Is Jobless Growth Inevitable?
As machines become smarter, the mutually reinforcing relationship between technological progress and human prosperity seems to be growing weaker. But some countries seem to have figured out how to sustain the old dynamic, ensuring that technological innovation benefits all.
ABU DHABI – Ever since the industrial revolution, humans have been ambivalent about technological progress. While new technology has been a major source of liberation, progress, and prosperity, it has also fueled plenty of agony – not least owing to the fear that it will render labor redundant.
So far, experience has seemed to discredit this fear. Indeed, by boosting productivity and underpinning the emergence of new industries, technological progress has historically fueled economic growth and net job creation. New innovations accelerated – rather than disrupted – this positive cycle.
But some are claiming that the cycle is now broken, especially in technologically savvy countries like the United States. Indeed, machines are becoming smarter, with innovations like advanced robotics, 3D printing, and big data analytics enabling companies to save money by eliminating even highly skilled workers. As a result of this “productivity paradox” (sometimes called the “great decoupling”), jobless growth is here to stay. We can no longer take human prosperity for granted, however rosy the aggregate indicators for profitability and GDP growth may be.