The nature of work has been evolving rapidly since the 18th century. For over 250 years, waves of economic, social and technological change have swept across the globe, leaving behind the working practices and economies that we have today. Autonomous Information Technology (I.T.), looks to be the next great wave, powering fundamental shifts in our thinking on work and wealth, and disrupting the model of full employment on which prosperous nations rely.
The profound impact these changes could have on our way of life, our economies and our democracies, has observers debating whether this wave differs from those before it. Optimists believe that jobs eliminated by language processing software or autonomous vehicles, for example, will be replaced in other sectors. Pessimists believe that the economic properties and rate of improvement of software today, as well as a worker class unable to defend its interests, lead us towards deep inequality and mass unemployment.
The employment prospects of tomorrow’s workforce is hardly the only debate surrounding autonomous I.T. Indeed, away from the media hype, corporate leaders are rightfully discussing shareholders’ concerns; how will customers and employees react to these changes? What timeline should we use to measure adoption of key technologies? What productivity gains will we see as a result of new technologies?
Given productivity’s role in economic growth, this last question receives special attention.
Since the 1970s, deeper I.T. implementation has driven improvements in productivity, albeit below the historical trend line. But today, productivity isn’t moving at the pace we would like. Between 2004 and 2015, average productivity growth in each of the U.S., U.K. and G7 was far below the 100-year average. The result: slower GDP growth and stagnating standards of living.
While the data on productivity and GDP growth are hard to dispute, opinion is sharply divided on the causes of, and prescriptions for, this slowdown. Optimists believe cyclical factors accounted for lower productivity in recent years, which will soon be outweighed by advances in technology and complementary business processes.
Pessimists believe we are in a period of structurally low productivity, driven by headwinds, like demographic changes, and underpinned by an ‘innovation slowdown’. This view matters, because it challenges both the value of foundational technologies like the internet and big data processing, and the rationale for their continued adoption.
The intersection of these perspectives is a compelling area for further research. If an increasing proportion of jobs are truly being lost to automation, yet productivity growth is remaining stagnant, are we, as the pessimists believe, stuck in the economic doldrums, seeing too little impact from new technologies to accelerate growth? Or is the internet poised to create a new class of general purpose technologies, as electricity did in the early 20th century, which will revolutionize the way products and services are produced and consumed?