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international civil servants in Geneva

Exploring the implications of automation for jobs and places
Exploring the implications of automation for jobs and places
25 Feb 2020

It is a hot topic in most societies. This reflects existing issues such as unemployment, inequality and – in Europe and US – stagnant living standards

It is also a response to the emergence of new business models often based on platforms such as Uber or Upwork. Beyond this there is the debate about the potential impact new technologies such as AI and robotics will have on employment.

Media outlets are drawn to big number predictions about the impact of technology. But while prophesying mass unemployment may make for guaranteed headlines, there is a wide range of varying predictions, even for the same sector or the same technology. A recent MIT Technology Review overview of the research is surely right:

There is one meaningful conclusion: we have no idea how many jobs will actually be lost to the march of technological progress

Yet perhaps there is a prediction we can make, namely that the process of technological change now unfolding, referred to by some as ‘the fourth industrial revolution’, will follow a similar pattern to previous changes obeying what is known as Amara’s Law (after Roy Amara, cofounder of the Institute for the Future). This states that:

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run   

This is indeed the conclusion of one of the more convincing surveys of the research, undertaking by consulting form PWC. This predicts three waves of automation – the ‘algorithm wave’ over roughly the next five years, ‘the augmentation wave’ across the 2020s and the ‘autonomy wave’, which will fully impact by the mid-2030s. The challenge is that each wave will be bigger than the last; the comfort is that this gives plenty of time for economies and societies to adapt.

One of the inherent problems with prediction is uncertainty about business models. We can be sure that, like IBM and Nokia before them, many companies will respond to technological change by radically rethinking how they seek to create value. Some will succeed and most will fail, while one aspect of today’s economics of technology seems to be the trend towards market domination seen in companies like Google, Amazon and Facebook.

Indeed whole sectors will shift business model in ways we can’t yet predict. This is, after all, what has happened to the music industry. A decade ago, with the advent of streaming and the ubiquity of pirating, it was widely assumed that it would become almost impossible to make money by creating and selling music. Not factored in was the growth in live music – even in a country with the unreliable climate of the UK the number of major summer music festivals as gone from single figures to several hundred – or the increase in listening through mobile devices. The industry has changed; some – for example, CD disk manufacturers – have lost out while others – like streaming service Spotify – have won, but as a whole the music business is thriving. But there is a broader problem with prediction as well as a lesson to be learnt.

A growing backlash against globalisation

We are seeing a growing backlash among the public and some politicians against globalisation. It wasn’t supposed to be this way. Before the 2008 financial crisis, its champions of globalisation had a self-confident and strident message with a number of elements:

  • Globalisation (particularly financial globalisation) is unstoppable – don’t even try
  • Globalisation will make us aggregately richer, so the losers need to accept their fate and adapt.
  • The price of globalisation will include things we might once have valued – like aspects of national sovereignty – but this is inevitable and ultimately to be welcomed.
  • Although globalisation seems complicated and sometimes perverse, ordinary folk don’t need to worry because, not only is it guided by the hidden hand of free markets, but it is being overseen by clever finance experts   

Things have certainly changed. Indeed, there is a serious debate about whether globalisation has even been benign at the aggregate level. From the IMF to the OECD, most experts and observers see now that the case for globalisation has to be made in more humane and less hubristic terms. Yet listen to today’s evangelists for the transformative power of technologies like social media, machine learning and robotics and you may recognise the tune:

  • Technological change is unstoppable – don’t even try
  • There will be victims of change like those in outdated jobs but they must accept the inevitable because things will be better in the end  
  • The price of technological progress may involve giving up things we care about – like professions, privacy, protection of our children, the capacity to raise taxes – but this is a price we have to pay.
  • Technology is very complex but ordinary folk don’t need to worry because it has its own logic and its implementation is being overseen by clever Californians who wear jeans and care about the future.

Is it surprising that the popular discourse about technological change is so often couched in terms of threat and disruption? 

This is why in my report on future employment commissioned by former UK Prime Minister Theresa May I argued strongly that our starting point needs to be a commitment to ‘good work’ as part of the good society. In that report I offered five reasons for a national commitment to good work; renewing the social contract, promoting health and wellbeing, boosting productivity, encouraging active citizenship and managing the impact of technological change.

The Government has responded positively to the report and has, among other measures, committed for the first time to being accountable for the quality of work in the UK economy as well as its quantity. As chief executive of the RSA – an independent global organisation which is a platform for ideas, a think tank and social movement of change makers – I am continuing to focus on the future of work. This is about exploring the implications of automation for jobs and places but it is also about developing the kind of policies we need to help people cope and thrive in a world of fast change and new types of work; policies like universal basic income on which the RSA is part of growing global network of advocates.

It may not happen as quickly as some are saying and it certainly won’t happen in precisely the way anyone is describing, but over the next generation the world of work and the work of the world will change dramatically. In responding to that change we need to spend less time trying to predict the future and more time shaping that future, using progressive values and innovative policies to ensure that change is in the interests of humanity as a whole. 

* Matthew Taylor @RSAMatthew is the Chief Executive of the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) and was the Chair of the UK Government Review of Modern Employment Practices.
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