Yesterday, Newsnight had a gloomy report about an issue that is shooting up the political agenda: the rise of the robots. The fear expressed by Newsnight’s technology editor is becoming increasingly commonplace supported by books such as Average is Over by Tyler Cowen and Andrew McAfee and Erik Brynjolfsson’s The Second Machine Age.
That fear is ‘robotophobia’ – the notion that millions of jobs will be lost (indeed already are being lost) as artificial intelligence replaces human labour in everything from warehouse management to medical diagnostics. The result will be rising long-term unemployment amongst the middle as well as the working classes and growing inequality as the wealthy get wealthier by replacing expensive workers with cheap robots in the firms they own.
Many are pointing out this is complete bunk. Few doubt that artificial intelligence is a hugely disruptive technology but the notion that such disruption will lead to some jobless dystopia has been predicted many times in the past and has always been wrong.
What the pessimists ignore is the fact that as technology enhances productivity it has two hugely beneficial effects. Firstly, it brings the price of products and services down making them affordable to a much wider customer base than was the case in the past. This enhances the living standards of those who can now afford things once the preserve of the rich and thus allows industries that were previously niche and luxury to grow massively creating new jobs.
Secondly, because of greater productivity and the reduction in the price of many goods and services, money becomes available to be invested and spent elsewhere stimulating the creation of new products and services that no-one had even thought of before thus creating even more jobs.
To take one historical example, electrification and combustion engines were hugely disruptive technologies in the late nineteenth and early twentieth centuries that enormously enhanced the productivity of manufacturing enterprises and led to a great deal of job loss as well as bankruptcies for firms that failed to keep pace with the new technology. But over time these changes led to the mass production revolution which greatly expanded the automotive, white goods and telecommunications markets which, in turn, released investment and created a demand for new and expanded sectors such as marketing, business management, computing and retail. In fact, that manufacturing sector revolution led directly to the creation of what today we call the ‘service sector’. I’ve written about this and other major technological shifts here.
So the real challenge posed by the rise of the robots is not one of a grim, jobless economy but a recognition that we need to respond as rapidly as possible to the new opportunities of this technological shift to avoid as much of the short-term hardship that inevitably results at times of major technological change. That means answering three questions:
What new jobs, services and functions will be required and made possible as areas that were once niche and luxury become available to a far wider group?
There could well be a boom in areas such as legal services, accountancy, investment management, private education and private medicine as artificial intelligence reduces the costs of such services and makes them available to income groups well beyond the wealthy. That could mean a big expansion in the marketing, design, strategic planning, R&D and similar functions serving these areas and the creation of a whole new swathe of jobs that do not currently exist.
What new markets and sectors will be created as investment and consumer spending are released?
A good way to encapsulate this question is to ask what might replace the service sector just as the service sector once replaced manufacturing. I think the key here is a major expansion of the so-called ‘creative sector’ (or what Richard Florida calls the ‘creative class‘). You can already see from the point immediately above how the new roles that could be created by the growth of AI in the service sector are all about adding the element of human creativity that robots cannot replicate.
But there is also already a growing consumer taste for authentic, creative products and services which are clearly the work of a human. A company like Etsy has grown at an extraordinary pace by tapping into this demand and new(ish) technologies such as digital fabrication and social media are allowing people to develop short run products and offer services for which authenticity, eccentricity and humanness are a key part of their appeal.
How can we equip our workforce to generate incomes for themselves from these new areas?
This is the most important question. The real threat from the rise of AI and robotics is not that the world as a whole will descend into inequality and joblessness but that some parts of the world will seize the new opportunities far better than others and that the new markets and new jobs will be created elsewhere. This is, in effect, what happened to the UK in the post-war period when other nations developed their mass production approaches far more effectively ultimately leading to the deep crisis that afflicted the UK in the 1970s and early 1980s and from which some parts of the country have still not recovered.
The focus here has to be on establishing a policy and regulatory framework appropriate to a new era where the full exploitation of human creativity will be the key to the successful workers, companies and economies of the future. It is this creativity that will do what the robots cannot do and what consumers will increasingly crave. McAfee and Brynjolfsson have recognised this themselves (£):
Which human skills will still be in demand? We have yet to see a truly creative computer, or an innovative or entrepreneurial one. Nor have we seen a piece of digital gear that could unite people behind a common cause, or comfort a sick child with a gentle caress and knowing smile. And robots are still nowhere near able to repair a bridge or furnace, or care for a frail or injured person. People will have important roles to play in the second machine age. But the difficulty many companies have in finding the employees they need up and down the skills ladder shows that our education systems are not keeping pace.
So we will need an education system and skills framework that nurtures human creativity above all (not really Michael Gove’s bag) but, I think, we will need to go deeper and understand how areas like our approach to intellectual property, public services, labour market regulation, taxation and a whole host of other areas stands in the way of a flourishing of the creative spirit. In short, we need to have a polity, society and economy ready to release the ‘power to create‘.
Indeed, it may be that it is time to talk about an impending “creativity crisis” unless politicians, business leaders and educators get their act together. This new age of the robots will also be an age of creativity and those economies that are not prepared will suffer while others flourish.