Ontario not automating enough: Report

Technology essential, greater focus needed on training, retraining, say experts
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 06/25/2018

With global competition rising and the workforce aging, technology is essential to improving productivity and expanding Ontario business models, according to a report.

But to effectively embrace automation, provincial stakeholders need to forge a path benefitting both businesses and workers, concluded Better, Faster, Stronger: Maximizing the Benefits of Automation for Ontario’s Firms and People from the Brookfield Institute for Innovation and Entrepreneurship at Ryerson University in Toronto.

Ontario businesses are lagging behind the United States on the adoption and utilization of new technology — at a rate of 57 per cent, according to 2013 statistics.

If this trend continues, both employers and workers could experience detrimental effects, said Sean Mullin, executive director at the Brookfield Institute.

Canada is involved in an open global economy, and attempting to slow the pace of automation would render the nation’s economy uncompetitive. Technological change and adoption are critical, he said.

“Don’t stop the pace of automation. Don’t stop the pace of technological adoption. But try and foresee where your vulnerabilities are from a workforce perspective, and then equip those people with tools to be productive in a kind of future economy, at the highest level,” said Mullin.

“It’s largely been the driver of productivity improvements, and ultimately the rise of living standards, for the past couple hundred years. Without technology, we’d all just be on farms, trying to support ourselves.”

With support from the provincial government, the report examined automation’s impact on two sectors of the economy — manufacturing and finance.

“They’re both very important sectors of the Ontario economy, in terms of GDP and employment,” he said. “(Manufacturing) has dealt with this issue for a while, the other is just starting to.”

State of automation

Automation has the potential to substantially disrupt the labour market for the next 20 to
30 years, especially in manufacturing — an industry pillar in southwestern Ontario, according to the report.

Yet the themes of “impending doom” and “dystopia” are losing steam as the conversation moves along, said Graham Taylor, associate professor at the University of Guelph in Ontario and Canadian research chair in machine learning.

“We tend to talk about massive job loss or disruption, but I think what’s going to be happening is more nuanced,” he said. “Overall, I think it’s going to be more good than bad with these technologies that are coming.”

“I think we’ve moved the discussion beyond the existential risk towards ‘How do we make the systems fair, less biased and safe?’” said Taylor. “It’s less existential fear and more recognizing that these systems are among us.”

Ontario firms recognize that technology is essential to improving productivity and product quality, but adoption is hampered by a variety of factors, including cost and risk aversion, as well as a limited supply of workers with the skills needed to implement, operate and maintain the new technologies, according to the report.

The looming retirement of many existing workers — and subsequent loss of institutional knowledge — is another factor, it said.

While the conversation to date has been polarizing, the truth often lies somewhere in the middle, according to Ryan Gariepy, co-founder and chief technology officer (CTO) at Clearpath Robotics in Waterloo, Ont.

“Some people are saying, ‘Automation is the future and don’t worry, because new jobs will be created and it’ll all be just fine.’ And other people are saying, ‘No, we can’t automate because there will be job losses, and that’s a bad thing,’” he said.

“Automation is the future and there will likely be job losses — in some areas, significant job losses — and we need to support our populace to make sure that that remains a positive impact for us.”

If retrained properly, employees working in dull, dirty or dangerous jobs will benefit from automation, said Gariepy.

Need to retrain

A greater focus is needed on retraining Ontario workers — and quickly, he said.

“This is an immediate juncture,” said Gariepy. “Everyone is moving very quickly and we can’t allow the spectre of medium-term job displacement or technological unemployment get in the way of needing to be competitive as a country.”

“That being said, it’s very important to recognize the impact that that has on the Canadian population, and retrain. Retraining is necessary just from a social perspective, and it’s also necessary to continue allowing Canadians to move the puck forward.”

“If we do not, then we’re in a much more precarious situation as a country.”

According to the report, the response to both employer and employee needs requires collaboration between businesses, post-secondary institutions, training organizations and, in some cases, unions.

“There’s only so (much) that an individual organization can do,” said Gariepy. “If your individual organization has an entire swath of employees who are being effectively put out of a job very quickly because of new technology, then I couldn’t realistically say that the employer should be responsible for retraining them into a completely different field.”

In that type of scenario, the responsibility would shift towards government, he said.

In theory, it is easier for employers to retrain an employee already within the company, said Gariepy.

“They’re already trusted. It’s usually cheaper to do so just at the bottom line than having to lay them off and then rehire someone into a new role that may not work out. But there’s limits there.”

In designing supports for workers affected by automation, it is important to consider available pathways towards retraining, said the report.

“If you already have good workers, and you can retrain them into new roles as business needs evolve, that’s going to give you a competitive advantage,” said Mullin. “Also, from a social safety net perspective, that will probably be less disruptive.”

“All the evidence from economics shows it’s way more costly to the individual if you get laid off and then you have to retrain and get a new job versus continuing to upgrade your skills as you go along,” he said.

From our perspective, that would be a great thing to see more and more employers figure out… but they need to understand how these models work, and figure out the return on investment. So there’s a role for everyone to prove that these models are both good for the worker and good for the employer.”

Advice for HR

While Canada is a leader in research and education in terms of AI and machine learning, some larger companies are experiencing “a bit of a panic” in the “race to establish prowess,” said Taylor.

“There’s tons going on in this field,” he said. “The problem now is almost to sift through it all, because there’s just so much hype around it right now.”

“With any boom, there’s lots of people selling stuff that you don’t need. I don’t know if I would try to race to establish a new AI research division, like a lot of bigger companies are doing.”

“I would look at building skills from within your existing workforce.”

Appropriate preparedness is essential for HR practitioners, said Taylor.

“Ensure you have either internally the people that can train, or access to professionals that can come in and train on these topics,” he said.

“Focus on your workforce — their talent — because if you’re training them, you’re giving them resources. Then they can also help to be more discerning about the types of products and services that are being brought to HR, the CTO or people that are making decisions on processes internally.”

Automation is contributing to changing skills demands, lowering the need for transactional tasks while simultaneously
increasing demand for skills that are both soft and technical, according to the Brookfield report.

As a result, reverse co-op programs — where employers send workers back to university — are gaining in popularity, according to Taylor.

“This is something a good number of companies have expressed interest in, and some universities are starting to run these sorts of programs.”

It remains difficult to predict the future, but HR would be wise to look for “pockets of vulnerability” within individual workforces, said Mullin.

“Can you figure out a pathway to retrain or upskill? It’d be much better if we started pioneering or testing those things out now, than waiting for the disruption to occur. Then we’re trying to play catch-up.”

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