The G20 summit took place in the Argentine capital Buenos Aires at the end of November and high on the agenda was the future of labour in a digitalised economy. Will the onset of AI and robotics spell our redundancy as a working species?

This prospect has engendered a pessimism in many Western countries that is not shared by most Chinese. Indeed, according to a survey compiled by the Dentsu Aegis Network, just 18% of British and German citizens feel that new digital technologies will create job opportunities over the next five to 10 years. In China, a country with a labour force of around 800 million, 65% of people believe that AI will create even more work.

Government backing

This may be because few governments are embracing the digital age with as much gusto as the Chinese Communist Party. In July 2017, China’s State Council set the country the goal of becoming the world’s primary AI innovation centre, aiming to have an AI industry that produces in excess of RMB 1 trillion (USD 147.7 billion), by 2030.

This enthusiasm seeps right down to the municipal level, with local governments especially keen to support startups working in the sector.

“The business environment in China and especially Shanghai is very attractive for our business,” says Stéphane Truong, founder of Actionable Data, an AI consultancy services company. “I see a lot of initiative from several city districts, including collaboration with incubators to propose ancillary services, organising competitions to offer financial subsidies, and providing a flexible fiscal policy.”

Shanghai has been singled out as a particularly important potential hub for the AI industry. Photo credit: Joe Barnes/Jericho

But it is Beijing that provides the most fecund environment for tech startups. Indeed, the capital’s Zhongguancun district is dubbed China’s “Silicon Valley” due to the number of startups located there. Its proximity to China’s two premier academic institutions, Peking and Tsinghua Universities, make it a happy hunting ground for new talent.

Humanity’s increasing redundancy?

One of these startups is Oriental iFly, whose objective is to use AI to create an automatic grading system for essays, providing instant feedback to teachers on students’ work and saving them time marking.

I asked one of the company’s product designers, Kailin Xie, whether the effect of this might not be to put teachers out of work.

“Well teachers aren’t hired specifically for grading submissions,” she counters. “As long as there are students, teachers will be necessary; grading is just a complementary part of the job. With our product a teacher can save tens of hours on a whole class’ essay marking.”

I persist – is a school likely to pay those teachers the same amount for less work? Or will it instead use those extra hours that teachers now have free to give them more classes, thus reducing its personnel requirements?

These could well be some of the defining moral questions of the digital age. Should companies merely use AI to increase productivity and profits, or do they also have a duty towards their employees?

Could the rollout of AI affect traditionally labour-intensive manufacturing industry further? Photo credit: Wikipedia Commons/Flickr/Chris.

Business optimism

Amongst China’s tech community, there appears to be a belief that these problems will simply sort themselves out. This is certainly the attitude of Stuart Leitch, founder of, a Seattle and Shanghai-based software company that uses AI to improve customer engagement with online products. “Firms have a very bad habit of hiring people for bad positions. These aren’t bad people, but the jobs they’re hired for are wasteful: lots of repetitive, brainless, low-value work.”

“We expect to release people from those positions and reduce the cost of that kind of work so that those people can do something meaningful. On balance we expect to create jobs across industries, not put people out of work.”

He says that he plans to expand his seven-strong team considerably in 2019.

But what of those manufacturing jobs that have been the backbone of China’s economic growth? Many of these are likely to go, says Denny Xu, Vice President of the Shanghai Haihe IT Company, which produces Intelligent Speech Robots.

“AI will change future employment trends and patterns. Now, the labour force is too costly, and lower-level labour will be largely replaced by AI-related technology. But humans won’t be completely substituted; the human-machine coupling will become a future trend for enterprises and businesses.”

Skills gap

The challenge, then, becomes one of retraining. It appears that thousands of jobs are being created. In fact, far from being redundant, one constant complaint from business leaders and recruiters is the dearth of human beings with the necessary skills to fill them. 

Stuart Leitch notes that “it’s especially difficult to find talent on the development front. Since the skills most in-demand at our business are hard data science and machine-learning skills, we’re finding that we need PhD-level candidates and there are few enough of them. As a result it may be necessary for progress to just hire go-getters who can learn quickly but don’t necessarily have experience.”

Stéphane Truong at Actionable Data has similar issues. “The company would ideally employ candidates with at least a Masters degree in Computer Science. We offer a very competitive package … however the battle for talents is tough as talents are more attracted to work in a mature company.”

Investment in education

With such a limited talent pool, it is always likely that Chinese domestic tech giants like Alibaba and TenCent will attract the best of the talent.

However, China has stolen a march on other countries in realising the role that education will have to play in digitalising its economy. Beijing has ploughed investment into computer science programmes at its major universities, and this is slowly starting to bear fruit.

Tsinghua University had more citations in the maths and computing disciplines than any other in the world between 2013-2016. Much of this is down to money: professors, whilst not earning as much in the US, are still offered over USD $100,000 per year, making China vastly more competitive academically.

US News even ranked the university as the number one computer science institution in the world earlier this year. That China is now competing with Western universities in this vital field is an immense achievement and will be the key to unlocking AI potential in the country.

After all, says Denny Xu, “AI is a new technological field; millions of young people with dreams will choose to work in this area.”


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