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Technological Progress and Human-Machine Synergy

Apr 01-2025   



*This article is based on a speech by Li Lixing, Professor of Economics at the National School of Development of PKU.

 

Human-machine synergy refers to how people use new technologies. Economics studies resource allocation and distribution issues. It is the production mode of how the various elements of the combination of various elements, such as machines, physical, mental, management and other elements of the combination.

 

The Impact of Technological Progress on Industries, Occupations & Work Tasks

The impact of technological progress is first seen at the industry level. Different industries respond to technological progress in different ways, and industries can therefore be roughly divided into three categories: firstly, industries that produce technology; secondly, industries that are exposed to technology and are able to use it; and thirdly, industries that are little exposed. The first type of industry will certainly flourish, such as IT hardware and software industries; the second type of industry will also benefit, such as e-commerce industry, because the e-commerce industry has high exposure to the Internet technology; the third type of industry in the short term is not directly affected, but due to the relative backwardness of production efficiency, these industries will develop slowly.

Second, the occupational level affected by technology can also be divided into three types of occupations: first, occupations that directly carry out technological innovation; second, occupations that are exposed to technology; and third, occupations with low exposure. The direct impact is that the first group of occupations will prosper, the second group will be replaced and the third group will be little affected. Highly exposed occupations will inevitably have to shift. Our research, based on Chinese employment data, has also revealed that advances in AI technology have reduced occupational diversity at the city level, meaning that some jobs are disappearing.

 

How the Workforce Can Collaborate with Humans&Machines to Cope with Changes

In addition to devoting more of their energy to the tasks that machines cannot do, a working person can learn and upgrade their skills to be more complementary to machines and achieve better human-machine synergy. Furthermore, careers can also change because a career consists of a number of tasks, and innovation in tasks can lead to innovation in careers. In other words, new skills create new tasks and new jobs.

To sum up, in the process of technological progress, those tasks, occupations and industries that are highly productive and benefit from the new technology flourish, become more productive, and their products become more plentiful and cheaper, thus increasing market demand. Other industries, occupations and tasks, even if they are not directly affected, will gradually be squeezed because of their relatively backward efficiency.

From a distribution perspective, technological progress at the level of tasks, occupations and industries will roughly produce three types of effects: a direct substitution effect; the second is through adaptation, the use of complementarity with technology and the indirect promotion effect; and the third is the overall creation effect. When it comes to people, there are also three effects: substitution, complementarity and creation. Some people are directly harmed by technological progress because they possess skills that cannot be synergized and are highly exposed. Some people, those who are better at synergizing man and machine, benefit directly; and all people are indirectly affected, an effect that feeds back through changes in market demand.

Technological Progress and Human-Machine Synergy

Apr 01-2025   



*This article is based on a speech by Li Lixing, Professor of Economics at the National School of Development of PKU.

 

Human-machine synergy refers to how people use new technologies. Economics studies resource allocation and distribution issues. It is the production mode of how the various elements of the combination of various elements, such as machines, physical, mental, management and other elements of the combination.

 

The Impact of Technological Progress on Industries, Occupations & Work Tasks

The impact of technological progress is first seen at the industry level. Different industries respond to technological progress in different ways, and industries can therefore be roughly divided into three categories: firstly, industries that produce technology; secondly, industries that are exposed to technology and are able to use it; and thirdly, industries that are little exposed. The first type of industry will certainly flourish, such as IT hardware and software industries; the second type of industry will also benefit, such as e-commerce industry, because the e-commerce industry has high exposure to the Internet technology; the third type of industry in the short term is not directly affected, but due to the relative backwardness of production efficiency, these industries will develop slowly.

Second, the occupational level affected by technology can also be divided into three types of occupations: first, occupations that directly carry out technological innovation; second, occupations that are exposed to technology; and third, occupations with low exposure. The direct impact is that the first group of occupations will prosper, the second group will be replaced and the third group will be little affected. Highly exposed occupations will inevitably have to shift. Our research, based on Chinese employment data, has also revealed that advances in AI technology have reduced occupational diversity at the city level, meaning that some jobs are disappearing.

 

How the Workforce Can Collaborate with Humans&Machines to Cope with Changes

In addition to devoting more of their energy to the tasks that machines cannot do, a working person can learn and upgrade their skills to be more complementary to machines and achieve better human-machine synergy. Furthermore, careers can also change because a career consists of a number of tasks, and innovation in tasks can lead to innovation in careers. In other words, new skills create new tasks and new jobs.

To sum up, in the process of technological progress, those tasks, occupations and industries that are highly productive and benefit from the new technology flourish, become more productive, and their products become more plentiful and cheaper, thus increasing market demand. Other industries, occupations and tasks, even if they are not directly affected, will gradually be squeezed because of their relatively backward efficiency.

From a distribution perspective, technological progress at the level of tasks, occupations and industries will roughly produce three types of effects: a direct substitution effect; the second is through adaptation, the use of complementarity with technology and the indirect promotion effect; and the third is the overall creation effect. When it comes to people, there are also three effects: substitution, complementarity and creation. Some people are directly harmed by technological progress because they possess skills that cannot be synergized and are highly exposed. Some people, those who are better at synergizing man and machine, benefit directly; and all people are indirectly affected, an effect that feeds back through changes in market demand.