Race Against the Machine

Technology is changing at such a rapid pace that some economists have predicted the “end of employment.” Computers are able to do many of the functions that humans used to perform, from security and crime fighting to journalism. (Many of the routine game summaries you read in the sports section are actually written by software called Narrative Science.) Technology is more reliable, more efficient and more accurate than any human, and after R&D costs have been recouped, more cost effective as well. Is there any way to win the Race against the Machine?

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A 2012 paper by MIT Center for Digital Business researchers Erik Brynjolfsson and Andrew McAfee says that the stagnation of income and employment opportunities in the middle class is because “our skills and institutions have not kept up with the rapid changes in technology.” In previous technology revolutions, like those of the 19th and early 20th century, “millions of people left agriculture, but an even larger number found employment in manufacturing and services.”

But the computer revolution is different; it’s moving faster and affecting almost every industry sector. “General purpose computers are directly relevant not only to the 60% of the labor force involved in information processing tasks but also to more and more of the remaining 40%.” When an entrepreneur built a factory in the 19th century, he created hundreds, perhaps thousands of jobs. The power of processing means that the new companies and products created today may need just a small group of people to reach markets all over the world. The number of jobs needed in the information economy is shrinking and dividing sharply.  Creators with digital expertise are thriving. Low end service jobs are also growing as creators need people to mow lawns, clean houses, and wait on tables. But the middle is disappearing rapidly.

Brynjolfsson and McAfee say that we can reverse this trend if we shift our thinking. The key to winning the race, they write, is “not to compete against machines but to compete with machines.” Unlike natural resources, they argue, information resources – ideas – are not depleted with use; they actually multiply. They can be reused, re-purposed and reinvented, creating new iterations of products and services. They’re also available to anyone, anywhere, anytime via the internet.

The authors write that we must improve our education system, focusing on creativity, leadership and communications skills and layering in competency-based certifications. In other words, we need to amplify the qualities that make us human and master the technology that will help us work alongside computers and robots. I foresee a day when we will all learn programming alongside reading, writing and math. When we encounter a problem that needs solving, we’ll write our own program. If it turns out to work, we’ll offer it for sale to others who have the same need.

I agree with Brynjolfsson and McAfee when they say that we must take technology seriously as part of the slow recovery from the recent recession. “The root of our problems is not that we’re in a Great Recession, or a Great Stagnation, but rather that we are in the early throes of a Great Restructuring.” Financial crises force companies to innovate and cut costs wherever they can; today, that usually mean replacing human labor with technology.

Even low wage workers are not immune to this sea change in employment. Taiwan’s Foxconn, the electronics company that produces Apple products and other technology, announced recently that it will purchase a million robots to replace much of its workforce in routine tasks like painting and assembly.

In his book A Farewell to Alms, economist Gregory Clark writes about a “worker” whose many jobs included agriculture, transportation and transporting troops into battle. The internal combustion engine replace him in every one of these functions. “There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed.” We need to make sure that our next generation of workers do not become the horses of the 21st century.

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