World Economic Forum Recap & Review

Courtesy of the World Economic Forum Twitter account

The 2016 World Economic Forum (wef) Annual Meeting took place this year in Davos Switzerland where the overall theme this year was “Mastering the Fourth Industrial Revolution”. The fourth industrial revolution is one of “cyber-physical systems”, which is largely characterized by automation, driver-less cars, artificial intelligence, big data, etc. While these technological advances will have and are already beginning to have a profound impact on our society and economy, of major concern simply put is the pending labor economic shift like none we’ve ever seen before.

While there were many additional topics of discussion from Greece to China, to food and cancer, adding those to this article would create one far too broad and redundant for a single blog post. A few of the relevant panels concerning labor economics within the fourth industrial revolution included: “A World without work?“, “Creating 75 Million Entrepreneurs: Is this Possible?“, “The Future of Growth: Technology-Driven, Human-Centred“, and “Educating the Masters of the Fourth Industrial Revolution

Effectively what’s at stake is the future of jobs (i.e. labor) in the World economy. A collaborative study by Oxford University economics and computer scientist researchers predicts that “According to our estimates, about 47
percent of total US employment is at risk.” (Frey et. al 2013) Technological advancement in the past has made previous jobs obsolete and the economy was somewhat able to adapt with higher and lower skill service sector work. The fear is that the new wave of automation may bring about an environment where the scale of work obsolescence is so vast that high skill, high education, white collar jobs even in the service sector will also be at risk. We have seen computer replacement of jobs creep further and further into the workplace including professions such as journalism, financial services, psychiatry, law, driver-less vehicles, marketing, etc. and the uncertain future of how large this can extend is still being hotly debated.

From the mood in the room and various perspectives on the topic, we can see that this economic symposium  will not simply be one of pragmatic solutions but perhaps more similarly reflect the debate about Climate Change, taking different shapes in various regions of the World. Most leaders of developed European countries appear to at least be willing to discuss public solutions to the problem including thoughts on a guaranteed minimum income. In the United States, and much of the developing World including China and India, the discussion appears to be emerging more into one of denial, clinging to old and antiquated systems, and intense conflict between those who (in the short term) stand to benefit and those who do not. Many academics however, including very highly esteemed economists such as Economics Nobel Laureate Dr. Christopher Pissarides, have similarly gone the way of the European community while those who serve to benefit from increased wealth concentration at the top willing to accept the possibility of job loss, are more likely to summon the traditional pure capitalist solutions : innovation and entrepreneurship.

Much like Climate Change, a massive transformation to our economy is coming and it is up to this generation to decide how it looks. While this change will progress over many decades, the important thing is focus the debate on solutions rather than on denial. We must summon the courage to face this head on and decide on the best solutions, public, private, or other to act on.

References:

Autor, David H. “Why are there still so many jobs? the history and future of workplace automation.” The Journal of Economic Perspectives 29.3 (2015): 3-30.

Frey, Carl Benedikt, and Michael A. Osborne. “The future of employment: how susceptible are jobs to computerisation.” Retrieved September 7 (2013): 2013.

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