Information Technology Reference
In-Depth Information
panels; they are not really associated with a sustainable new employment sector. For the most part, it
seems likely that information technology will underlie newly created industries, while at the same time
disrupting the more traditional industries that now employ a large fraction of our workforce.
This sounds like a version of the tragedy of the commons. It is to the advantage of each
individual company to reduce its costs by introducing automation and cutting workers,
but when every company does this, the pool of consumers evaporates.
Yes; in fact, in my book
The Lights in the Tunnel,
I suggest that we should view the market for goods
and services much like a public resource such as a river or an ocean. If you imagine that the market
consists of a “river of purchasing power,” then as a business sells a product or service into the market,
it will extract purchasing power. As a business pays wages to workers, it returns purchasing power to
the river.
However, as automation increases throughout the economy, the mechanism for returning purchasing
power to the river begins to break down—so the river will eventually run dry. For any individual
business, there is a clear incentive to pay out as little as possible in wages; yet, collectively, those
wages are the primary source of income for the consumers who purchase the products and services
the businesses are selling.
In many cases, jobs have been eliminated through the introduction of information tech-
nology, but the job wasn't automated; the service function was transformed into a self-
service function. I'm thinking of self-service gas pumps and self-service checkout lanes.
The customer is now doing much of the work.
Yes, this trend is important because it effectively lowers the threshold for eliminating jobs. In fact, a
business does not need to fully automate everything a worker does: it simply needs to make the task
simple and approachable enough so it can be taken on by the consumer. This is, of course, happening
with ATMs, self-serve checkout lanes, and increasingly sophisticated vending machines. We are also
beginning to see information and customer service provided via mobile devices.
It's also important to note that self-service of this type will happen internal to organizations. For
example, a manager who currently supervises a number of knowledge workers may someday instead
have access to powerful AI-enabled tools that enable him or her to directly take on many of the tasks
now performed by those workers. This is likely to further flatten organizations, eliminating knowledge-
based jobs and middle managers.
Are you anti-technology? Would our global society be better off without the development
of new information technologies?
Not at all. I believe that the prosperity we now enjoy in developed countries is almost entirely due
to technological progress. And I think technology offers the only hope for increased prosperity in the
future.
The problem is not with technology but with our economic system. We need to adapt it to reflect the
new realities implied by advancing information technology. Without that, the benefits from innovation
will accrue only to a tiny number of people, while the vast majority see their situations stagnate or
decline. Ultimately, that seems likely to undermine the entire economy as well as our political and
social institutions.
You have argued that without some fundamental changes, we're facing a continuing
downward spiral in our economy: job losses leading to consumers being eliminated from
