Author: Neil Harrington
Previous LEAD analyses have considered automation’s potential labor market impacts at the industry and occupational level and examined the potentially disparate experiences by race and ethnicity, sex, and age. This article builds on that line of work by looking at regional exposure to automation.
Regional exposure to automation
Generally, metropolitan statistical areas (MSAs) in North Carolina that are primarily comprised of urban or suburban counties have lower shares of employment in occupations with higher exposure to automation. Nonmetropolitan areas or primarily rural MSAs tend to have higher shares of employment in high exposure jobs, often larger shares than the state.[1] If automation does happen in the jobs LEAD has identified as potentially disrupt-able by machines, it could disproportionately impact rural regions that have already seen less population and job growth than North Carolina’s more urban areas. But some urban/suburban regions of North Carolina also face high exposure and employ far more people than rural areas. Severe disruption in these areas would likely have a greater impact on the larger North Carolina economy.
The varying degrees of exposure to automation-related employment disruptions in North Carolina MSAs reflect their occupational and industrial mix. For example, the Durham-Chapel Hill MSA’s high share of employment in Educational Services and Health Care and Social Assistance—two of the least exposed industries—drive down the region’s overall exposure. The Raleigh MSA also has a large concentration of employment in these industries, albeit to a lesser degree, but higher shares of employment in Retail Trade and Accommodation and Food Services drive up its overall exposure. Conversely, a strong manufacturing presence in the Greensboro-High Point and Hickory-Lenoir-Morganton MSAs contribute to these regions’ high exposure.
Higher exposure does not mean a region has done something wrong or will see widespread job losses. In many cases, the employment that drives a region’s higher exposure likely provides plenty of good paying jobs in the area, like manufacturing employment in rural regions. But regional exposure does let us see where automation could have a greater impact as firms start to implement new technologies, allowing workforce and economic development systems to prepare accordingly.
Regional exposure stresses urgency for preparation
Slightly more exposure in rural areas of the state could spell bad news for regions that are already dealing with slower population increases or, in some cases, losses and lagging job growth. In counties considered rural by the NC Rural Center, population growth has averaged about 10 percent since 2000, and 30 of these 78 counties saw population losses. Population growth for urban or suburban counties averaged more than 40 percent, with none showing population losses. Similarly, North Carolina’s job growth over the past 12 years has overwhelmingly concentrated in the state’s largest metro areas. Nearly 75 percent of the state’s total job growth since 2010 happened in North Carolina’s five largest MSAs in the state—Charlotte, Raleigh, Durham-Chapel Hill, Greensboro-High Point, and Winston Salem.[2] Rural regions might also find it harder to recover jobs lost from automation-related disruptions which could exacerbate some of these trends.
But this does not mean urban and suburban communities will be shielded from automation. Technological advancement’s disruption will impact every region to some degree, as it has previously. Earlier waves of automation and globalization in the 1990s and 2000s decimated employment in more urban areas like the Triad region, and manufacturing’s continued strong presence in urban areas like the Greensboro-High Point and Winston-Salem MSAs and elsewhere in the state introduces more exposure to these regions. Similarly, a combination of large tourism and manufacturing industries in the Asheville MSA contributes to higher exposure in an otherwise strong economic region. These more exposed urban/suburban regions also employ far more people than rural areas, which could mean negative impacts from automation here will reverberate more widely through the state’s economy.
Of course, automation might not lead to disruption that causes mass layoffs. Job responsibilities may just change over time (subtly or dramatically). Or employees may be reassigned to other jobs within a company. But proactive policies can prevent or respond to disruption as it happens and lessen deleterious economic and social impacts. And as we’ve already explored, education and workforce training are central to the prevention of this type of automation disruption.
For businesses in highly automatable industries, state agencies and economic development groups should explore ways to help companies implement new technologies in ways that minimize employment loss while ensuring their survival in their home community and maximizing their potential to compete and grow. A successful partnership between business and NC’s workforce system can help workers transition to new jobs, whether internal or external to the company. The final blog in this series will explore policies like these that diminish the disruption potential from automation.