An insurance firm in Japan has made more than 30 employees redundant and replaced them with an artificial intelligence system that can calculate payouts to policyholders. Fukoku Mutual Like Insurance believes it will increase productivity by 30% and see a return on investment in less than two years. According to a report by the Nomura Research Institute, nearly half of all jobs in Japan could be performed by robots by 2035.

Whilst artificial intelligence programs can increasingly replace workers, Richard B. Freeman suggests that workers can benefit by owning part of the capital that replaces them. He writes, “Workers could own shares of the firm, hold stock options, or be paid in part from the profits. Without ownership stakes, workers will become serfs working on behalf of robot overlords.”

Marco Vivarelli is optimistic about technological change in his article Innovation and employment. He writes, “Industrial and innovation policies that support research and product innovation, especially in high-tech sectors, can lead to the emergence of new firms and sectors—and new jobs."

For further analysis on innovation and the future of work, read:

• Who owns the robots rules the world by Richard B. Freeman
• Innovation and employment by Marco Vivarelli
• Knowledge spillovers and future jobs by David B. Audretsch

• Gender differences in wages and leadership by Mario Macis
• Maximum likelihood and economic modeling by Gauthier Lanot
• The changing nature of citizenship legislation by Chiara Strozzi
• Inequality and informality in transition and emerging countries by Roberto Dell'Anno
• The economics of mental health by Richard Layard

Visit the IZA World of Labor site for more concise, informative, evidence-based articles across the spectrum of labor economics.

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