Tech Insights
Chandimal Adikari
May 26, 2020

Social Impact of Automation and Universal Basic Income

Social Impact of Automation and Universal Basic Income

Change caused byautomation in the last few decades in industry and lifestyle, is exponential.Common consumer goods such as mobile phones would have been luxury items ifthere was no automation involved and people would have had to wait for monthsor years until they can buy a car after placing an order; not to mention thefact that only a few would have been able to afford them.

Generally, automationhas made production more efficient, i.e. cheap and quick production withouthaving to worry about human errors. In the service sector, implementations suchas accounting software, self-help sections and intelligent chatbots limitedhuman involvement. In agriculture production has been increased because ofautomation. Automation has let us enjoy luxury, which only the royalty was ableto experience a few centuries ago, thus showing that there is a social impactassociated with this as well. Let’s look at the path of Automation and AIbefore we discuss about its social impact.

About ten thousand yearsago human race survived by hunting and gathering. People only wanted to coverthe basic needs such as food, water and shelter. They spent most of the daytimehunting and searching for food. Around 7-10,000 years ago, people identifiedplants that yield a harvest, grew them in places easily accessible anddomesticated animals for food. It was the beginning of agriculture. Humans hadfreed up the time they spent on hunting and gathering so they focused on makinglives better.

People used to live insmall clusters called “villages” and exchanged their expertise for products orservices to make a living. Thus started the “division of labour”. With thedivision of labour most humans mastered skills and had their lives depended onit, which made the society more efficient.

Beginning ofAutomation

Humans gradually movedto using machinery to make their tasks easier and enhance production. This moveescalated in the 18th and 19th centuries with the “Industrial Revolution”.Different types of jobs opened up; production capacity was increased;production cost was lowered significantly. People had money and goods were cheaper,therefore economic growth was high. Organisations were competing with eachother to offer quality products and services for cheaper prices to promote themand earn more profits.

In order to manufacturea product at a lower cost, its components’ cost should be minimised. Labour isone of them. In order to reduce the cost of labour, automation was introduced.According to Mikell Groover, Professor of Industrial and Manufacturing SystemsEngineering at Lehigh University, USA,

“Automation, orLabor-saving technology is the technology by which a process or procedure isperformed with minimal human assistance.”

Evolution ofAI

This transformation ofautomation initiated recent Industrial Revolution which is known as “Industry4.0”. Modern automation applications can learn complex cognitive tasks, whichwere performed by humans before, because of Artificial Intelligence. In otherwords, there is more possibility to substitute someone’s job with ArtificialIntelligence. In order to stay in employment, employees have to constantlyimprove their skills. However, adaptability of AI is very high compared tohuman adaptability with new skills. For e.g. AI AlphaGo defeated 18-time worldchampion Lee Sedol in “Go”, a complex, ancient Chinese board game in 2016. (Gois a very complex game, it has more possible combinations than estimated no ofatoms in entire universe.)

Free Money?

About a decade ago,Natural Language processing was a challenging task. Most of the time NaturalLanguage Processing applications needed human intervention for better results.However now, AI is not only able to understand the words a person is saying,but also has the ability to understand the emotions. Tasks like transcribing ismade easier by AI. On the other hand, a person who did transcribing for a jobis now replaced with more efficient machines which can do the same job,cheaper. With the speed of current improvements in AI some futurists likeRaymond Kurzweil estimate it to have human level intelligence (TechnologicalSingularity) around year 2045. What will happen next?

There is a limit forhuman adaptability with changing technologies. Clearly, adaptability differsfrom person to person. This gives rise scary thoughts of running out of jobsfor humans in the future. Then, how are we to make a living? Actually, you canmake a living by doing “nothing” at all with Universal Basic Income! (UBI)

Universal Basic Incomeis the unconditional, non-withdrawable income paid to every individual of acountry without considering their other socio-economic status.

“No matterwhat your income is, you will receive free money from the Government”

For an example, if agovernment decides to pay $1000 a month to every individual, every citizen ofthat country will receive it. They can spend it on anything they wish for whichis legal. You can also do your job for an extra income. So, will it causeeconomic hardship for the government? Apparently not, government will raisemoney from direct taxation from the companies who are highly autonomous. Also,with increased cash flow, indirect taxation income will also be improved.


There were severaltrials done in Europe, USA, Canada and India. The amount an individual receivesand the criteria to decide that, were different from programme to programme.From those studies, it has been observed that, living standards were improvedand most of the money was spent on essential expenses and education. Also,former 2020 democratic presidential candidate in the USA, Andrew Yangemphasised on Universal Basic Income in his campaign; he called it “FreedomDividend” and claimed every American adult will be granted $1000 a monthirrespective of their income. Even though he suspended his campaign in early2020, this can be identified as a significant milestone in global politicalcontext, for UBI as a response to job displacement by automation.

The Future

It is now clear thatautomation is adopting faster than humans in every work environment. Hence,there are two options as a human; adopt faster or find an alternative solution.Currently most people choose the first option as there are many fields where AIis not in par with the humans. However, it must be remembered that these areaswill get limited day by day. Universal Basic Income is just one solution for thisproblem. Number of solutions for this problem is only limited by the thinkingcapacity of humans or AI. In order to survive in the future, we must evaluateour options for tomorrow, today.

In the next blog postlet’s discuss how the economy works with UBI.