Preparing for change
Innovation continues to improve human lives, but technological advances do not always have an unambiguously positive impact.
We’ve learned from history that the application of new technology often leads initially – counter intuitively – to lower productivity, depressed wages and disrupted industries. We argue in Delayed expectations: automation, productivity and wages that the true effects of new, groundbreaking technologies often take decades to improve productivity.
It takes time for economies of scale to kick in on the production side, for consumer behaviour to adapt, for companies using the technology to refine or even change their business models. While business and society catch up, productivity tends to lag, despite relatively low unemployment figures.
Governments, institutions and society at large should all be preparing for the potential economic fall-out by seeking solutions to mitigate the effects of disruption and job and wage polarisation. The concept of a universal minimum income, for example, is currently hotly debated, while taxation on robots has also been proposed by such luminaries as Bill Gates.
The debate around possible solutions will likely continue for years to come. Historically, society has always found a way to adapt to both the beneficial and the challenging effects of technological change. We believe that people will successfully navigate the current period of technological change as they have in previous periods of technological advancement throughout history.