“Technological innovation should be embraced,” notes Automation and a Changing Economy, a recently published report by The Aspen Institute. “Automation has been a largely positive economic and social force, and looking forward, automation will be necessary to feed, house, and raise the living standards of a growing and aging population.”
But, “While it is important to note that automation’s overall, long-run effect on the economy has been positive - more jobs, more growth, higher living standards - this does not negate the disruptive impact of automation on individuals and communities, which results from displacements, changing skill needs, and income inequality.”
The report is divided into two sections: The Case for Action, which explores how automation impacts the economic security and opportunity of American workers, and Policies for Shared Prosperity, which outlines a policy agenda for addressing automation’s challenges and opportunities. Let me summarize the key conclusions and recommendations in each of the report’s two sections.
The Case for Action
What is automation? The report’s first section includes a brief definition of the term. “Automation generally refers to the use of technology to reduce the level of human activity needed to complete a particular task by replacing or augmenting labor. Key to this concept is that the task itself is still being performed, but with less human labor required as an input. Because automation occurs at the task level, it often changes jobs partially rather than eliminates them, though in limited cases, technology can automate an entire job.”
Automation is just one of the ways that work is disrupted. Entire jobs are sometimes displaced by a new innovation rather than being automated away. For example, the advent of cars eliminated most of the jobs involved in driving horse carriages and caring for horses. Typewriter manufacturing, sales and repair jobs disappeared not because they were automated but because typewriters became obsolete. Technology also affects jobs by transforming entire business models, as has been the case with the advent of online shopping in retail, and of music and video streaming in the entertainment industry.
“Overall, it is difficult to anticipate every disruptive impact technology can have. But the use of technology to automate work is easier to predict than other impacts because automation is based on machines doing currently identifiable tasks. For that reason, automation is the lens technologists, academics, and others use to project technology’s future impact on work, with the understanding that the actual disruptive impact of technology could be broader and more unpredictable.”
The Case for Action reached four major conclusions.
While automation boosts economic growth, creates jobs, and improves living standards, it also presents serious challenges for workers and communities. A number of recent studies have taken a close look at the future of work over the next 10 to 15 years. For example, a December, 2017 report by McKinsey examined in great detail the work that’s likely to be displaced by automation through 2030, as well as the jobs that are likely to be created over the same period. The report’s overall conclusion was that a growing technology-based economy will create a significant number of new occupations which will more than offset declines in occupations displaced by automation. However, many workers will see their jobs change, as future jobs will require different skills.
Moreover, given the increasing importance of talent in our knowledge economy, global superstar firms and cities will continue to attract a disproportionate share of the most ambitious and talented people, presenting serious challenges for the workers and communities left behind, - disrupting local economies, increasing income inequality, and exacerbating economic, political, geographic, and social divides. As McKinsey noted, “while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging - matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.”
Investments in education, training, and the social safety net have helped mitigate automation’s negative impacts in the past. Technology has been replacing workers and improving productivity ever since the advent of the Industrial Revolution in the second half of the 18th century. In past technology-based economic revolutions, the periods of creative destruction and high unemployment eventually worked themselves out. Over time, these same disruptive technologies and innovations led to the transformation of the economy and the creation of new industries and new jobs.
“Investments in education, training, and the social safety net, along with a social contract between employers and workers that provided workplace benefits and protections, have helped mitigate automation’s negative impacts in the past and helped workers succeed in the changing economy.” These investments made it possible for a growing numbers of workers to achieve a middle class life-style and aspire to what we think of as The American Way of Life.
Recent challenges highlight the consequences of limited supports for vulnerable workers. While we are hopeful that the country will once more adjust to technological disruptions, there’s no way of knowing for sure. “Today’s workers are especially vulnerable to the impacts of automation. Financial insecurity, an aging workforce, and falling geographic mobility, make it difficult for many to retrain and transition to new occupations following displacement.”
In addition, “Recent history has seen a reversal of efforts to support workers through economic disruption. Disinvestment in public and private sector training, a weakened public safety net, and reduced access to workplace benefits and protections have contributed to the slow and painful economic adjustment many workers and communities have experienced in recent decades.”
Artificial intelligence and other new technologies may lead to deeper, faster, broader, and more disruptive automation. Technology is being increasingly applied to activities requiring cognitive capabilities and problem solving intelligence that not long ago were viewed as the exclusive domain of humans. As powerful technologies like AI, robotics and machine learning continue to advance, the impact of automation might well be deeper, - dramatically expanding the kinds of tasks that can be automated; faster, - as machine learning enables machines to learn at a much faster rate; broader, - transforming just about every industry and occupation; and more disruptive, - automation may not be any more disruptive than it’s been in the past, but, this time could really be different
Policies for Shared Prosperity
The report’s second section outlines a concrete policy agenda to address four overarching objectives:
Encourage employers to lead a human-centric approach to automation. This includes expansion of apprenticeships, worker training tax credits, regional workforce partnerships, promoting new forms of worker participation in automation decisions, and proactive strategies to identify and address potential issues.
Enable workers to access skills training, good jobs, and new economic opportunities. This includes access to effective and affordable skills training, developing a system of lifelong learning, wage subsidies as necessary, and programs to promote entrepreneurship.
Help people and communities recover from displacements. Support unemployed workers through retraining, reemployment services and unemployment insurance; and promote local and regional economic development through targeted strategies to help them recover and transition and through investments in digital infrastructure.
Understand the impact of automation on the workforce. Collect data and provide better information to key stakeholders so they can better anticipate and get ready for the impact of automation on their industries, communities and occupation.
“Technology is not destiny - the impact of innovation on the American worker is mediated by policy choices and how institutions, such as employers, worker organizations, nonprofits and philanthropies, respond to these challenges. By helping workers take advantage of new opportunities and assisting workers who are acutely impacted by automation return to stable work, we can promote greater opportunity and broadly shared prosperity for all.”
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