The idea of machines taking over the world is a quaint 20th century cliche that never seems to go out of fashion. Movies, books and doomsday articles about robots and computers replacing or enslaving people are as popular as they’ve ever been. Maybe that’s because the core idea is true. Maybe technology really is pushing people aside and taking over their jobs. Or, more accurately, technology is moving too rapidly for many people and organizations to keep pace, forcing them into unscheduled obsolescence.
The high U.S. unemployment rate is in the news daily, but the story is much bigger and more dramatic than that. According to a study by the Gallup organization, there is a shortfall of about 1 billion jobs in the world, and the gap between jobs and people is growing. In addition, jobs are not bouncing back from the latest recession as fast as they have in the past.
Data from the McKinsey Global Institute shows that during earlier recessions, from 1948 to 1981, the rate of job recovery, that is the time it took for employment to reach pre-recession levels, averaged about six months. Recovery from the 1990 recession took 15 months. After the 2001 downturn the recovery rate was 39 months. Recovery from the 2007/2008 recession is likely to take even longer than the last one and by some estimates could still be years away.
What’s going on here? Why is unemployment being so stubborn? Why has the job market seemingly lost its resilience? Two guys from MIT think they know the answer. They pin the blame on digital technology. They credit technology, not just recession, with pushing up unemployment rates and slowing the pace of recovery.
In their new e-book, MIT economists Erik Brynjolfsson and Andrew McAfee assert that rapid technological advances have caused fundamental structural changes in the U.S and global economies. In their view, the digital revolution is like the expanding universe, it keeps moving faster as time goes on, with the result that many workers and organizations are being left in the digital dust.
In Race Against the Machine the authors explain that the list of things humans are better at than machines is shrinking, and shrinking faster than ever. They point out that where once machines were mainly seen as a threat to manual labor, now it’s the information workers of the Information Age who are at risk. The artificial intelligence revolution is doing to white collar jobs in the 21st century what robots did to blue collar jobs in the last century. The new machines are getting better and better at tasks such as pattern recognition and complex communication, tasks once only humans could perform.
Brynjolfsson and McAfee say that about 60% of U.S. workers perform information processing tasks, and that most or all of those jobs are vulnerable to new technologies. They cite as an example the millions of workers in call centers around the world who could lose their jobs to an emerging class of voice recognition software that also understands meaning and context.
They calculate that technology development should be causing the U.S. economy to grow faster than it is. The economy is behaving anemically because companies can’t find employees with the needed high-tech skills to drive expansion. In addition to slowing growth and causing unemployment, the lack of technologically savvy workers is eroding wages. During the past 30 years, essentially the period of the digital revolution, the incomes of the best-educated American workers have risen, while the wages of unskilled workers have tumbled. The trend has accelerated since the advent of the World Wide Web.
Technology has caused similar disruptions to economies and jobs before, notably during the shift from the Agricultural Age to the Industrial Age, but the difference this time, Brynjolfsson and McAfee contend, is the speed of technological change. Economic systems, companies and workers can’t keep up with the changes technology has wrought.
According to the researchers, the basic reason for the decline in jobs is that technology allows fewer people to do more with less. They note that Apple, Amazon, Facebook, and Google together employ fewer than 150,000 people, less than the number of people entering the U.S. workforce every month. Some of the hottest new companies are producing huge revenues with a handful of people. The cloud-based storage company Dropbox, for example, which has 40 million users and is expected to generate revenue of about $240 million in 2011, employs less than 75 people.
Brynjolfsson and McAfee make the case that the only way to reduce long-term unemployment is to prepare the workforce with skills that match the demands of the Digital Age. Education, training and retraining are far more important than they have ever been and will only become more so. The alternative is an increase in the pattern of income erosion and growing disparities in wealth distribution.
In their book, Brynjolfsson and McAfee are bullish on the ability of U.S. companies and institutions to meet the digital literacy challenge. They are convinced the Internet and new information technologies will continue to create new opportunities for individuals and businesses, but only for those that are equipped with the skills and capacities to capitalize on the opportunities. For example, they note that in many areas of commerce technology is tearing down the barriers to start-up and operating costs. It is allowing small companies to compete with large ones on a global scale.
In the authors’ words: “Digital technologies are one of the most important driving forces in the economy today. They’re transforming the world of work and are key drivers of productivity and growth….Our technologies are racing ahead but many of our skills and organizations are lagging behind….Computers are now doing many things that used to be the domain of people only. The pace and scale of this encroachment into human skills is relatively recent and has profound economic implications. Perhaps the most important of these is that while digital progress grows the overall economic pie, it can do so while leaving some people, or even a lot of them, worse off.”
Ed. Note: One of the key characteristics of a Literacy 2.0 worldview is coming to grips with the fact that the race the authors cite in their title is unwinnable. We can’t get out in front of the digital revolution any more than we can stare at the back of our own heads. There is no racecourse. There is no finish line. There is, in fact, no race.
Technology, and the creative spark that allows us to create it, is not a threat or something to be conquered. It’s not trying to outstrip us. Technology is a gift we give to ourselves. It’s a reward for having large brains and opposable thumbs. Technology is not just part of our history, it is our history.
What we have is more a case of friction and drag. The digital revolution is moving forward like a cascading river, taking everyone with it. Those that have the skills are moving at the pace of the current. Those with digital illiteracy issues are bumping and dragging along the bottom.
The current is not slowing down. It is speeding up and creating plenty of new jobs along with it. The jobs will be there. The only question is will there be people capable of filling them?
It’s been clear for a long time that a strong back, nimble hands and basic communication skills are not enough. But now it seems even our talents for information processing and handling are becoming passé. What then are the attributes we need to find work in a bit-centric world?
The answer is pretty simple. In addition to all the fundamental digital literacy skills that technology requires, the Digital Age craves creativity (still a computing weak spot), collaboration (machines can cross-communicate but they can’t inspire each other) and imagination/vision (if computers existed in a world where no humans had ever been, no machine would ever imagine humans). These are the areas where computers need us more than we need them.
If the MIT guys are right, the job market has less need for information wranglers than it did even a few years ago. The job market is hungry for more than the science, technology, engineering and mathematics skills (STEM) needed to build and run the machines. The job market craves people capable of creating, collaborating and imagining.
That is the demand we need to supply if we hope to address unemployment in the short and long term. If we hope to stem the growing gap between the haves and have nots we need to tap our full human potential and do so on a much larger scale than in the past.