The theme for this year’s World Economic Forum gathering in Davos was the Fourth Industrial Revolution. The idea goes that we are in midst of, or depending on who you ask, on the cusp of another revolution in industrial production and design, this one driven by ever-deeper levels of automation, machine learning, new materials and 3D printing and related technologies. The Fourth Industrial Revolution is poised to disrupt and potentially de-center manufacturing, transportation and even service, and therefore eliminate or transform millions of jobs. Estimates vary but as many as 47% of American jobs could be affected.
Working and Living in the Fourth Industrial Revolution
The extent to which the Fourth Industrial Revolution is a describable and distinct revolution is debatable – arguably we’re still living through the industrial revolution, which has been ongoing since its start – but what isn’t debatable is the impact that automation and machine learning will have, and is already having, on the world of work. Jobs as different as academic and legal research, financial planning, auto repair and customer service are all under pressure from the trend towards more and more automation.
By now, most analysts agree that articling, that hideous legal rite of passage, may soon be a thing of the past. In Canada, law firms have been slowly turning away from forced articling for years. Why have an unpracticed student do research that a computer can do faster and better?
Customer service jobs have been disappearing for decades, replaced by self-checkouts and automated phone systems and made redundant by advances in product and inventory management systems. At the same time, they increasingly require a level of technological savvy that previous generations of workers couldn’t have brought to the table.
Richard Florida’s “creative class,” those engaged in innovation, design, and creative production, whether it be in the arts or sciences, are the least likely to be affected by the Fourth Industrial Revolution – because their jobs can’t be automated. Of course, his creative class overlaps neatly with Davos attendees and those we consider to be among global elites. What this means is that the benefits of the Fourth Industrial Revolution will be concentrated among existing elites. A new UBS report says that globally and locally, the impact will be benefits to elites and increased overall inequality.
“Many labour-intensive firms should be able to boost profit margins as they substitute costly workers for cheaper robots or intelligent software … For nations, the largest gains from the fourth industrial revolution are likely to be captured by those with the most flexible economies, adding a further incentive for governments to trim red tape and barriers to business.
Automation will continue to put downward pressure on the wages of the low skilled and is starting to impinge on the employment prospects of middle-skilled workers. By contrast, the potential returns to highly skilled and more adaptable workers are increasing.”
Those middle-skilled workers, largely in clerical and customer service work, are a working to middle class group that’s under more pressure from technological change than ever before. Just as the erosion of manufacturing jobs in the 1980s and 90s pushed millions of blue collar men out of unionized work and into less stable conditions, the disappearance of clerical and customer service jobs, largely held by women, will have steep consequences for workers and working families. This push towards automation not only erodes jobs, it pushes down wages and decreases the bargaining power of workers who can be replaced by robots and AIs.
The impact of the Fourth Industrial Revolution will economic, political and social; it will affect everything from regional and global prosperity, to family life, to the practice of democratic governance. For all sorts of reasons, unemployed and underemployed workers are bad for the economy and for society – and that is the inevitable consequence of automation. Larry Elliot, writing in the Guardian, cautions us not to make the mistake of underestimating the impact of this transformation. The third myth of the Fourth Industrial Revolution (the first two are that it will have a minor impact and that the transformation will be smooth), he says, is that
“All will be well provided [by] the fruits of an economy dominated by artificial intelligence and smart robots can be redistributed, perhaps through a citizen’s income so that we can all have more leisure time when machines do all the work.”
The reality isn’t so sunny – after all, what’s the business and political case permanent mass unemployment with millions of people stuck with a guaranteed income but no productive lives? What happens where there’s permanent mass unemployment but no guaranteed income? We already know what happens; we’re seeing the consequences all over the world in migrant worker populations, disaffected youth, and in citizen unrest.
Remember when I said that the existence of the Fourth Industrial Revolution is debatable? If we’re still in the same ongoing, global industrial revolution than we’re still dealing with the same old same old problems of displaced populations, technologies evolving faster than workers can keep pace with, and the elimination of old forms of labour. The industrial revolution gave rise to agrarian and urban political unrest and spurred the growth of socialism and unionism. It also marshalled tremendous human potential and (hu)man power in new and transformative projects, and forever changed the way human labour is measured and renumerated. That transformation never stopped and restarted; it’s been ongoing since we first mechanized textile production. We’ve been dealing with the disruption caused by revolutions in production and capital this whole time.
The consequences of that transformation, both good and bad, are familiar to us, as are the ways we have developed to mitigate its worst effects. Tax credits for employers, state and industry sponsored training programs and welfare are among them. So while we should not, as Larry Elliot says, be dismissive of the impact of the Fourth Industrial Revolution, neither should be believe ourselves to be without resources or understanding. How we have done this so far is through negotiation – between citizens and states, employers and employees, and every combination therein – social programs, and occasionally some enlightened self-interest.
What’s to be done about the coming robopocalypse? Well, we don’t know yet, but we’ve got a few ideas. We need to approach the problem of the Fourth Industrial Revolution with openness to new ideas and the flexibility that constant transformation demands. The world stands to be fundamentally altered, and many of our comfortable truths will go with it.