Thursday, October 24, 2013

No One is Automatically Irreplaceable?

Erik Brynjolfsson
MIT Sloan Management

Bad news for technophiles who automatically expect robotization to solve the world's burgeoning demographic problem by increasing productivity as birth rates plunge (e.g., the Japanese). David Rotman reports on "How Technology Is Destroying Jobs" (MIT Technology Review, June 12, 2013), a close look at the pessimistic insights of Erik Brynjolfsson:
Erik Brynjolfsson . . . , a professor at the MIT Sloan School of Management, and his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that impressive advances in computer technology . . . . [have] been destroying jobs faster than . . . creating them, contributing to the stagnation of median income and the growth of inequality in the United States [and] . . . . other technologically advanced countries . . . . In economics, productivity -- the amount of economic value created for a given unit of input, such as an hour of labor -- is a crucial indicator of growth and wealth creation . . . . [P]roductivity and total employment in the United States . . . . after World War II . . . closely tracked each other, with increases in jobs corresponding to increases in productivity . . . . Then, beginning in 2000, . . . productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears . . . , showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the "great decoupling." And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs . . . . [This is] a startling assertion because it threatens the faith that many economists place in technological progress. Brynjolfsson and McAfee still believe that technology boosts productivity and makes societies wealthier, but they think that it can also have a dark side: technological progress is eliminating the need for many types of jobs and leaving the typical worker worse off than before. ­Brynjolfsson can point to . . . . [the fact] that median income is failing to rise even as the gross domestic product soars. "It's the great paradox of our era," he says. "Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren't keeping up."
Not everybody agrees with Brynjolfsson, as Rotman goes on to show, but the possibility that robot automation 'steals' jobs from workers is intuitively plausible, even wholly persuasive. The big question is whether or not it will eventually give rise to more jobs, as technology has done in the past.

Read the article to form your own opinion . . .

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