Some reasons for optimism in the wake of crises
As late as March 1916 Douglas Haig, the commander-in-chief who led British efforts in World War 1, sought to limit the number of machine guns per battalion in case it “dampened the men’s fighting spirit”. He used the same reasoning to explain his resistance to steel helmets.
Haig was old school. So old school that even in 1926, a full decade after the disastrous Battle of the Somme (the bloodiest in British military history), he held tight in his dismissal of modern technology. “I believe that the value of the horse and the opportunity of the horse in the future are likely to be as great as ever. Aeroplanes and tanks are only accessories to the men and the horse”. And with that, Haig’s place in history as a caricature was secure. Those who don’t embrace changes in technology mostly get run over by it.
The Covid-19 pandemic has seen accelerated use and deployment of technology, from remote work and distributed workforces to online conferences, tele-medicine and online education. This will have profound implications for the future, coming after a decade of technological innovation that was marked by a polemical discourse on how technology can/will displace so many jobs.
Fears of robots and machines displacing jobs have been around a long time, and have mostly proven to have been overblown. Take, for example, the new technologies that produced the car, or automobile as it was.
What actually resulted from this technological revolution was the creation of a whole range of supplementary industries. Filling stations, repair shops and spare part suppliers. All new jobs. In other ways, the car transformed society. It became possible to live further from your place of work. Cheaper housing out of town appeared as a new option. Travel was greatly accommodated, along with hotels. All positive outcomes.
So why the hysteria over job displacement now, many ask? There are two differences with this age of technological innovation.
First, speed. The lag between the inventive and innovation processes and commercialisation (from patent to operation) has narrowed considerably. Technologies are diffusing much faster now than they have in the past. It took the telephone 75 years to reach 50-million users. Angry Birds took 35 days to reach that number and Pokeman Go only 19 days.
Second is the potential negative effect on developing countries and specifically the traditional model of economic development — mass manufacturing. During previous incarnations of technological change, from the Industrial Revolution through to more recent iterations, new manufacturing technologies mainly benefited low- and medium-skilled workers by simplifying the tasks workers had to perform. Technological progress did not induce a long-term rise in unemployment as production increased drastically, allowing prices to fall and consumers to buy more goods.
This “mass employment manufacturing model” has been a well-worn path to economic success and there have been spectacular examples, such as South Korea, Japan and China. But that option is now largely over.
Automation and artificial intelligence (AI) can both eliminate lower and medium-skilled jobs and facilitate the production of goods closer to the markets they are sold in. That is bad news for African countries that are targeting manufacturing as a job-rich sector. This sector has traditionally been a stock deliverer of the (often lower skilled) jobs that are badly needed on this continent.
The global disruption to supply chains caused by the pandemic is acting as further catalyst to automation and technological deployment. As the pandemic hit in the second quarter last year an EY global survey revealed almost half of company bosses in 45 countries were speeding up plans to automate their businesses. Those numbers have now increased.
According to the World Economic Forum’s The Future of Jobs 2020, more than 80% of business executives are accelerating plans to digitise work processes and deploy new technologies, and 50% of employers are expecting to accelerate the automation of some roles in their companies.
Yet there are reasons to be optimistic. Global crises often overturn existing orders and long-held norms and pave the way for new systems and structures to emerge. They also traditionally introduce new ideas and innovation.
The decade that followed the 1918 Spanish flu was marked by creativity, innovation and technological advancement. For example, the 1920s saw patent growth of about 25% in the US compared to the previous decade. New types of companies emerged, such as management consultancies, and new sectors emerged or older ones were transformed, such as transport, entertainment, advertising, telecoms, pharmaceuticals and health.
Look at any truly global crisis in the last 100 years and you see economic, social and political changes in the decade that followed. Political disruption follows financial crises (1929 and 2008, for example). It’s hardly a news flash, but health crises lead to innovation and advances in health care (Spanish Flu and HIV/Aids). Economic crises lead to bold ideas (the 1970s’ oil crisis paradoxically launched renewable energy).
A post-crisis period like the one we are about to enter will enable big ideas to emerge and there will be a greater appetite to adopt them. Technological innovation will now more than ever grease the wheels of change.
• Rynhart is senior specialist in employers’ activities with the International Labour Organisation, based in SA. He is author of ‘Colouring the Future: Why the UN plan to end poverty and wars is working’.
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