The Impact of Artificial Intelligence on Jobs and Work in New Zealand COLIN GAVAGHAN ALISTAIR KNOTT JAMES MACLAURIN © 2021 The authors ISBN 9780473569204 (paperback) The Impact of Artificial Intelligence on Jobs and Work in New Zealand Final Report on Phase 2 of the Artificial Intelligence and Law in New Zealand Project. COLIN GAVAGHAN ALISTAIR KNOTT JAMES MACLAURIN Funder: New Zealand Law Foundation University of Otago | 2021 CONTENTS Acknowledgements 1 Executive Summary 2 Introduction 7 Chapter 1. Defining the Technology of Interest 10 A. A core component of current AI systems: machine learning 10 B. AI systems in HR and Personnel Management 13 C. AI systems affecting human jobs 17 D. Human jobs created by the AI industry 23 Chapter 2. The changing nature and value of work 25 A. Jobs, work and COVID-19 25 B. Work and wellbeing 27 C. Predicting changes in jobs and work in New Zealand 30 D. Large-scale adaptation scenarios 34 E. Some choices for New Zealand about work and income 40 Chapter 3. AI and the employment relationship 44 A. Recruitment 46 B. Algorithmic management 54 C. Evaluation, monitoring and surveillance 61 D. Health and safety, and worker wellbeing 65 E. Technological redundancy 69 F. Steps and safeguards 69 Chapter 4. Consumers, professions and society 73 A. Accuracy, control, transparency and bias 77 B. Responsibility 80 C. Manipulation and impersonation 81 D. Delegation and handovers 84 E. Trust, empathy and ‘the human touch’ 85 F. Regulatory issues 91 Bibliography 96 ACKNOWLEDGEMENTS We extend warm thanks to Lynda Hagen and the New Zealand Law Foundation for their generous grant enabling our research to proceed. We are most grateful to Joy Liddicoat for extensive research relating to this project, and excellent organisation of our Oxford and Dunedin workshops. We are also grateful to John Zerilli, for advice and comments. We would also like to express our gratitude to the Daithí Mac Sithigh (School of Law, Queen’s following people, who participated in our Oxford and University Belfast) Dunedin workshops on AI and employment in 2018 Rakesh Mistry (Straker Translations, NZ) and 2019: Paula O’Kane (Department of Management, University Gordon Anderson (Faculty of Law, Victoria University of Otago) of Wellington) Mary Ollivier (Director, Regulatory, New Zealand Angela Ballantyne (Department of Primary Health Care Law Society) and General Practice, University of Otago) Jeremias Prassl (Oxford University, Institute of European Matthew Bartlett (Citizen AI, Loomio) and Comparative Law) Christina Blacklaws (President of The Law Society of Gary Rogers (Urbs Media, RADAR) England and Wales) Geoffrey Roberts (Citizen AI) Matt Boyd (Adapt Research, NZ) Paul Roth (Faculty of Law, University of Otago) Hazel Bradshaw (Department of Internal Affairs, Diane Ruwhiu (Department of Management, University NZ Government) of Otago) J Scott Brennen (Reuters Institute for the Study of Ana Luísa Sertã (Department of Geography, Birkbeck/ Journalism and the Oxford Internet Institute) University College London) Elizabeth Broadbent (School of Medicine, University Grace Smart (Ministry of Business, Innovation and of Auckland) Employment, NZ) Pieta Brown (Orion Health, NZ) Jeanne Snelling (Faculty of Law / Bioethics Centre, Corinne Cath (Oxford Internet Institute) University of Otago) Chinchih Chen (Oxford Martin Programme on Technology David Souter (ICT Development Associates, UK) and Employment, Oxford Martin School) Lord Thomas of Cwmgiedd (Lord Chief Justice of Alex Comninos (Justus-Liebig University Giessen, Open England and Wales, 2013-17) Technology Institute) Lena Waizenegger (Business Information Systems, Gareth Cronin (Chief Technology Officer, Ambit, NZ) Auckland University of Technology) Martin Davidson (Chief Legal Intelligence Officer, Richard Wallace (Office of Parliamentary Counsel, NZ) ThoughtRiver, UK) Sara Walton (Department of Management, University Alan Dignam (School of Law, Queen Mary University of Otago) of London) Jim Warren (Department of Computer Science, Kenneth Dau-Schmidt (Maurer School of Law, University of Auckland) Indiana University) Jean Yang (McCarthy Finch, NZ) Becky Faith (Digital and Technology cluster, Institute of Others who were generous with their time and resources Development Studies, University of Sussex) include our Otago colleagues Dawn Duncan (Faculty of Toby Gee (Lambton Chambers in Wellington) Law), Paula O’Kane (Department of Management), Ivan Elizabeth George (School of Management, University Diaz-Rainey (Department of Accountancy and Finance), of Auckland) David Eyers (Department of Computer Science), and Stefan Brambilla Hall (Media, Entertainment and Mele Taumoepeau (Department of Psychology); Fiona Information initiative, World Economic Forum) Ryan at the Ministry of Health; and Ross Teppett at Kai Hsin-Hung (International Labour Organisation) the New Zealand Council of Trade Unions. Sam Cathro, Elliot Jones (Demos, UK) Ruth Jeffries, Caitlin Smith, Jonathon Yedlin and Karen Avalon Kent (New Zealand Council of Trade Unions) McLean provided eagle-eyed proof-reading. Kaska Porayska-Pomsta (University College London Institute of Education) 1 EXECUTIVE SUMMARY Artificial Intelligence (AI) is a diverse technology. It is steps will be required to protect the growing number of already having significant effects on many jobs and workers in precarious employment. sectors of the economy and over the next ten to twenty The history of previous industrial revolutions and the years it will drive profound changes in the way New deployment of other general purpose technologies Zealanders live and work. Within the workplace AI will such as electricity, telephony, and the production line, have three dominant effects. suggests that the deployment of AI will have significant • AI will change how human work is administered in near-term risks including displacement of workers and workplaces: particularly how employers hire, manage transition costs for legacy industries. It will also have and monitor employees. AI is already being used to significant medium-term benefits. It will enhance and rank and interview job applicants, to monitor and make more affordable many goods and services. Overall, assess the performance of workers, and to assign it will exert downward pressure on the cost of living. tasks in gig-economy companies. These uses are Although we cannot accurately predict the numbers likely to grow. of jobs that will be created and destroyed, we can • AI will perform tasks normally performed by humans, predict that New Zealand’s economy and society will augmenting the productivity of some workers and be subject to three countervailing forces: It will enable displacing others. The list of tasks AI can perform is some workers, by enhancing their productivity and long and growing. Such systems include AI-based incomes, and it will replace or displace other workers. robots like self-driving vehicles as well as effector Some of the displacing AI will be owned ‘onshore’, in robots capable of manipulating, assembling, painting, New Zealand, and some of it will be owned ‘offshore’, inspecting and so on. They also include autonomous by large data-rich international entities such as the decision-making / decision support systems widely FAANG companies. We cannot know in advance which used in government and industry, as well as chatbots of these forces will predominate in particular jobs and and other systems that analyse and generate text. industries. So, the challenge for Aotearoa is to prepare • AI will also create new types of work. These will for an unknown mix of the ‘enabling’, ‘replacing onshore’ include high-value jobs like coding and managing the and ‘replacing offshore’ scenarios. As with previous deployment of AI systems as well as low-value jobs industrial revolutions, there is a significant risk that the AI such as preparing data for use in AI training. revolution will increase inequality. Addressing inequality will be particularly challenging if the profits of the AI revolution disproportionately land offshore. How will AI in the workplace We suggest a number of possible solutions to the replacing offshore scenario. These include enhancing change Aotearoa? New Zealand’s sovereign wealth fund to invest in, and hence draw profits from, offshore AI-driven companies We are sceptical of attempts to predict with any that are difficult to tax. We also suggest that New accuracy the numbers and types of workers that will Zealand might identify AI based industries in which either benefit from AI augmentation or be displaced we are well placed to compete, such as social media. by AI in the coming decades. Much depends on Homegrown AI-based services could be promoted via decisions yet to be taken by governments, industries targeted investment or even by government setting up and consumers. We suspect, though, that widespread New Zealand-based companies, as we set up Kiwibank technological unemployment is unlikely, as the cost of to compete with offshore banking concerns. unemployment for individuals is so high that most will choose even low-value, precarious work over no work As the large-scale social and economic effects of AI at all. While AI will create new types of work, we cannot are complex, it is essential that government promotes predict the ratio of high-value to low-value jobs that AI a national conversation about how we want AI to will create. Given the unpredictability of future innovation change life and work in Aotearoa. That conversation and future labour markets, our education system