President Donald Trump has embarked on an aggressive campaign using his bully pulpit to convince company after company to return manufacturing jobs to the United States. He is acting as America’s mayor-in-chief. This effort, laudable as it is, misses the main point: Automation is far more responsible for the decline in manufacturing jobs in this country than trade is. A recent study from Ball State University found that only 13 percent of manufacturing job losses are attributable to trade and 87% are due to enhanced productivity because of automation. Indeed, the United States produces 85% more manufactured goods than it did in 1987, with one-third fewer workers.
This trend isn’t slowing, it is accelerating. Studies indicate that within the next two decades, fully one-half of jobs in today’s economy will cease to exist.
I am not a pessimist or anti-technology – quite the opposite. Breakthroughs in connectivity, artificial intelligence and automation are creating entirely new categories of jobs. Technology is pushing the boundaries of human thought, and helping to engage people who do not currently participate meaningfully in the global economy. I do believe the future is bright… if we manage to the future instead of pining away for the past.
If the ugly 2016 presidential election taught us anything, it is that the dislocation and churn caused by the transition from the industrial economy to the digital one has the potential to generate dramatic political upheaval. When many Americans see their jobs and livelihoods disrupted by technological innovation without a path to how they can participate in this new world, they feel anger, rather than hope; resentment, rather than optimism. President Trump’s call to “make American great again” wasn’t just a rallying cry for those who fear immigrants taking their jobs; it also appealed to those who fear robots taking their jobs. And we should all be scared of this.
If the populist uprisings of 2016 felt like a political earthquake, just wait. As much as technology seems to touch virtually every aspect of our lives today, we are merely feeling the foreshocks of a much larger technological upheaval. The societal repercussions of technology’s impact on the manufacturing sector, which represents only 12.1 percent of the economy have been profound. What will happen when technology begins to more aggressively replace jobs in the service sector? With the race well under way to develop and deploy self-driving trucks within the next several years, America’s 3.5 million professional truck drivers could be out of work in five years. As tech companies make enormous strides in Artificial Intelligence, workers across almost every industry could be threatened. We will see robotic home health aides and cashier-less grocery stores. If the disruption of manufacturing brings us Trump, what will the technological disruption of the other 87.9 percent of our economy bring? I shudder to think. But one thing we know for sure: it will get a lot bumpier from here.
However, it’s not the potential for disruption to the workforce that keeps me up at night. Indeed, history shows that when technology makes one type of job obsolete, it more than makes up for it with new jobs. The advent of ATMs led to an increase in the number of teller jobs not a decrease as the costs of staffing a bank branch fell significantly.
What keeps me up at night is the fear that America has lost its ability to think about the long-term, or even the medium term, and to make the hard and courageous investments we need to ensure that those whose lives are disrupted by change aren’t left in the dust. Smart people are thinking about how the private sector can combat the scourge of short-termism that leads many CEOs to sacrifice long-term growth for short-term gains, but we’re not talking enough about how this failure of discipline and imagination is crippling the public sector.
This short-termism is affecting all aspects of public life, but it is particularly dangerous when it comes to technological disruption, the pace of which is accelerating not decelerating. I certainly don’t pretend to have all the answers to this complex challenge, but here are some things I know we must explore to address the quickening pace of technological “progress”:
First, we desperately need leaders who understand technology, talk about it fluently, and are open to new ideas. The majority of our elected officials are luddites when it comes to technology. Some wear their lack of tech knowledge as a badge of honor. If our leaders don’t understand the scope of the challenges and opportunities we face, they stand no chance of developing the policy solutions we need.
Second, a big part of the answer will come from fundamentally restructuring the way we think about education. We can’t continue to think it’s sufficient for students to attend school once at the beginning of their life just to learn the basic math, writing, and reading skills necessary to find a job that they will hold for the rest of their life. The world is changing too quickly. Children in school today will likely have 3-4 careers over the course of their life. Education and skills training must be a life-long endeavor. Why hasn’t computer programming worked its way into the base curriculum of school at every level? Vocational education has been a loaded term in America for far too long, but the premise of connecting education with real-life skills is essential throughout their life. Let’s talk about bringing back apprenticeships whereby employees simultaneously earn a paycheck and learn the skills necessary to progress beyond their current level of employment. We can also take inspiration from Denmark, which spends 20 times the amount per capita we spend in the United States on worker training and helping unemployed workers back into the workforce.
Third, we should use tax policy to incentivize job creation in rural and small town America. But at the same time, we must also develop programs that help move people to where the jobs are.
Fourth, we need to invest in our cities, which are the factories of the knowledge economy: places where people from all walks of life exchange ideas and experiences and through those interactions develop the advances which power our world economy forward. Companies are choosing to return to cities, where agglomeration economies occur and, as a result, industry-leading clusters to develop. We must invest more into these engines of our economy and support infrastructure upgrades and smart growth policies.
There are solutions to the challenges we face, staggering though they may seem. The nation that settled the West, put a man on the moon and invented the silicon chip can achieve just about anything we put our minds to– but the key is that we can’t lose focus on the long game.