Source: Andrea Piacuadio
In January this year, I attended a talk by Carl Benedict Frey on, the ‘Technology trap in the age of automation’ at the Martin School, Oxford University. In his talk, Carl quoted that 47% of all jobs are already at risk due to automation. The hard question on that day was around how the increasing usage of artificial intelligence and digitisation will impact our future, jobs and income? Will the rapid pace of digitization increase global inequality and make more people vulnerable? It became increasingly obvious at that point that digitization is a great opportunity for knowledge workers, but middle-income jobs are under serious threat of being taken over by machines; forcing many into lower paying jobs or even exiting the workforce entirely.
Fast forward to March 2020, the acceleration of digitization is now uncontrollable as the corona virus pandemic takes control of our lives. Within weeks, all sectors and levels of workers had to instantly shift to working remotely wherever they are. There was no time to shift gear. We have resorted to an ‘e-world’, from e-shopping to e- schooling and e-socialising. The rapid pace of digitization is admirable, but at the same
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time alarming and even increasingly stressful. Suddenly, most of us, who used to have cultural and technological impediments to digitization and remote working, have rapidly picked up speed and learnt how to use digital platforms for communication, business, and maintaining relationships. Hence, this has become a favourable option that was often remotely favourable before.
At lightning speed, we have entered the era of ‘super-connectivity’ and scaled-up in rich new ways of utilising on-line platforms and tools. Professor Thomas W. Malone during an online webinar session hosted by MIT recently reiterated his concept of the ‘supermind’ where he argued that this is not about AI and robots taking over jobs, but this is an era where groups of humans and computers combined can act more intelligently than ever before. Malone argues that businesses already see the benefits of hyper specialisation, where a complex network of people all over the world perform highly specialised tasks, cheaper, faster and with better quality; cf. the likes of Adam Smith (1776) when he introduced the division of labour and the pin manufacturing example. Also, it emerges that specific cognitive skills such as on-line decision making and working in a decentralised environment may become more prevalent. It appears that it is almost impossible for us to reverse to the old ways as we enter the age of a ‘new norm.’
Yet, the reality may be very different. Only a fraction of people, principally in the West and highly developed Asian countries, are able to work from home during this crisis, i.e. the relatively small proportion of skilled knowledge workers. Thousands of people have lost their jobs instantly. Even in countries such as the United States, people have been on the streets rioting, to be allowed to return to work, as remote working for them is not possible. Many schools and universities could not continue with remote learning as digital infrastructure and facilities are not available. Let alone, in many of parts of the world, such as in Africa, Latin America and India, where people are struggling with basic needs such as food, shelter and amenities. Not all have the facilities and digital platforms or capacity for remote working.
Further, organisations may not be sufficiently agile to cope with this sudden change; and workers with inadequate skills need to be quickly reemployed into a digital type of work environment. This reminds us not only of the catastrophic loss of jobs during the industrial revolution of the 18th century, but of recent examples in the late 1980s when
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thousands of typist and secretaries lost their jobs when we moved from typewriters to computers. Some, managed to weather the change, be retrained and secure new jobs, but many others completely became unemployed. As the pandemic is increasing the pace of digitisation manifold, there is a risk that larger numbers of people will be displaced in a short period of time.
Hence, what will be the future of work moving forward? There are many different predictions, variation of solutions and suggestions thrown at us. It seems that it is too early to predict as most countries have yet to even begin the process of easing the lockdown. Further, thanks to globalisation, as we are now entangled in an increasingly complex international environment, we do not yet know the extent of the real damage that the pandemic has caused to the global economy, the social impact and other challenges that may arise. Economists argue that this crisis is probably as close as, or worse than the 1930s great depression. It seems that many countries are quickly learning from the lessons of the great depression, one of which was the increasing trend of protectionism between states and nations. This made free trade hard, escalated costs and further increased inflation. Quick term solutions included increases in tax, relief programs and food ration cards. The wide spread unemployment at that time had a huge impact on the working class. However, some states, such as the US government, did introduce massive employment programmes, e.g. the Works Progress administration (WPA) that brought 8.5 million Americans back to work.
Thus, this time around Keynesianism must rise again to the occasion through massive fiscal response. Huge government bail outs and expansionary monetary policies have already been announced in many countries at the right time, but this is only to meet near term requirements for businesses and furloughs. Some even question whether the bail-out packages are reaching out to the right groups of people. But that is a different story. Now, the immediate and mid-term plan should be to re-channel and retrain people to be able to pick up jobs in healthcare and medical areas, manufacturing of PPEs and ventilators. Some businesses have to completely revamp their models, re-purpose their existing capability and skills, to adapt to new requirements; restaurants and food chains may have to move to delivery and take-
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away through increased digital technologies, schools and universities need to scale up digitization rapidly to cater to on-line and blended learning. Most organisations have to review cost sharing models, affordability, and senior management have to think through corporate social responsibility and burden sharing. All governments will need to review public service offerings and scale-up innovation; invest further in enhancing digital infrastructure and in capacity building. Unfortunately, none of these measures are going to stop the wave of unemployment and the rapid pace of digitization that is already hitting us. However, this is not the time to assign blame, rather to take collective responsibility for the future world, we all inherit.
Reference:
- CarlBenedictFrey,Thetechnologytrap:Capital,LabourandPowerintheAge of Automation, Princeton University Press, 2019
- ThomasW.Malone,Superminds,LittleBrownandCompany,2018
- Thomas W. Malone, Robert Laubacher and Tammy Johns, the Big Idea, the age of hyper specialisation, https://hbr.org/2011/07/the-big-idea-the-age-of-hyperspecialization
- The Guardia, A Hundred years on, will there be another Great Depression?https://www.theguardian.com/business/2020/mar/21/100-years-on-another- great-depression-coronavirus-fiscal-response, 21st March 2020@ Kogila Balakrishnan: WMG, University of Warwick
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