Risk and Readiness: The Impact of Automation on Provincial Labour Markets

The process of technological progress is one of creative destruction, where some occupations, skills, products and firms become obsolete and are replaced by technologically superior alternatives. This process, facilitated by trade, improves overall economic growth and raises living standards in the long run. In the short run, however, it risks igniting economic and political tensions as some businesses fail and some people lose their jobs. At the same time, new jobs are created and the skills required to perform others might change dramatically. Given historical trends of employment, it seems unlikely that all occupations that are highly susceptible to automation will be replaced by smart machines over the next few years. As the demand for skills in the labour market continues to grow, however, there is room for public policy to moderate the effect of technological change on the labour market in a number of ways. Each province faces slightly different challenges when developing policy to confront a technologically advanced and uncertain future. Some provinces, with more economic diversification or a concentration of workers in areas that are not very susceptible to automation, appear to be better situated for technological change than others. In developing policies to facilitate the transition to a high-tech future, provinces that face a higher risk of labour market disruption might require a broad-based approach, while those facing a lower risk of disruption might be able leverage existing policies and expand educational or unemployment support where necessary. Differences in the composition of employment and skills levels across the country highlight priority areas that provincial governments should consider in developing education and employment policy responses to adapt to current and future technological change. Disruption as a result of technological change is not a uniform process, so the policies to tackle it similarly should be not be uniform, but should take into account each region’s strengths and weaknesses.