Jobless Economy Caused by AI – What Should We Do?
In our first article earlier this year featuring our interview with Doug Heintzman, we discussed the most imminent problems related to artificial intelligence. In this article, we revisit our interview with Heintzman and discuss the social and economic impact of the Fourth Industrial Revolution driven by artificial intelligence and automation is different from previous economic and social revolutions and what it means to our society.
The speed and magnitude of this disruption driven by artificial intelligence and automation is unprecedented in history.
The fruits of artificial intelligence and automation will not be distributed equally around the world.
This growing inequality imposes a global threat as social distress increases.
Heintzman suggested the leaders (of today and tomorrow) need to focus on the following:
Making more people “literate” in the positives and negatives of AI and automation so that we can all work on finding solutions.
Working on a new social contract that includes corrective guidelines to offset inequality at large.
Rethinking education to create a more agile, adaptive workforce
Thinking beyond term-based and interest-controlled policy formulation.
An Industrial Revolution Unlike the Others
“AI is thought of as a key part of the Fourth Industrial Revolution and with reason,” Heintzman said. “Vast computing power, digital and mobile connectivity, and instant access to the world’s collective knowledge has caused technology to become deeply integrated into our economies, societies, and governments. Disruptive technologies such as AI, IoT, robotics, blockchain, quantum computing, and 3D printing are reinforcing each other and advancing at an unprecedented pace across almost all industries.”
This revolution has the potential to dramatically improve the quality of life, but it will inevitably set off a chain reaction with significant consequences to labour markets worldwide. A key consequence, as identified by the World Economic Forum, is inequality.
Heintzman concurred, “The economic benefits of AI will likely be unevenly distributed, leading to inequality.”
Inequality has also been a feature of previous technology disruptions. However, Heintzman argues that this disruption will be different in both speed and magnitude. This will lead to unrest due to widespread fear that humans will be replaced by automation and AI-controlled machines and services resulting in a “jobless economy.”
We are already seeing fear manifest around the world in anti-immigration and anti-globalization populist political movements.
Heintzman noted, “Most participants in these movements fail to understand that automation, and not low cost labour, is the real driver of the disruption they are reacting to.”
“You need to consider the historical context,” he cautioned. “When we look back at previous industrial revolutions, the world order changed quite radically. But every time, both capital and labour were liberated to do more productive and innovative things leading to greater wealth and greater employment. For example, as automation and improved agriculture productivity reduced the labour intensity of farming, labour and capital were redeployed to higher value pursuits.”
He thinks the notion of fixed labour displacement is a “lump of labour fallacy.” He explained, “Labour markets will ultimately naturally realign themselves and find a new equilibrium. If history is a guide, we will ultimately be more productive and wealthier as a collective.”
Heintzman argued that the speed and magnitude of this disruption “will make it especially hard for policy makers to navigate troubled waters as unemployment, at least in the short to medium term, increases across large swaths of the population, and social and political unrest, magnified by digital media, make it difficult to form stable political coalitions.”
“These economies will no longer be able monetize their once-valuable low-cost labour force as corporations in developed economies leverage AI and other automation technologies to move production and services onshore,” says Heintzman.
As the inequality in labour markets and economies manifest, the gap between the rich and poor will widen according to the 2018 World Inequality Report. This growing inequality will breed social distress and feed the growth of extreme nationalist, populist, and anti-authority parties.
“This phenomenon poses a global threat as disaffected groups and individuals can express their displeasure not only through terrorist activities, but also through cyber warfare and opinion manipulation by digital means,” Heintzman added.
Cure for the Negative Consequences of AI: Forming a New Social Contract
How do we deal with some of these disruptive consequences of AI?
Heintzman has some ideas: “The Second Industrial Revolution, the war that followed it, along with the economic realignment of the 1920s and 1930s brought upon the need for a new social contract. In this contract, Western democracies introduced reforms in public works, social insurance programs, and universal education and healthcare. In a similar vein, we are going to need a new social contract for the Fourth Industrial Revolution that puts forth corrective guidelines to offset inequality at large, and promotes constant retraining and lifelong education.”
The idea of a new social contract has many advocates, including the Global Future Council on Technology, Values and Policy. It has preliminarily proposed two changes in the contract:
Establishment of a new Licence to Operate to enforce companies to take on social and environmental responsibilities; and
Creation of national and global Citizens Wealth Funds to finance social services and infrastructure.
Progress in this area will be difficult. It will take some extraordinary leadership. As the World Economic Forum makes clear, there are many powerful forces, such as large corporations, that have advantageous stakes in the existing system and have considerable influence over policy makers. These forces will resist changes to the existing social contract and, in some situations, have been working diligently to dismantle it.
The new social contract needs to recognize that in a world with AI and related technologies, no person is an island. The benefits of technology-driven productivity cannot exclusively flow to a small elite. As Heintzman told us, “If it does, societies and our global economy will be disastrously destabilized. The cost of that destabilization, both in terms of wealth and human welfare, will be enormous.”
So, what do governments need to do to prepare our society to be AI-ready and protect the revolution’s left-behinds?
“We must chart a very careful path from the current era to the promise of the next,” said Heintzman. “The future is inevitable. The road ahead will be bumpy. We are on the cusp of a .very exciting future. We have choices ahead of us and it is up to us to make the sensible one.”
He hopes that policy visionaries and advisors, as opposed to term-based and interest-controlled policy makers, will emerge to get us through this transition period without ripping the fabric of society apart. And we should begin by designing and testing parts of a new social contract that will ideally address a majority of the problems to come.
Heintzman adds, “While Science, Technology, Engineering and Mathematics (STEM) will be incredibly important, we need to promote life-long learning with a strong emphasis on the three Cs: communication, collaboration, and critical thinking. We need to transition from thinking in terms of unemployment insurance to thinking about transition insurance and retraining. We also need to give serious thought to stabilizing mechanisms such as guaranteed minimum incomes and a fundamental restructuring of the taxation system.”
We concluded our conversation with Heintzman where we began, talking about the impact that specialized and generalized AI will have on our lives. Heintzman believes that AI in many forms will pervade almost all aspect of our lives; however, true generalized AI is still a ways off.
He did concede that we are starting to see global AI networks like SingularityNET emerge. “SingularityNET use swarms of AI engines powered by a blockchain reputation engine to tackle more complex compound problems.” Due to the pervasiveness and the pace of development of AI, Heintzman believes that “we need to think through the many ethical issues including bias and accountability before it is too late.” He foresees heavier investments in the near future to better address the way machines should handle user/self-preservation priorities and ethical ambiguities.
The Final Thoughts Heintzman Left Us With
“We need to engage in a formal and informed dialogue. The topic of the exciting future that we are heading toward, and its many implications on business and society, need to become a core part of our political and policy discourse. As many people as possible need to become literate in this area so that discourse is productive and impactful.”
We hope you learned something from our interview with Doug Heintzman. Please do share your thoughts with us and anyone in your network you think might be interested.
Douglas Heintzman is the Practice Lead for Innovation at the Burnie Group, a management and technology consulting firm in Toronto, Ontario. He is also chair of the selection committee for the NSERC Synergy awards for Innovation and a jury member of the Robot of the Year, the first international prize that rewards the best innovations in ethical artificial intelligence and robotics, beneficial for humans across 11 industries worldwide.