Economists have become accustomed to associate long-term economic growth with technological progress. Indeed the opening line of the standard textbook in the area states that the: “most basic proposition of growth theory is that in order to sustain a positive growth rate of output per capita in the long run, there must be continual advances in technological knowledge” (Aghion and Howitt, 1998, p. 11).
However, as is often the case, technology advancement is blamed for job losses. A new report issued by The Atlantic Council titled Envisioning 2030 US strategy for the coming tech revolution, looks at industries and public policy where technologies form part of the solution, but also where the emerging technologies pose their own challenges.
The report states:
We are not prepared for the negative consequences of many new technologies or as well-positioned as we should be to take full advantage of the benefits. Emerging technologies are likely to be more beneficial than detrimental, but the opposite could be true if we are not careful.
3D/4D printing and robotics, in addition to synthetic biology, have now reached a takeoff point. We, and others have labeled all of these developments a Third Industrial Revolution.
The convergence and synergies of several broad technologies, particularly nano, bio, IT, 3D printing, artificial intelligence, new materials, and robotics is perhaps the most important driver of what we and others consider a Third Industrial Revolution with the potential to produce even more social, economic, and political disruption than we have ever seen before.
The report strongly urges caution, but paradoxically encourages we embrace emerging technology:
A Third Industrial Revolution (TIR) is emerging that will transform not just production but society itself. The first industrial revolution was the application of steam power to production processes in the eighteenth century; the second was the invention of the modern assembly line at the beginning of the twentieth century.19 Like its predecessors, TIR is changing the way things are made, where and when they are produced, and how they are distributed. It is reducing the energy and raw materials consumed and the carbon footprint of manufacturing. It is changing social relations, creating but also destroying jobs, and altering the relationship of people to production.
It is moving the world from mass production of standardized items to bespoke products to meet the requirements of individual needs. It is also transforming the global economy, providing new opportunities for the developing as well as developed world, and costs if nations don’t adapt.
The authors caution:
Disruption is inevitable and much is likely to be beneficial, but some of the disruption could be harmful, even posing existential threats if not controlled.
The TIR is also raising the age-old question of whether new advances in technology will eventually create a myriad of new jobs and more widely distributed wealth, as has been the case in the past, or will new technologies lead to long-term structural unemployment, exacerbating already high levels of inequality and potentially sparking social instability.
The report does a good job showing how synergies with technologies can vastly improve our lives and cities. But in summing up the report authors indicate:
Ever more capable robots will yield dramatic productivity gains that will wipe out countless jobs and possibly entire professions.
I agree, automation and robotics will displace jobs, but as is the case with all ‘creative destruction,’ new jobs will be found to meet the changing needs of the technological advances. The root cause of today’s underperforming economy remains insufficient spending by households, businesses and governments to fully employ all those who want a job, not to mention outsourcing of jobs to developing countries and migration of low pay workers. And the cure for this is policy measures to boost spending, such as the infrastructure roadmap by the UK Government or the European Vision 2020.
Technology has often been cited as the cause of job losses whilst the benefits can be overlooked, in early 1932, just after the Great Depression, Schumpeter wrote: “It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievement of capitalist production, and not as a rule improvements that would mean much to the rich man. Queen Elizabeth owned silk stockings [in the 16th century]. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort . . . the capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.”