If robots are not the problem, then what is?

Has a fear of robots contributed to a lack of business investment in technology? Is an absence of artificial intelligence a challenge for the UK economy? Can we move into a Fourth Industrial Revolution without major investment in new research and discoveries?

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The World Economic Forum is the organisation behind the annual Davos get-togethers of the global elites. It reckons we are on the cusp of a Fourth Industrial Revolution driven by ‘ubiquitous automation, big data and artificial intelligence’. Yet as more and more is written about the acceleration of automation, artificial intelligence (AI) and the spread of robots, we are seeing something of an anti-technology backlash. 

This is even happening at the centre of new technology in America’s Silicon Valley. Last year the robot K9 was employed by the San Francisco Society for the Prevention of Cruelty to Animals (SPCA) as a security guard. Its job was to prevent the number of car thefts in the surrounding area. There were claims that whatever it might be doing for car crime the robot was driving homeless people off the streets. Local residents also reported that they were frightened by it. The city of San Francisco stepped in and ordered the SPCA to keep its robot off the sidewalks or face a $1,000-a-day penalty for operating it in a public right-of-way without a permit.

Some worry that AI will create more inequality and concentrate wealth into fewer hands. It is argued that those who create these robots and invest in them, will reap the benefits, leaving the rest of us to carry out increasingly menial and low paid work. Some even see technology as the ‘clash of civilisations’ between robots and humans. Here was I thinking that a ‘clash between civilisations’ was about people falling out with each other!  

Whatever we may think or fear about the advance of robots – and my view is that we should welcome them – one thing is clear. Robots and related automated technologies are here to stay. We should stop obsessing about their specific impacts. The much bigger problem is how slow we’ve been deploying them. The slowness in deployment and our anxieties are probably are linked. 

The Institute for Public Policy Research (IPPR) discussion paper on ‘Managing Automation’ (December 2017) highlighted that a big challenge for the UK economy is the absence of robots. Instead we have low investment, and a long tail of low wage jobs, low productivity and poor management practices. These are useful insights that are worth exploring. 

Business investment has been falling to low levels for quite some time. Twenty years ago British businesses were investing the equivalent of 12 per cent of national output. That fell by a quarter by the eve of the 2008 financial crash and has flatlined at about 9 per cent since. This is a significant drop in the amount of resources employers are devoting to investment in future technologies and automation. 

It is not surprising that this flatlining of business investment has coincided with flatlining productivity, accounting for the so-called ‘productivity puzzle’ of stagnant productivity since before the financial crash. Productivity, what we can produce over a given time, is the best indicator of how much an economy is able to deliver for its people. 

Last December, Frances O’Grady, general secretary of the Trade Union Congress, commented in People Management (CIPD magazine): ‘Real wages have fallen for the last eight months in a row. And working people will be worse off than they were a decade ago.’ More than anything else flat productivity accounts for the decay in incomes experienced by many people.  

The decline in resources devoted to researching the next wave of discoveries and inventions reinforces productivity effects from a dearth of transformative investment. Low spending on research and development (R&D) by business and government is a consequence of their cost-cutting in tougher times. Between the early 1980s and the mid-1990s public and private R&D spending also fell by about a quarter, from about 2.25 per cent of national output to 1.6 per cent. Since then it has been pretty flat. This undermines the potential for future productivity growth.

So there you have it. Despite the hype it seems our economy is not booming with accelerating innovation. Rather the opposite defines what’s special about the current situation.  

We should put aside the fear and scare mongering about robots taking over. Robots can’t take the blame for our most pressing economic problems: long-term poor investment, low productivity and inadequate levels of R&D spending. That’s down to humans. Robots are not going to change this sad state of affairs. Only we can. 

In 2018, it is long overdue that we need to become more visionary and long term in our thinking about what our society needs. We need to invest much more for a better future. Then the Fourth Industrial Revolution might start to be something we see in our pay packets as we produce more with the assistance of lots more robots.

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