Speculating about Automation's Implications August 2017
Subscribe to Insights in Brief to be notified about new Featured Content as it becomes available!
Artificial-intelligence, big-data, deep-learning, and robotics technologies have become poster children of technological advances, potential productivity boosters, and economic drivers. Similarly, because these technologies have the potential to see use in automating a broad variety of tasks, many people see them as vanguards of commercial and operational changes that will devour a wide range of employment opportunities and therefore lead to economic upheaval, social polarization, and potentially social conflict. These concerns are as valid as are the potential benefits that these technologies might provide. Nevertheless, employment concerns about automation might be misdirected, and a thorough look at potential developments is necessary to consider avenues for addressing emerging changes in the economic and social fabrics. Although employment-related concerns are valid and require an understanding of the dynamics and effects that might emerge as these technologies see adoption and widespread diffusion, two factors deserve consideration. First, easily containing technological advances is likely impossible. And if easy containment were possible, would such a course of action even be desirable? Second, these concerns do not readily provide potential pathways to smooth the effects that such technological changes could have on economies and societies.
Technological advances have always raised the specter of widespread unemployment and related social conflicts. But automation in the workplace, the emergence of the steam engine, and overall industrialization of economies led not to mass unemployment but to increased productivity and, arguably, resulted in elevated living standards for most if not all segments of society, despite difficulties in distributing wealth fairly. One factor that requires stronger consideration is the timeline in which technological advances and their commercial adoption unfold. The steam engine required a long period to find widespread use, industrialization occurred only gradually until it substantially changed the economic fabric, and even computer technology required decades to unfold its potential to change employment markets. The time such technologies required to unfold their impacts left workers and employees with sufficient time to adjust to changing conditions. Arguably, the majority of existing workers were able to live out their working lives doing the jobs they had trained to do, leaving the acquisition of newly required skills and knowledge to the following generation of workers who grew up somewhat accustomed to the new technologies they had to use during their working lives. In other words, timing requirements of introducing and spreading technological advances were more or less in sync with the timing requirements of educating and training worker generations.
Technological advances have always raised the specter of widespread unemployment.
No doubt, the newest wave of technologies will displace employees by enabling novel applications that take over tasks that humans typically perform; however, this wave will likely spawn a wide range of new employment opportunities at a higher value-added level. But the pace at which new technologies arrive, the speed at which they improve, and the rapidity with which corporations adopt and leverage them have changed dramatically. Concerns exist that education and skill-acquisition advances will be unable to keep up with such a rate of change and that individuals lack the capability to adjust quickly enough to reinvent themselves in such a short period. The true concern now is that structural changes could occur at a pace much faster than that of the natural generational handoffs of employment opportunities. In 2012, Fast Company editor Robert Safian coined the term Generation Flux, spelling out the characteristics of individuals who are looking for employment opportunities in fast-changing economies: "What defines GenFlux is a mind-set that embraces instability, that tolerates—and even enjoys—recalibrating careers, business models, and assumptions" ("This Is Generation Flux: Meet The Pioneers Of The New [And Chaotic] Frontier Of Business," Fast Company, 9 January 2012; online).
The question becomes how to mediate the mismatch between the timeline of technology-induced economic changes and the timeline of individuals' adjusting their capabilities to such changes and acquiring necessary skills. Many segments of the working population will likely be unable to find employment in new fields, because these fields will require knowledge that they simply will be unable to acquire in an appropriate time. Furthermore, making such an adjustment might not prove meaningful for those segments because employers will be able to choose younger talent with the same and perhaps even better qualifications. Rapid structural change, then, will require substantial social and policy changes.
Two options for lessening potentially emerging friction in employment markets are under discussion: the implementation of a basic income and an adjustment of tax policies. Basic income, which provides every citizen with a regular amount of money, could alleviate financial strain on the segments of society that are experiencing negative effects of employment-market changes and reduce the potential for social conflict. The basic-income concept is not new, but serious consideration of its potential implementation is now occurring. For instance, Finland and Ontario, Canada, looked into testing the concept to gain an understanding of its dynamics and benefits. Theoretically, basic income would serve as a safety net capable of addressing unemployment resulting from employees' inability to adjust to new job requirements and companies' inability to retrain employees. The concept could also streamline government services by eliminating a wide range of organizational inefficiencies in administering multiple support services, because basic income would cover the financial needs of a wide range of individuals who currently must prove they have a particular need to receive financial support from governments. Problematically, basic income would not address the physiological and emotional needs of displaced workers. The second option is to adjust tax codes to fit the new reality. Currently, employees pay income tax and must pay into health-care schemes and social security funds; however, job automation could reduce the number of people who are working, thereby reducing the number of people who are paying into the national tax systems that support public services. Therefore, calls for taxing the automation technologies that replace human employees are emerging. Microsoft (Redmond, Washington) cofounder Bill Gates and Deutsche Post (Bonn, Germany) CEO Frank Appel are only two of the businesspeople who believe that taxing automation technologies is a sensible course of action.
Whereas basic income will likely run into opposition from many segments of the working population because of the perception that some people will use basic income as an excuse not to work, changes in taxation will likely see resistance from corporations. Both concepts will face headwinds from policy makers who will be concerned about making drastic changes to established policy frameworks. Nevertheless, accelerating technology adoption that creates increasingly rapid changes in employment markets will require some social and policy adjustments. Such adjustments will ensure that productivity gains from automation will benefit society as a whole and that conflict potential will receive proactive attention.