You believe that the current technological revolution cannot be compared to previous revolutions. Why?
Fear for the consequences of technological advancements often comes up in books and studies. In my book I cite The Triple Revolution, an open memorandum composed by activists, scientists and technologists in the 1960s that was sent to US President Johnson. That report warns of three revolutions: growing automation, the weapons race and the fight for human rights.
“The age in which we currently live is really different because machines are now starting to think.”
The age in which we currently live is really different because machines are now starting to think. Artificial intelligence (AI) is getting cognitive powers – something completely different than computers performing computing tasks. So they are now entering human territory. Up to now human capabilities ensured that people were always a step ahead of technology. This advantage has enabled us to deal with the consequences of the spread of technology. But our lead is getting smaller. While this development may just be starting, it will lead to major disruption in 10 or 20 years. And in saying that I am being conservative; in Silicon Valley many people think it will happen in five to 10 years. As far as I’m concerned, the main thing is to acknowledge that this change is heading our way.
You suggest that automation through AI has a large impact on employment. Where will the impact be greatest?
Historically speaking it has always been the simpler jobs that are affected most by automation. However, because machines are also gaining competencies, people’s level of education is becoming less relevant. Systems are now able to perform simple journalistic tasks such as drafting news articles. A lot is happening in the field of legal services and the development of medicine. Not long ago a Japanese insurer (Fukoku Mutual Life Insurance) started using IBM’s supercomputer Watson, which resulted in the loss of a number of white collar jobs: the computer now analyses medical files rather than highly-trained specialists. So automation is no longer just about lower-skilled jobs, but jobs at all levels.
Job losses as a result of automation are often associated with growing inequality. If the new wave of automation affects all jobs, including jobs held by highly educated people, could this result in less inequality?
‘Inequality’ as a result of technology mainly has to do with the frequently cited 1% of American society that earns as much as the remaining 99%. And there are also a lot of highly educated people among that 99%. At the moment, the labour factor is being replaced by the capital factor. People who have access to capital are doing relatively better. For the majority of the global population the value of their labour is their only possession. People’s level of education is becoming less relevant when it comes to inequality.
What are the social implications of this?
“A lot depends on our ability to adapt, but the dominant role of capital can lead to even greater inequality.”
A lot depends on our ability to adapt, but the dominant role of capital can lead to even greater inequality. Large groups of people will be worried about their economic certainties. The effects will differ strongly between countries: in some European countries there is a better social safety net than in the US. The first effects are already visible: look at the political disruption, such as Trump and at Brexit. Naturally globalisation had a huge impact, but technology is now reversing this in some ways.
We still think that a lot of manufacturing takes place in China, but in reality this is rapidly dropping as a result of the use of robots in factories – the traditional type of automation. Adidas and Nike are shifting their production from South-East Asia to highly-developed countries where everything is automated. Globalisation is becoming not only unpopular but also less necessary. In the long term technology will have a decisive impact on how and where processes are performed. In developed countries, the largest changes will occur in the services sector: think of robots in the fast food industry, in retail and in administrative tasks. Developments will happen most rapidly in highly-developed countries, where this technology can be easily accessed.
What is the greatest challenge created by these developments?
Our thoughts on joblessness are still traditional: people lose their job and then find another one after a while. But this will happen less in the future. Social and economic security will have to be redesigned because it will be relevant to a much larger group of people. The social safety net in some countries, like the Netherlands is quite extensive but not available to everyone unconditionally. If benefits are only linked to being employed or unemployed, then working in a low-paid job or switching to an uncertain job will be less attractive.
In Finland, for example, many highly-educated people lost their job at Nokia. If these people want to do something else – such as look for a part-time job or start a company – they would immediately lose their safety net under the existing system in Finland. In Finland they are now taking it a step further by experimenting with a basic income. In the long term I am a supporter of a basic income. You can apply it in different ways but if people earn more when they work, it ensures that they have a reason to develop new skills. In many systems a job does not result in a higher income. It should be the case that paid employment always results in a higher income – and this is always the case with a basic income.
Will countries with an efficient and first-class education system be able to anticipate developments?
In the medium term, the ability to adapt will definitely be an advantage. But this will not apply to everyone. And it is not inconceivable that we reach a tipping point where technology becomes so good that it will be harder to anticipate and adapt. As I said, that edge over technology can only partly be achieved through education. Not everyone can make the transition to work where creativity or deep interpersonal relationships are important, such as in the care sector.
If technology evolves rapidly, economics tells us productivity should grow strongly. But this is not occurring: Why?
Economists place a lot of emphasis on the concept of productivity. It is reminiscent of the philosopher’s stone. Since the 1970s, there has been a disconnection between average wages and productivity. The majority of working people have not benefited at all from the enormous growth in productivity. The proceeds from all innovation and automation go to the 1% and not to the remaining 99%. This begs the question whether economists should continue to focus on productivity. Productivity is defined as proceeds divided by labour. But if labour disappears, for example as a result of automation, productivity should rise to unprecedented levels.
The question that economists should now focus on is whether this is actually true. There also has to be a buying market for that enormous productivity. In the US there is already a gap between production and demand, partly because consumers have less to spend. This is resulting in limitations on production and is turning productivity into more of a social than an economic concept. In addition, technology advancements do not immediately make us more productive. Take travel agents, where you could arrange your whole trip based on a one-hour chat. These days the job of travel agent has disappeared and we can be online for up to eight hours trying to find a good offer ourselves. It would only be interesting again if computers would take over the role of the traditional travel agent and help us book a trip in less than an hour using voice recognition.
The Organisation for Economic Cooperation and Development (OECD) paints a more optimistic picture and asserts that new technology creates new jobs and is mainly complementary to labour: it predicts job losses of just 9%. What do you think of their research?
There are many different perspectives. Researchers at Oxford predicted that nearly half of all jobs are at risk. And McKinsey, which focuses more on tasks than on jobs, assumes that 50% of all tasks can now be automated. Looking back, it is true that human skills and computer technology are complementary. But that will not always be the case. If a travel agent can indeed be replaced by a computer, then we can no longer call it complementary. For many people the role of computers will change from that of a tool into a replacement. This process may take longer than we think, but it is inevitable. The OECD analysis looks mainly at the past – this is something that economists always do. I focus on the future and don’t look much at historical data but at what artificial intelligence will bring.
What does the accelerated development of technology mean for organisations?
Management decisions are increasingly made based on data and algorithms instead of the manager being the decision maker. The Internet of Things is only resulting in more data, more algorithms and more decisions. Many operational decisions are automated. This will lead to an outflow of middle management and organisations becoming more horizontal. Decision making is becoming more complex: developments are happening more rapidly, everything is becoming more interconnected and circumstances are becoming more complex. That means that making strategic decisions is becoming more difficult. Many companies that gain a deeper understanding of this development struggle with decisions and hire consultants. In addition, decisions will increasingly be made by computers.
You frequently speak to an audience of decision makers and captains of industry. Does this message get through to them?
“Even now many people think that my message is slightly provocative, but they are increasingly receptive to it."
I starting publishing on this subject in 2000 and back then it wasn’t on the radar. At the time economists thought I was someone who saw technology mainly as a threat. Even now many people think that my message is slightly provocative, but they are increasingly receptive to it. A lot of media attention is focused on the impact of technological development on our society. Companies too will have to think about the impact of technology on society. But for many, thinking about the loss of huge numbers of jobs and the concept of a basic income is still a step too far.
Do you see any change in decision makers’ vision of society?
That differs from country to country. In some European countries a lot of thought goes into corporate social responsibility. The topic is being raised more in the US lately but the underlying philosophy is still based on a firm belief in the market. In the past, efficiency was the source of a great deal of prosperity. So the question now is: have we reached the point where this principle becomes too disruptive?
Mini-bio Martin Ford (53)
BSE, Computer Engineering, University of Michigan
MBA, UCLA Anderson School of Management
Software developer, entrepreneur, futurist, author
Outdoor activities, i.e. hiking
Married, three children