David Fuller's view -
Brynjolfsson says companies are in the early stages of figuring out how to retool their processes to take advantage of digital tools such as big data and machine learning. He also says our current method of measuring gross domestic output, and by extension productivity, does a poor job of capturing the value of free goods. “If you’re giving an app away for free that does something you used to pay for, then it’s going to initially make GDP smaller,” Brynjolfsson says.
Hal Sirkin, a senior partner at Boston Consulting Group, points out that robots currently perform only about 10 percent of manufacturing tasks. “We project that over the next 10 years, that might increase up to 20 or 25 percent. So there is a long way to go on that productivity curve.” Sirkin and his colleagues at BCG forecast that by 2025, wide-scale adoption of advanced robots will increase productivity as much as 30 percent in some industries, including machinery and appliance manufacturing, and lower total labor costs 18 percent.
Whatever you believe about Technology’s role in productivity, there’s broad consensus that the outlook for unskilled workers isn’t good. In a speech this November, Bank of England Chief Economist Andy Haldane said he and his staff had modeled the effects of automation on the U.S. and U.K. labor markets and concluded that 80 million jobs in the U.S. and 15 million in the U.K. were at risk.
A BCG report from September 2015 that examined the impact advanced Technology could have on Germany’s manufacturing sector concluded that if 50 percent of companies adopted new tools such as autonomous robots and 3D printing by 2025, industrywide revenue could rise 1 percent, leading to an additional 350,000 jobs. If revenue were to rise only 0.5 percent, however, the result would be a net loss of 40,000 jobs. “It’s a real possibility that if we do nothing, that inequality can get worse and more people end up getting left behind,” Brynjolfsson says. “But it’s not inevitable, and it comes down to a set of policy decisions we make. If through Technology we can create more and more wealth for less and less work, then shame on us if that’s a bad thing.”
New technologies are disruptors, at least initially, especially in the way they reduce costs. There are endless examples which we can recall, and that sentence from Erik Brynjolfsson above provides a useful example:
“If you’re giving an app away for free that does something you used to pay for, then it’s going to initially make GDP smaller.”
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