How Automation Is Helping Companies Prepare for Labor Shortages

Even before President-elect Donald Trump said he would pursue mass deportations, rattling industries that rely on immigrant workers, the U.S. had a labor problem. Baby Boomers are retiring and there just aren’t enough people to take their place. This has big implications for the country’s economy, and could potentially drive up inflation as a labor shortage allows workers to demand higher wages. 

Many companies are turning to automation—a solution long feared by some workers—in an effort to thrive in this economic environment.

“There’s just not enough people in the U.S.,” said Aamir Paul, the president of North American operations at Schneider Electric, at a TIME100 talk on Dec. 3 about innovations in artificial intelligence, automation, and sustainable infrastructure in the U.S. (Schneider Electric sponsored the event.) “So if we’re going to keep the GDP growth we require, if we’re going to keep the U.S. this economic engine of the world, we’re going to need to find ways to engage people differently.” 

Schneider Electric and other big companies across the U.S. are using AI and automation to deploy their workforces more efficiently, not only figuring out how computers can do the jobs people don’t want to do but also retraining employees to do work that is aided by machines. Amazon, for instance, recently opened a warehouse in Shreveport, La., that is powered by 10 times more robotics and advanced AI than its previous facilities are—and that creates 30% more skilled jobs for people. Schneider Electric retooled a 64-year-old facility in Lexington, Ky., with the help of AI to reduce energy and water consumption—but all of the work was done by current employees. 

There was a time when talk of AI and automation among big companies in the U.S. would have spurred fear among workers who wondered if their jobs were in jeopardy. But as companies retrain workers and prepare them to work alongside machines, many people are seeing that automation doesn’t have to be scary, Paul said: “You change it from something people fear to something they’re excited about because they can see how their capabilities can continue to contribute.” 

Indeed, people who have feared that technology would displace them have often been proved wrong. Technology may replace some jobs, but it can also create new, better ones. When ATMs were first introduced, bank tellers feared they’d be obsolete, but instead, the new convenience of banks created demand for more bank branches and more tellers.

“We’re not really ready to yield control to machines,” said Daniela Rus, director of the Computer Science and Artificial Intelligence Laboratory at MIT, who was also on the panel. “But with machines around us, we can extend our reach, we can amplify our strength, we can refine our precision.” 

Some people even theorize that the U.S.’s capabilities in automation and AI have helped its economy recover faster than economies in Europe and Asia. After all, the U.S. supply chain has been more resilient and its economy more stable. “The way we came out of COVID as a country, and the economic growth that we're seeing compared to the other global markets, is a significant testament to the automation and build out of capabilities that we've done as an economy,” said panelist Sriram Krishnasamy, chief transformation officer at FedEx. 

The unemployment rate in the Euro Area was 6.3% in October, while the U.S. unemployment rate is currently at 4.1%. The U.S. currently has more people employed than it did before the pandemic, even in manufacturing, which is one sector embracing automation while also embracing its workers at the same time. 

And according to Rus, multiple studies have shown that people working with AI and automation are more productive than people alone at a wide variety of tasks—including coding, inventory analysis, and document editing.

 “We are not really building something that will compete with us,” she said. “We are building something for us.”

TIME100 Talks: The New Industrial Renaissance was presented by Schneider Electric.