Good morning, brave new world,
Welcome to the age of thinking machines. From robots and simple automation to artificial intelligence and cognitive compu ting, our lives and work are being transformed in ways we don't fully yet understand. What we know for sure is that having computers and software do many of the tasks that people have always performed will have profound implications for every industrial country and its people, economy, labor force, public policies, and politics.
THE BIG IDEA: A technology revolution will overwhelm the U.S. and other industrial nations in the next five to 15 years that will likely destroy tens of millions of jobs due to automation by artificial intelligence, 3-D manufacturing, advanced robotics and driverless vehicles and other advanced technologies. The best research to date indicates that 47 percent of all U.S. jobs could be be replaced by technology over the next 10 to 15 years, more than 80 million in all.
Mark Carney, Governor of the Bank of England, warned last month that half the British workforce could see their roles disappear because of automation.
“Alongside its great benefits, every technological revolution mercilessly destroys jobs and livelihoods – and therefore identities – well before the new ones emerge," Carney says. "Machines, having already made agriculture and manufacturing techniques obsolete, will next begin "hollowing out" middle-class services jobs."
US factories are booming--but with fewer people. Despite Donald Trump's claims to the contrary, America’s factories are not “rusted-out” and “scattered like tombstones across the landscape of our nation.” In fact, they’re booming.
Because of automation, however US factories are doing all of this while employing fewer people. In fact, they produced 85% more in 2016 than in 1987, with just two-thirds the number of workers.
"The deeper problem facing the United States is how to provide meaningful work and good wages for the tens of millions of truck drivers, accountants, factory workers and office clerks whose jobs will disappear in coming years because of robots, driverless vehicles and “machine learning” systems," writes David Ignatius in the Washington Post. Nor is the trend about to slow down.
Steady growth ahead for industrial robots Adoption of industrial robots in factories will enjoy a compound annual growth rate of 14.4 percent during 2016-2023, according to Frost & Sullivan. Sharmila Annaswamy, industrial automation and process control research analyst at Forrester, says: “The convergence of information technology and operations technology will drive collaborations between robot manufacturers and communication and software providers. By 2023, the global industrial robotics market is expected to reach $70.26 billion.”
What Will People Do? A new McKinsey study estimates that about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies. That amounts to almost $15 trillion in wages.
THE BIG QUESTIONS: How will political leaders and policymakers respond to the inevitable impact on labor in the years ahead? How much of the global movement toward protective policies driven by fear of automation? What are the possible solutions?
1. Let the market economy take care of it. Steven Pearlstein, a Washington Post business and economics writer and Robinson Professor of Public Affairs at George Mason University, writes that "creative destruction" is a natural part of industrial development and that, over time, increased productivity will create more jobs:
In a market economy, nobody plans or manages this bumping-up process — it is the natural dynamic by which market economies become richer as productivity improves. Improvements in agricultural productivity led to a wave of migration of farmworkers to the cities, where they provided the manpower for an industrial economy that eventually become so productive that we could afford to buy more health care, education and, yes, government. Now we are on the cusp of another wave of “creative destruction.” The fact that nobody can say where exactly the new jobs will come from is not unusual, nor is it reason to despair.
2. Guarantee income security through universal basic income Universal Basic Income is an old idea whose time may have come again. It's kind of a Social Security for everybody notion in which all citizens are guaranteed, say, $10,000 a year. The idea is not nearly as exotic as it sounds.
"One striking thing about guaranteeing a basic income is that it’s always had support both on the left and on the right—albeit for different reasons," writes James Surowiecki in the New Yorker. "Martin Luther King embraced the idea, but so did the right-wing economist Milton Friedman, while the Nixon Administration even tried to get a basic-income guarantee through Congress."
The US political climate is not right to undertake such a change at this time but as the threat that robots, driverless trucks, and white collar automation pose to economic security worsen in coming years, it is an idea that is certain to come around again. Politicians that avoid the hard choices by blaming immigration and bad trade deals or by enacting protectionist and discriminatory policies are--to quote the great Jerry Jeff Walker--"pissing in the wind."
Jerry Bowles created and co-founded Social Media Today, the web's first B2B social media portal in 2006, He has written about technology for Fortune, Forbes, Business Week and many others. E-mail: jerry.bowles@gmail.com