The evidence shows, in fact, that the North American drive for more and more tertiary education has outstripped the needs of the modern economy, and that the resulting underemployment and unemployment has caused serious difficulties for a large portion of the current generation. And yet what passes for policy innovation in North America rests on doubling down on a failed and failing system. This is a gamble that the solutions of the 1970s, having fallen short of objectives for a generation, will somehow come right and solve the problems of the 2010s and 2020s.
New Technologies But Fewer Jobs
What is missing in Clinton’s strategy—and what is missing from political and public-policy debate across North America—is a serious consideration of the transformations affecting the modern economy. Ultimately, the mismatch between the degrees and expectations of university graduates and the job market is only half the story. The first fifteen years of the twenty-first century have seen the worldwide transformation of work through technological change. In sector after sector, machines and digital technologies have replaced workers, initially in small numbers, but increasingly in the thousands. The changes happened first in industrial and resource industries, destroying thousands of jobs in forestry, pulp and paper, and manufacturing. The transformation spread into the service sector, with online banking changing the roles of bank clerks, and with e-commerce and other technological solutions undermining work in many other economic sectors.
Even though the transition remains in the early stages, the mass use of robots has undercut a great deal of industrial labour. Henry Ford would have loved the almost worker-free assembly lines of the modern automobile factory, but North American workers are less impressed with the mounting job losses, made worse by the shift of factories to Mexico and other low-wage countries. There are many other examples. The development of computer-based income tax forms and e-filing has disrupted the personal accounting profession. Amazon.com, famous the world over for its e-commerce operation, is truly impressive as a technologically enhanced retail company, with modern, computer-controlled and automated warehouses. But spare a thought or two for the thousands of former warehouse workers being displaced by these new technologies.
The world now faces the real prospect of continued accelerated change and rapid job loss. Autonomous oil rigs and remotely controlled mining operations promise to eliminate thousands of jobs. The first autonomous oil rig in the Arctic went into operation in 2015, and Australia’s desert mines have been world leaders in remote-controlled extraction. The impact goes far beyond the miners and oil rig workers. Removing the front-line workers means immediate declines in on-site support staff, worker transportation, accommodation services, food and other delivery systems, and the related administrative activities. Companies wishing to stay competitive—particularly when working in high-cost remote regions, where extreme weather (e.g., 120°F in the Australian outback and -50°F in the Arctic) add to the difficulties of recruiting, retaining, and caring for workers—are strongly tempted to automate their operations as much as possible. But the job losses filter throughout the economy, cutting back on opportunities for young workers.
Outsourcing service and professional work to developing nations has eliminated many first-world jobs in recent years, and the advent of new technologies will likely accelerate the process. In the coming years, new technologies could conceivably overturn entire industries. Consider driverless cars. You thought Uber was bad for the taxi business: autonomous vehicles will eliminate the need for taxis altogether, along with the industry’s expensive and cumbersome system of licences and government regulations. But individual car ownership will also be affected by the emergence of on-call services that will deliver a vehicle to your door and drop you off when you are done. Some experts claim—and this is where the transformative potential of new technologies becomes really fascinating—that driverless cars will result in a major decline in bodily injuries associated with auto accidents, which will in turn reduce the pressure on hospital emergency rooms, slash the number of specialized nurses and emergency physicians, reduce insurance premiums, and contribute to longer life expectancies. There is a lot of good news in there, as well as a good deal of futurist blather, but keep an eye on the number of jobs being lost and try to figure out what new forms of work and employment will emerge in their place.
Consider the transformative potential of 3-D printing. These new technologies, with applications ranging from the “production” of personalized candies to the “printing” of jet engines and massive sections of bridges, can stand traditional manufacturing and all of the related work on its head. The concept is simple. The 3-D printer downloads precise technical specifications over the Internet and, using extruded materials, produces the desired item. At present, home machines can be purchased for close to $1,500 and can pay for themselves in a year or two. The rapid innovations in the field will ensure that 3-D printers will be able to print complex machines, including circuit boards, fine art, engine components, human body parts (yes!), and many other things with a few clicks of a mouse. Again, follow the value chain in 3-D printing. The large-scale manufacturing plant becomes a thing of the past, but so does the warehouse, the trucking company, the retail store, and all of the employees associated with the intermediate steps.
Describing the advent of dispersed manufacturing, open innovation, and globally networked design, production, and marketing functions as the “New Industrial Revolution,” Peter Marsh wrote, “The way companies switch their approach to suit the broader platform for global manufacturing will be central to their, and the world’s future. ‘Design-only’ manufacturers will become a more substantial and dynamic group. Such businesses, predominantly located in the high-cost regions, will employ large numbers in product development. They will leave physical production to others, mainly in parts of the world with lower wages.” Marsh also noted, in optimistic words filled with foreboding for people of average or below-average skills, “For the most talented, imaginative and technically qualified people, the new industrial revolution will create huge opportunities that will turn out no less exciting than those that changed the world during the original industrial revolution of the late eighteenth century.”[5]
Advanced digital intelligence, based on expanding the power of the Jeopardy-winning Watson-type computer by a factor of several thousand or million times, could easily eliminate a great deal of the so-called “knowledge economy” work. Most mortgage approvals are already done by computer algorithms, and computers are better than most tax consultants at ferreting out the hidden assets of would-be tax avoiders. Research shows that computers can select the best short lists for job vacancies. But imagine how this applies to the so-called soft and human fields, such as clinical psychology, where studies have shown that computer programs can already outperform human analysts in terms of diagnosis. As two Stanford University psychiatry professors argue, “Computers and Internet-based programs have great potential to make psychological assessment and treatment more cost-effective. Computer-assisted therapy appears to be as effective as face-to -face treatment for treating anxiety disorders and depression. Internet support groups also may be effective and have advantages over face-to -face therapy.”[6]
Older readers will remember “Lucy,” the early mainframe computer program named after Charlie Brown’s nemesis, that asked and answered questions: “What seems to be bothering you? You’re sad? Why? Can you tell me about it?” It was fun, but now it seems to be a reality. Twenty years ago, society struggled to get people suffering with mental illness to visit a psychotherapist. Now, these patients are being directed, under clinical guidance, to put their mental well-being in the hands of a digital system.
One can only imagine how many low-level, repetitive government functions—and functionaries—could be replaced by well-designed computers. Look at Estonia, one of the world’s most advanced e-countries, if you want to see the electronic future of government. Reducing cost and improving efficiency and productivity are the main reasons for investing in new technologies, but remember that each innovation has the potential to eliminate many jobs, although theoretically each one could also create an unknown number of spin-off opportunities. Science fiction writers have pondered the future of artificial intelligence for generations—and now it is staring the world in the face.
No sectors will be left untouched. For more