During the afternoon of the first day of the World Economic Forum 2016, a very stimulating session took place called: “The Promise of Progress”. The panel discussion was on the 4th industrial revolution, the theme of this year’s WEF, and cast light on the reasons why the technological revolution that we are living today could pose a threat to our societies.
The panel was comprised of Mr Arne Sorenson, President and CEO of Marriott International, Mr Vishal Sikka, CEO and Managing Director of Infosys, Mrs Laura D’Andrea Tyson, Professor and Director, Haas School of Business, University of California, Berkeley, Mr Guy Ryder, Director-General of the International Labour Organisation (ILO) and Andrew McAffee, Principal Research Scientist at MIT Initiative on the Digital Economy, Massachusetts Institute of Technology (MIT). The panel was convened with the support of Al Jazeera America and hence the host moderator was the well known anchor Mr Ali Velshi. It is true that this vibrant discussion created some uniquely interesting outputs that will be segregated in this article based on the speaker who made the relevant points.
Laura D’ Andrea Tyson
Professor Tyson started by saying that the topic of this session should have rather been “sharing of progress”. That technology is creating and will keep creating remarkable gains in the world, is something she is sure of. How will it be share though, that is a different matter as she commented.
Mrs Tyson soon discussed the phenomenon where the number of jobs in the US is declining as technology takes away jobs from many people. She said that policy wise there could be a solution to that through “minimum wage”, “collective bargaining” and “tax and transfer policy”.
Moreover, she underlined that “the number of employment contracts are a reducing share of the workforce”. This presents a heavy issue that calls policy makers to make arrangements for independent workers and entrepreneurs regarding their healthcare, pension and social benefits as a whole.
Further, Mrs Tyson shared a most conservative insight regarding the 4th industrial revolution, an insight that certainly surprised the audience coming from a professor at one of the world’s best business schools. She talked about previous industrial revolution and how it created lots of benefits and wealth that were widely shared throughout the middle class as well and lead to employment and better quality of life.
The professor presented China here as a great example country to capitalise on this previous traditional industrial revolution with releasing immense production capacity and benefiting from it through vast trade channels. The alternative to that model, according to Mrs Tyson is what we have today, numerous entrepreneurs around the world, disrupting every inch of the market.
According to her, this is not a sustainable growth way. Besides, the entrepreneurial way is not what most people want. Instead, people look more for safety and benefits rather than entrepreneurial risk. In addition, capital is truly scarce for start-ups.
The Indian CEO had distinctly different and more forward thinking views from the American Professor. He said that automation and technology are inevitable. There is no limit to creativity, according to the panelist.
“The progress of technology creates more opportunity” Mr Sikka highlighted. Entrepreneurs in India for example have better access to opportunity than ever before. The root of the issue he aspires to be whether we can educate people on entrepreneurship.
“Do we prepare people for the world how it will be?” “Why don’t we teach millions of people to be entrepreneurs?”, the Indian businessman wonders. If we take a deeper view, he is convinced that the more access people have to jobs the more the imbalances in the society will go away.
Mr Ryder commenced by making it clear that we are situated in a too sluggish global economy outlook currently and that the spiral continues in the wrong direction. About the 4th or 2nd industrial revolution – the ranking depends on which book you read he claims – he underlines that “progress is not about technology, it is about what we make out of it”.
What is more, the ILO top manager discussed the theory of “creative destruction”, which holds that after a period of turbulence, quality growth follows. However, Mr Ryder believes that ] this time it could be a different case. “This technological revolution has the capacity to transfer the way job is created and the manner in which job is undertaken”, he continued.
The International Labour Organisation Director General argued that the world has done too well before in terms of growth and employment. Currently we are experiencing a step back to full employment, while extraordinary growth inequality leads to exclusion. The big issue is that the world has had growing inequality for so many years. Mr Ryder thinks that if the 4th Industrial revolution accentuates those inequalities, we will be very worried.
The ILO Director General closed his speech by accentuating the importance of labour market institutions in working towards better employment conditions in the new digital era.
The President of Marriott International was also invited in the panel to share his experience about the digital revolution and its impact on business and employment. Mr Sorenson went on saying that we are still much better off today than what we were 50 years ago. People have better jobs and more wealth and thus they can spend it on travelling, which obviously makes him and his business happy.
Further, the American CEO said that since 2000 Marriott has had an increase of approximately 200.000 employees more in their employment system. Certainly, as he supports, it is possible that the compensation or benefits could be the same or slightly less.
Overall, Marriott’s boss thinks that people should not be mislead by the advertised hypes of Mark Zuckerberg alike role model but rather have a more steady career growth plan.
The MIT scientist began by recognising that it is the middle class globally that has been demolished. The Job incomes are under threat globally.
Technology can be one important reason for that. In the past technology was used only for the routine parts of the production line in big factories. Nowadays, they are used to perform complex jobs like thinking, understanding human speech, responding to it and so many more. Hence, Mr McAfee believes that these jobs are lost for ever to the machine evolution.
Another interesting element of his speech is the comment that entrepreneurship and startups will not be able to bring back the lost jobs to technology revolution. The reason is because startups will always use automated systems to cut costs and time.
Mr McAfee believes that policy makers need to accommodate this rapid digital advancement of our time, coordinate and try to diminish possible consequent social inequalities with better inclusive policies like tax and transfer systems, better education etc.
During the Q&A of the panel one question was distinguished and that was made by Mr Carlos Represas, Corporate Director of Bombardier, who asked a thoughtful question on how to abolish global poverty and marginalisation through coordinated policy-making. The answer of the panelists was not found adequate.
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