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Is Technology a Job Creator or Job Eliminator?

by Dave Hannon

November 1, 2011

By Dave Hannon


Blogger's note: This is NOT an anti-technology blog post. This is a review of a talk given by an author who has written a very thought-provoking book. Hopefully it will provoke some thoughts from you as well.

The domain of human workers is shrinking as the domain of technology expands, automating more manual processes across a variety of industries.

It's one of the realities of the economy we have created and the prevailing concept of a new book called Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy written by MIT’s Andrew McAfee and Erik Brynjolfsson. In a presentation to a group of attendees in Boston today, McAfee described the book's primary arguments, pointing out that while the digital revolution has been good for overall economic growth, there is "no economic law that states a growing economy rises all boats." And while a select few people have been made extremely wealthy in our productive economy, some workers are being set adrift in technology's wake.

And in some cases, those workers are literally being replaced by technology. 

McAfee cited some pretty convincing examples to show that technology has been rapidly encroaching on human workers' domains in recent years. He said, for example, one of the traits that many experts cited as uniquely human was pattern recognition. Driving a car requires a constant analysis of inform ation and nearly constant decision making and judgment. For so many years it was thought that a computer could never be able to make those judgment calls safely and drive a car on open roads.

Then Google announced last year that it had developed an automated car that drives itself and has driven more than 100,000 miles with only one accident – it was rear-ended by a human driver. So much for humans being superior at pattern recognition and decision making.

McAfee also pointed to examples around speech recognition technology from Lionbridge and the performance of IBM's Watson supercomputer on Jeopardy as further indications that technology is encroaching on the domain of the human worker.

(Perhaps the most convincing example to me, an editor, was unintentional. That was McAfee's decision to self-publish an e-book, a process in which technology basically replaces the publisher and printer!)

But, of course, those technologies were created by huge employers like Google and IBM, so can't you make the argument that technology companies create enough jobs to more than offset the jobs that their products may automate? Well, yes and no, says McAfee. Certainly the high-tech economy accounts for a number of jobs in the U.S., but high-tech companies do not create nearly as many jobs as other industries, says McAffe, especially in the era of cloud computing and software-as-a-service. For example, the company that makes the popular web-based software Dropbox – which is used by 45 million people worldwide to increase productivity – employs 70 people.

Even some of the jobs that survive the wave of automation are going to be more  high-tech, leaving some workers out in the cold. While the U.S. remains a powerful manufacturing nation (it does—check the numbers), its increasingly automated factories put a premium on highly skilled laborers. A "factory job" is not sitting on an assembly line anymore, but watching computer screens and using IT to streamline operations.

Beyond its impact on raw employment numbers, at the macroeconomic level, this trend is contributing to the greater division of wealth in the U.S. McAfee pointed out that the top .01% of the U.S. population takes home 6% of the wages in the U.S. "I'm uncomfortable with how divergent out society is and it's going to continue this direction," he said. "Technology is not the only factor driving this, but it's one of the factors."

Now, before you start to question why an MIT professor (and an IT blogger, for that matter) would highlight the "technology minimizes job growth" argument, I'd like to point out that McAfee's not in favor of reverting to a low-tech society. He's at MIT, after all, the Pantheon of technology development. But he says preparing and encouraging entrepreneurs to open car washes and dog grooming salons is as important for overall employment as it is to encourage tech startups. We have to raise all boats across the board. But how does that happen?


Education is the key to raising all boats, McAfee said. And education is an area where technology can truly help create more employable workers. McAfee pointed out that workers with an undergraduate or graduate degree have a much better employment future than those without. But with the cost of college spiraling out of control, many workers cannot afford college today. And those that do graduate, do so with a massive pile of debt weighing them down for years.

THIS is where technology can help. Technology has the ability to make educa tion more pervasive, more visible, and more affordable. If Facebook has done anything, it has raised the average minimum comfort level with online technology. Why not capitalize on that and apply that to the public community college environment to deliver courses on a variety of topics to a broader student population? And while we're at it, why not use social networking channels to remove the stigma of community or public education? Let's support those schools that are raising the lower boats by enticing them into a college program in areas where they were not accessible before. 

And spreading education through technology doesn't have to stop at the college level. It's very applicable at the professional level. Heck, isn't that what you're doing right now? And SAP is doing plenty of that (hear my podcast with SAP's Kerry Brown on a related topic here). Technology is the key to that widespread, accessible education that will raise all boats.

I think.

What do you think?

Do you agree with Andrew McAfee's assessment? Or maybe you have examples of ways in which technology is helping drive job creation? Share your thoughts and opinions here.

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Dave Hannon

9/25/2013 8:58:46 PM

As a counterpoint to what I've covered here, I just wanted to highlight a McKinsey report I read this morning (available here which points out (at the end of page 3 and beginning of page 4) that according to an analysis of the French economy, the Internet displaced 500,000 jobs in the past 15 years but created 1.2 million jobs, for a net gain of 2.4 jobs for every one lost. Food for thought.