By Sir Christopher Pissarides
Ever since the industrial revolution in England in the 18th century, new technology has been replacing human labour. Each technological breakthrough is based on one big new discovery, which can do some things better than humans can. Steam power, the internal combustion engine, electricity and the computer destroyed jobs previously done by humans; and each time new jobs were created that had the potential to make everyone better off. Before the motor car, there were entire professions in major cities based on horse power: breeding, training, maintaining, cleaning after them and supplying their food. All those jobs have disappeared. Are we worse off because of it? Obviously not. Other jobs have appeared connected to motor cars, many more and better paying than before, and a whole new way of living has developed based on travel. Like globalization, new technology can benefit everyone but those who suffer job losses need to be compensated and helped make the transition, otherwise the country will be worse off after it.
Each and every one of us should welcome them because if we know how to handle the transition we will be better off at the end of it.
The new technologies threatening our jobs today are based on the internet, robotics and artificial intelligence. The things that they can do are beyond comprehension; that is where the panic is, robots with AI might be capable of doing things that we don’t even understand. But each and every one of us should welcome them because if we know how to handle the transition we will be better off at the end of it. New jobs will appear to replace the ones that robots destroy because there are still many things that robots cannot do; such as jobs that involve decision making in unpredictable environments. And with robots doing the work, we will be able to work less and enjoy more of the products of the new technology in our leisure time. Companies, workers and governments have to adapt to the new realities for the benefit of society as a whole.
CEOs have to take a broader view of where competition might be coming from, see how they can combine robotics with human labour and be prepared to look outside the box for the things that the new technologies can do. For example, who in the banking business could have guessed that competition for traditional banking business could be coming from a social chat service? There will be many more of such “outside the box” disruptions to our traditional ways of doing business. Workers need to be more flexible in their skills and in the jobs that they are prepared to contemplate, and welcome change because it can make them better off if they handle it correctly. Governments need to make sure that human decency and high standards are maintained in the new work environment and not panic into blocking the advance of new technology. In the new technological era the education needs of a country need to be re-thought and the support mechanisms for workers initially losing out expanded. Change will be more frequent and opposition to change like the one that we have seen recently in connection with globalization has to be avoided.