Automation = inequality

Photo: The Canadian Press

Carolyn Wilkins, Senior Deputy Governor of the Bank of Canada

A senior Bank of Canada official says while the country's poised to reap economic benefits from technological progress — it must also brace for potentially painful side-effects like job losses and greater income inequality.

In a speech in Toronto, senior deputy governor Carolyn Wilkins said Tuesday innovations like artificial intelligence and robotics are expected to help re-energize underwhelming productivity in advanced economies like Canada. Over the longer haul, she added that new technologies should eventually create more jobs than they replace.

However, the fast-approaching changes come with concerns for Wilkins — from the challenging adjustment for the labour force, to the distribution of the new wealth.

She noted how experts predict changes like automation to have downsides, which could include impacts on close to half of all jobs in some industrialized countries within 20 years.

Policy-makers, she added, must get ready to manage negatives like amplified income inequality brought on by conditions that could help workers whose skills are complemented by innovations and those whose tasks are replaced by machines.