That's not necessarily a good idea, though many companies in the tech sector -- Netflix, GitHub, Zappos -- work like this; informal hierarchies that arise in such an environment can be even more stifling than formal ones. But if work creation is not the goal and efficiency is, the optimal organizational forms will suggest themselves as routine tasks are automated away.
There's also automation potential for so-called front-line jobs where bureaucrats interact with the public. Many people don't want any human contact in these situations, most people want less of it, and nobody enjoys dealing with government services.
The U.K. has one of the biggest public sectors in the developed world relative to population because health care is socialized. A third of U.K. residents say they'd like to book doctor appointments online, but fewer than 7 percent actually do it because the service is either inconvenient or unavailable. Brits often complain of long waiting times for doctor appointments, yet at the same time, a private-sector service called Babylon provides instant online contact with doctors for a 5 pound monthly fee. With some ingenuity, which is lacking today, the British National Health Service could have put it out of business.
Perhaps because Frey and Osborne work in the U.K., their kind of analysis hasn't been applied to other countries' bureaucracies. It should be applicable almost everywhere, though. Unfortunately, bureaucratic hierarchies are famously resistant to change. To seriously entertain such a major shift in the structure of the labor market, governments will first have to promise training or reskilling for soon-to-be-unemployed bureaucrats. That is likely to be an up-front cost that eats into savings made, at least for a while.
Still, some labor substitution of this kind may be inevitable. Shock events like Donald Trump's arrival in the White House could catalyze the change. When a department is plunged into chaos by a lack of senior appointments or a sudden need to prove that it's actually needed, automation is suddenly not suicide but self-preservation.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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