國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
II. The technological factor
a. Exponential technological advancement
For centuries, anthropologists, historians and philosophers have asked themselves the important question of what truly constitutes development for humanity. As we have all at least once in our lifetime asked ourselves what has been the single or series of events that shaped the world as we know it: while some have pointed out that it was the invention of agriculture, others thought that perhaps the constitution of societies, or even the appearance of politics, religion and rules… Our generation is more and more inclined to believe that, being today relatively omnipresent and almost omniscient, it is the advancement of technology that represents, if not the only, at least the most constant force that defines our species. A proof of this is that for thousands of years, as Erik Brynjolfsson and Andrew McAfee indicate it, humanity followed a very gradual upward trajectory in terms of progress: it was achieved very slowly and almost invisibly. Farming and domestication, disputes and settlements, the world of ideas and that of superstition, religion were not able to exert complete influence, and even less condition our existence. Now if we take a look on the historical curve42, it becomes obvious that a very particular phenomenon revolutionized human civilization far more than any previous event in our entire history:
42 BRYNJOLFSSON, Erik and Andrew MCAFFE, The Second Machine Age. Work, Progress, and Prosperity in a Time of Brilliant Technologies, W. W. Norton & Company, Inc., New York, 2014, p. 7.
‧
mechanical engineering, chemistry, metallurgy, and others disciplines”, have represented the three most important, sporadic technological breakthroughs. The abrupt change in the precedent graph corresponds to the first of those three capital moments in the late XVIIIth early XIXth centuries in which the steam engine was developed and improved by James Watt and his contemporaries. As we know, prior to this invention, the first engines were highly inefficient and would waste even more resources than the actual the actual energy they were meant to produce. It was, as the American anthropologist Ian Morris tracks it in his book Why the West Rules: “the biggest and fastest transformation in the entire history of the world.” The First Industrial Revolution drove humanity in what Brynjolfsson & McAfee also call the First Machine Age –the first time technological innovation took over progress in a way that it“made a mockery of all the drama of the world’s entire history43.”
A Second Machine Age –which barely differs from the term of Third Industrial Revolution used before– is doing in the new millennium what the steam engine did for our ancestors more than two centuries ago, by the intensive usage of computers as well as the more efficient exploitation of other innovative technologies. As foreseen by pioneers like Jeremy Rifkin whose concerns and observations were quoted several times in the previous section: the full potential of these new technologies has recently been achieved, but yet not fully according to postmodern analysts. Second Machine Age means that innovative technologies such as digitization have the capabilities to continue improving and doing even more innovative and unprecedented things. This “inflection point” that has been reached, which in the graph would be represented (ceteris paribus) by an almost completely vertical line drawn towards the horizon, means that things will likely continue to be done at an even faster pace but also in a better way. A more optimistic view will dominate the tone in this section; a perspective that comes from those who believe that as “technical progress is improving exponentially […]
digitization is improving the physical world”44. And even if rapid and accelerating digitization is likely to bring economic environmental disruption, workers with the right skills and with the right mindset will thrive.
As technological progress has always left behind some people –more and more people as times goes by–, it is also true that there has never been a better time to be an
43 Id.
44 Ibid., p.11.
‧
employee who, with the right education and a decent to good ability to use new technologies, can become a successful entrepreneur. But being optimistic doesn’t mean not seeing things the way they really are: there has never been a worse time for workers who, with only basic set of ordinary skills and abilities to offer, are unable to compete with modern computers and robots that integrate those skill and abilities by means of digitalization and advances artificial intelligence. We can tell from a simple statement such as the one given by Frank Levy and Richard Murnane in their book The New Division of Labor, how the new spirit of times radically differs from the Marxian anthropocentric idea of work. The new division they focus on, instead of being that of antithesis between employers and employees for the control of the means of production, takes place between people and computers. “In any sensible economic system, people should focus on the tasks and jobs where they have a competitive advantage over computers, leaving computers the work for which they are better suited45.”
A paragraph that would’ve caused indignation a bit more than a century ago, when humans would compete not against computers but rather be seen as the most sophisticated piece of machinery ever invented, is now a commonplace in newspapers and magazines from all around the world. Back at the time, computers were humans; even in during the entire first half to XXth century the closest to computers were people, women most of the time, who would spend most of the day tabulating results and doing complex arithmetic.
Within the next decade after the end of the Second World War, the first modern inventors came up with ideas to design machines that would replace those employed in “intellectual tasks”. The first inventions were purely mechanical; the second-generation electro-mechanical, until the threshold of digital machines was attained. What shocks the youngest generations today is not learning that their grandparents were once employed as arithmeticians and recorders: the real shock comes from realizing that fully entered as we are in the XXIth century, there’s still some people out there whose job is to undertake this repetitive and rudimentary responsibilities. The question that is usually asked to experts is how digital progress became so sudden after being gradual for so long?
Two concepts are essential for understanding the remarkable progress that has been undertaken in so little time. The first and most popular one comes from the observations made by a co-founder of the microprocessors maker Intel in 1965. In a famous article from the Electronic Magazine, “Moore noted that the number of transistors in a minimum-cost integrated circuit had been doubling every 12 months, and predicted that [that] same rate of
45 Ibid., p. 15.
‧
interesting facts about this law is how it differs from the general laws of physics for example, which govern mechanics and thermodynamics; laws that even though descriptive and in most cases still unverifiable by most of the people (without the appropriate expertise), are true no matter where. “Moore’s Law, in contrast, is a statement about the work of the computer industry’s engineers and scientists; it’s an observation about how constant and successful their efforts have been47.” A sort of sustained success that is rarely applicable in other domains. The reason is also explained by Erik Brynjolfsson and Andrew McAfee as follows; two main reasons actually. First, they tell us, while transistors and other elements of computing are constrained by the laws of physics, as cars, airplanes for instance, the constraints in the digital world are much looser.The second reason that Moore’s Lax has held up so well for so long is what the authors call “brilliant tinkering”: finding engineering detours around the roadblocks or limitations thrown up by physics. Wavelength division multiplexing or WDM were developed when communications traffics threatened to outstrip the capacity even of fiber-optic cable.
Besides of network bandwidth improvements, variations of the law have been applied to improvement over time in disk driver capacity and display resolution. There are no limits to the methods deriving from brilliant tinkering that had help to skirt the limitations imposed by physics to innovation. Mike Marberry, a current executive at Intel, summarizes Moore’s law when he states that “if you’re only using the same technology, then in principle you run into limits. The truth is we’ve been modifying the technology every five or seven years for [the last]
40 years, and there’s no end in sight for being able to [keep doing so].48” Doubling happens both quickly and reliably in most of cases whenever it comes to digital advancements.
The second concept that experts consider relevant for understanding these advances comes from an ancient story that relates to the invention of the game of chess, which originated in what we know today as India in the sixth century CE if we are to believe the story.
The story tells that the game was invented by a very cleaver man who traveled to the capital of the Gupta Empire to present his invention to the ruler. The emperor, impressed by the ingenuity of the inventor, but also by the difficulty and beauty of the game, allowed his subject to name his own reward. The clever man asked only for a certain amount of rice to feed his
46 BRYNJOLFSSON, Erik and Andrew MCAFFE, op. cit., p. 18.
47 BRYNJOLFSSON, Erik and Andrew MCAFFE, op. cit. (The Second Machine Age), p. 41.
48 Ibid., pp. 42-43.
‧
they use the chessboard to determine the amount by placing one single grain of rice on the first square of the board, two on the second, four on the third, and so on so that each square receives twice as many grains as the previous one. The rule agrees, putting in question the cleverness of his subject and recognizing his modesty and loyalty. Almost immediately he sees that the more eloquent, summarized way, will help us to better understand and visualize the notion of exponential function. “After thirty-two squares, the emperor, had given the inventor about 4 million grains of rice. That’s a reasonable quantity –about one large field’s worth– and the emperor did start to take notice. But the emperor could still remain an emperor. And the inventor could still retain his head. It was as they headed into the second half of the chessboard that at least one of them got into trouble49.” Erik Brynjolfsson and Andrew McAfee recognize that our brains being not well equipped to understand sustained exponential growth, we usually tend to underestimate –as the emperor in the story did– how bug the numbers can get. Intuition and experience are outsmarted when we realize how staggering the effects of taking any number to the X power can be (as in “take the power of Uber and apply it to X”). Some of these staggering effects in the real economy today, are direct consequence of digitization and new technologies reaching the second half of the chessboard at the rate that was predicted by Moore’s Law.It has been said several times already that the results of the combined historical evolution of the economic phenomena that was described in detail in the previous chapter, plus the exponential growth –in both quantity and quality– of the most recent technological innovations, will be felt across virtually every activity and sector. Our two MIT experts agree with economists on the fact that “some technologies are significant enough to accelerate the normal march of economic progress [for which] they have to spread throughout many, if not most, industries; they can’t remain in just one.50” Examples are given, such as the steam engine invented by Watt; electric power would be a second good example. “The first one didn’t just
49 Ibid., p. 47.
50 Ibid., p. 47.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
massively increase the amount of power available to factories ad free them from the need to be located near a stream or river to power the water wheel […] Electricity gave a further boost to manufacturing by enabling individually powered machines […] The cotton gin, [in contrast], was unquestionably important within the textile sector at the start of the nineteenth century, by pretty insignificant outside of it.51” This versatility is a key factor of the term general purpose technologies (GPTs) that economist assign to that historically selective group of technological innovations so powerful that they interrupt and accelerate the normal speed of progress.
Brynjolfsson & McAfee confirm that computers, information and communications technology and digitalization belong to the same category as steam power, electricity and the electricity combustion engine. As it was the case for the steam engine that Watt developed and improved, the latest generation of GPTs have not only gotten better over the last decades, they have also led in the process to complementary innovations, or in the own words of the two analysis: to a cascade of benefits that is both broad and deep.” Digitization, in short, can’t be categorized as a single project that provides one-time benefits only. It is instead that ongoing process of creative destruction that entrepreneurs and innovators use to make definitive changes at the level of tasks, the jobs, processes themselves and of course organizationally.
b. Technology vs jobs
In his latest book published to date, Le monde est clos et le désir infini, The French economist Daniel Cohen makes an analysis of the most important concepts and ideas that have been presented in this paper until now. Drawing his inspiration from some of the same authors and specialist so far mentioned, which he recognizes are spearheading both in terms of technological innovations and plausible economic responses to the consequences of digitalization, he explains the paradox vis-à-vis the future of jobs and workers. “Never before, he tells us, the technological perspectives announced by digital advances were so brilliant, and the perspectives of growth so disappointing.” He shares with us some macroeconomic figures
51 Ibid., pp. 75-76.
‧
observations. In America for instance, 90% of the population has not seen any augmentation of their purchasing power for the last 30 years. In The EU, average growth in revenues per capita decreased from 3% to 1.5%, to .5% during the same period. He concludes that we’re all living our first Industrial Revolution without growth, and asks himself this question: “why the Age of Digitalization does not produce as much acceleration as the Electronic Age did a century ago?52”The first answer to that question comes from the asseveration that it is not enough to replace employees by machines if what we’re aiming is to create growth. What it’s needed from new technologies is to make the employees displaced to become more productive at whatever it is they do. Cohen gives as an example the XXth ambition that consisted in giving the peasants the opportunity to find better jobs in an industrialized city that those they could have back in the farms. This leading directly to the second answer that consists on how the first industrialized societies successfully accomplished the task of urbanizing a broad layer of the population. “Postindustrial societies are way less ambitious. All they do is trying to manage social interactions more efficiently (through car-sharing and social media), to reduce the nuisances (both auditive and ecologic) or to offer a broader variety of TV shows and entertainment […] What they are unable to do though, is to produce a brand new consumption society that offers more to its citizens than simply acquiring [or producing] the newest tablet or the latest generation of a smartphone53”.
In an also recent study made by the Oxford academics Carl Benedikt and Michael Osborne54, the two experts stipulate that thanks to digitalization almost 50% of the jobs are at risk of disappearing in favor of machines. This interesting study confirms the hypothesis stating that it is the intermediary professions that are predominantly targeted:
accountants, auditors, retailers, real state agents, personal assistants, doctors, pilots, teachers and economists, as mentioned before. Those less threatened would be: psychoanalysts, dentists, athletes, priests and writers (“no risk for novelists so far”, tells us Daniel Cohen jokingly).
Their analysis is inspired from the famous Moravec’s paradox (first articulated by Hans Moravec, Rodney Brooks, Marvin Minsky and others in the 1980s). The idea behind suggests that the physical activities that actually survive digitalization and automation are those that require more sensorimotor coordination from humans. The argument given to explain this
52 COHEN, Daniel, Le monde est clos et le désir infinit, Albin Michel, Paris, 2015, p. 15.
53 Ibid., p. 16.
54 BENEDIKT, Carl and Michael Osborne. The Future of Employment: How Susceptible are Jobs to computerisation? In:
http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf Consulted on April 2016.
‧
paradox is that it could be the result of what some experts still consider as primitive evolution, which took place millions of years ago and favored our species today with a comparative advantage in the domain of senses and perception; this in contrast to the more recent cognitive or purely scientific relative advantage that are surprisingly easier to imitate in technological terms55.
Modern informatics and the Internet of things would push us, following Cohen’s analysis, to do tasks that are seen as more spontaneous, for which creativity is an essential feature, a Fourth Industrial Revolution perhaps; this In contrast to the Second Industrial Revolution –that of electricity and assembly line methods– when our grandparents were asked to accomplish tasks that were everything but creative. Some of the most interesting reflections about Moravec’s paradox opened the door to economist such as David Autor to prove why the middle classes are disappearing in modern societies affected by the arrival of technologies of information and communication. An also reputed professor from the Massachusetts Institute of Technology, Autor decomposes the American modern workforce in three different levels to illustrate the transformations that digitalization has brought about and what is to be expected from it. Managers, professionals and superior technicians would occupy level 1; level 2 would be composed of jobs in the middle of the social hierarchy; finally level 3 would integrate those jobs at the bottom of the ladder.
It is worth once again taking some time to understand what the latest hierarchization of the workforce represents already for modern societies. David Autor observations are that right before the great recession that followed the subprime crisis, jobs belonging to the 3rd category or level grew in double digits during the years 1999-2007; jobs situated in the middle of the social ladder were those most affected. Confirming some of the numbers given by Jeremy Rifkin in 1995, he shows how the 2nd level jobs plummeted from 60% by 1970 to only 45% by 2012. In France also, a study mentioned by Daniel Cohen showed that employment in this category plunged by 9% within the years 1993 to 2010 (but also from 10% in Denmark and the United Kingdom, 7% in Germany). Furthermore, during
It is worth once again taking some time to understand what the latest hierarchization of the workforce represents already for modern societies. David Autor observations are that right before the great recession that followed the subprime crisis, jobs belonging to the 3rd category or level grew in double digits during the years 1999-2007; jobs situated in the middle of the social ladder were those most affected. Confirming some of the numbers given by Jeremy Rifkin in 1995, he shows how the 2nd level jobs plummeted from 60% by 1970 to only 45% by 2012. In France also, a study mentioned by Daniel Cohen showed that employment in this category plunged by 9% within the years 1993 to 2010 (but also from 10% in Denmark and the United Kingdom, 7% in Germany). Furthermore, during