Although there were several rising tides of innovation and major technological breakthroughs in the past, the situation today is essentially different. Productivity is still growing at a fast pace, but most people's incomes are not growing at all. In the past 20 years, innovation has not seemed to bring better times for the majority of people. This also constitutes quite a philosophical issue, because work and talent are closely linked to our personal identities. The mckinsey.com website asked some of the brightest people who specialized in these patterns about their opinions.
The great paradox
There is something Erik Brynjolfsson (professor at MIT) and his colleagues call the Second Machine Age’s great paradox. Despite productivity being at its highest levels and the amount of wealth being created is at a record high, employment is stagnating. In the USA, median income is lower than it was 20 years back. What should we think about this? In general, there are two groups of people: techno-optimists believe that technology and rapid innovation will solve all these problems. The second group – with economists being a substantial part of it – is more skeptical and tends to be worried about future developments. They remind us of the poor performance of the economy and predict economic growth to be slow and low. Both groups are right: there are many innovations, but they don’t make us all secure and living in wealth.
Record wealth levels... for who?
The flow of innovation has not stopped, nor has it slowed down. On the other hand, median income actually is stagnating, so while technology and innovations do make the overall pie bigger, many people may be worse off as a result of current developments. Also, chances are that more people will be worse off than better off. The impacts of machine-learning algorithms on employment are quite adverse.
Policy implications
That is why data scientist Jeremy Howard argues that governments need to consider the introduction of a basic living wage or a negative income tax in order to avoid dire social consequences. Today, computers are as good as humans as far as information-processing tasks are concerned. These types of jobs account for the bulk of job descriptions of 65% of the workforce in the USA. Workers who work with data and develop new algorithms will add to the overall economic value. Other people won’t be able to add any value at all. These people also face the question of personal identity, since the intellectual talents of many individuals will be threatened by computers.
-jk-