Automation and AI: How it will affect the future of work. – #293

Which Roles Will Be Most Affected By Automation And AI.

 

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Carl Benedikt Frey’s latest work ‘The Technology Trap’ takes a sweeping look at the history of technological progress and how it has radically shifted the distribution of economic and political power among society’s members. As Carl Benedikt Frey shows, the Industrial Revolution created unprecedented wealth and prosperity over the long run, but the immediate consequences of mechanization were devastating for large swaths of the population. Middle-income jobs withered, wages stagnated, the labor share of income fell, profits surged, and economic inequality skyrocketed. These trends, Frey documents, broadly mirror those in our current age of automation.

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I'm James Taylor, and you're listening to the super creativity podcast, a show dedicated to inspiring creative minds like yours.

The Industrial Revolution was a defining moment in history, but few grasped its enormous consequences at the time. As we find ourselves in the midst of another technological revolution, how can the lessons of the past help us to more effectively face the present? Just as the Industrial Revolution eventually brought about extraordinary benefits for society, artificial intelligence systems today have the potential to do the same.

Carl Benedikt Frey’s latest work ‘The Technology Trap’ takes a sweeping look at the history of technological progress and how it has radically shifted the distribution of economic and political power among society’s members. As Carl Benedikt Frey shows, the Industrial Revolution created unprecedented wealth and prosperity over the long run, but the immediate consequences of mechanization were devastating for large swaths of the population. Middle-income jobs withered, wages stagnated, the labor share of income fell, profits surged, and economic inequality skyrocketed. These trends, Frey documents, broadly mirror those in our current age of automation.

Carl Benedikt Frey is an Oxford Martin Citi Fellow at Oxford University where he directs the program on the Future of Work at the Oxford Martin School. In 2013, Frey co-authored “The Future of Employment: How Susceptible Are Jobs to Computerization”, estimating that 47% of jobs are at risk of automation. With over 6,000 citations, the study’s methodology has been used by President Barack Obama’s Council of Economic Advisors, the Bank of England and the World Bank.

Musician David Byrne said of Frey’s work that it "Made me look at the industrial revolution, invention, sleeping beauties, contexts and the forces that shape our societies differently."?David Byrne, New York Times Book Review

Carl and I discuss which roles will be most affected by automation and AI, the difference between enabling and augmenting technologies, the impact of cities and alcohol prohibition on innovation, and which skills we should all be developing in this new age.

James Taylor
Hello and welcome to the creative life. today. I'm delighted to be joined by Carl Benedikt Frey. Carl Benedikt Frey is an Oxford Martin city Fellow at Oxford University where he directs the program on the future of work at the Oxford Martin school. In 2013. Free co-authored the future of employment, how susceptible are jobs to computerization? estimating the 47% of jobs are at risk of automation, with over 6000 citations. The study's methodology has been used by President Barack Obama's Council of Economic Advisers, the Bank of England, and the World Bank. His most recent book is called the technology trap, it looks at how the history of technological revolutions can help us better understand the current economic and political polarization in our age of automation, artificial intelligence, and robotics. And it gives me great pleasure to welcome Carl here today. So welcome, Carl.

Carl Benedikt Frey
Great to be with you, James.

James Taylor
So share with us where in the world are you today? And how are things going in this interesting time that we're living in at the moment.

Carl Benedikt Frey 
So I'm in Oxford, at home. And most of the universities closed at the moment. And I've been spending the past couple of months between my living room, my kitchen, and my bedroom. And so that is how time is being spent these days is less traveling fewer conferences, and more time to do research.

James Taylor 
So is this a creative time for you these past 12 months or so? Or is that actually you find your creativity? You like bouncing off ideas off people and, and traveling and getting your inspiration that way?

Carl Benedikt Frey
Yeah, I think traveling or meeting people helps creativity. And I think if you look historically also, that's the reason why creative professions and innovation is always clustered from the days of Renaissance Florence to Victorian Birmingham and Manchester to 20th century Detroit, to Silicon Valley and Seattle. And today. And so I do think that sitting at home in front of a computer screen is unlikely to spark creativity and inspire to get new ideas. But fortunately, we've been having some ideas in the pipeline, and being peacefully at home is good for execution. It's good for productivity. It's good for just getting things done and writing things up. And so in that sense, it's been a productive time, but maybe not the most Creative time.

The difference between enabling and augmenting technologies.

James Taylor
Now, a key idea in this book, the technology trap is the attitudes towards technological progress are really shaped by how people's incomes are affected by it. So I guess progress may be desirable for many, but who are those who are most likely to block it? And why would they want to? Why would they want to? Why would anyone want to block progress?

Carl Benedikt Frey 
Yeah, so the key theme of the technology trap is that there are different types of technologies, that technologies that create new jobs, new industries, augment people in their existing jobs, make them more productive in what you do. So you can think about virtual reality. And 3d printing has been helpful for architects, for example, computer design, the software helps people designing airplanes and other things. Word and other information processing tools are good for people that you know, right? like myself, for academics and for, for creative writers. But then there are other technologies like robots like automatic elevators, that replace people in existing jobs and tasks. And, and by doing so, causes job loss and causes people's livelihood and incomes to vanish. And, and, as you mentioned, technology is good on average is improves standards of living, it makes us more productive, we can produce more with fewer inputs. And that is over the long run what drives economic growth and allows us to earn higher wages and incomes, but averages conceal a great deal of variation. And that the average improves doesn't necessarily mean that everybody benefits, right? If you put one hand on the stove, and the other on the freezer, you should be feeling quite comfortable on average. But we know from experience, that that is not the case. And the same can be said, of the labor market, which has been hand polarized because of these automation technologies. Robots, in particular, taking away traditional middle-income jobs, in factories, and, and offices. And, and as a result of that, we've been seeing that the middle class feels feel less optimistic about the future. And we'll also see historically that people on many occasions have actually rioted against technological progress and mechanization. And the key point of the book is that we can't really make progress for granted, because there's always this tension between the new and the old. There's also this tension between labor and capital, at least when it comes to automation technologies, which makes many people's skills redundant. So I guess that is sort of the key theme of the book is tension, and that technological progress inevitably creates.

James Taylor 
And in the book, you talk about some of these differences in history, different groupings, who have resisted sometimes, like quite violently as well resistance, technological progress. Some of them have been successful, others less so why the ones that were successful? I mean, give me an example. And why were they successful in halting or slowing the that progress? And the ones that were unsuccessful, you know, who give us a couple of those, and why were they unsuccessful in kind of the whole thing or stopping the progress in the field.

Carl Benedikt Frey 
So the point I'm making in the book is the likelihood of success depends on the distribution of political power in society, and with the losers from technological change, have political power or not. So up until sort of the eve of the first Industrial Revolution, which took off in Britain, around 1750. Craft guilds were one of the key institutions that shaped production in Europe, in China, and other places around the world. And craft skills were good in the sense that they transmitted knowledge and information from generation to generation, right? So those who came in as apprentices learn new skills, learn to practice or craft and, and that sort of led to the spread of knowledge between generations. But at the same time, they were quite conservative in terms of restricting production processes, in ways that benefited themselves. made their own skills more valuable. And when new technologies like the geek mill, and in Britain in the 1500s, for example, and they did everything they could to resist it. And monarchs who were also benefiting from the status quo, if you like, and didn't necessarily want any social unrest, often sided with the gills, gills, and, on several occasions, banned various types of automation technologies. And most of the people that had the most political power at this time, were the landed elites. And they in turn had very little interest in industry, developing in new fortunes being created by merchants and the likes, which could also potentially challenge their economic and political position in society. So in most countries, all across Europe, in China, in Britain, this served really to suppress the introduction of new technologies is suppressed innovation for a long time. And and I think it's important to remember that if progress was something inevitable, and the first Dutch Dutch revolution would have happened a bit earlier in history, if it was somehow inevitable, most countries would have adopted the same technologies that are available today, roughly to the same extent and will be rich and prosperous as a consequence. And we know that that is not the case, when we can see sort of similar forces at work in some places today. And so for example, the reason that you have very few rail road tracks in Argentina, is that the lorry unions are very strong, and they don't have any interest in competition for the transportation of goods in the conflict. So we see similar forces at work in some places, today still, and that's suppresses technological progress, and economic progress as well.

James Taylor 
So understand, let's say that those textile workers in the 770s 1770s, they were didn't have any political power, the people that owned the mills, for example, they had the power so that it was more incentivized to make the progress and make those changes. A lot of the changes are going on now, especially with artificial intelligence, maybe more so than robotics, are affecting those who are college educated, there may be our accountant, let's say accountants, for example, one of my clients is EI. And they're thinking a lot about how what the impact is of going to have artificial intelligence on the role of auditors, for example. And there's quite a lot of concern in some industries, lawyers and accountants and professional services. And these people have bit more political power than the 1700s textile worker. So what do you think is going to happen? Do you see that this fight is going to if you're a betting man, who do you think is going to win this battle when it comes to the implementation of things like AI?

Carl Benedikt Frey 
Well, I think the first thing to say is that accountants are an outlier in the sense that it's a profession that you point out that is seen as skilled or requires a college degree, and is quite exposed to automation. So on average, what we find it's actually mostly low skilled jobs that are exposed to automation, and artificial intelligence. If you think about doctors and lawyers, yes, you can automate some tasks like medical diagnostics, so you can automate document review. But you know, being a lawyer also requires appearing in front of the court, being a doctor requires interaction with patients and people's families. And these are tasks that are very unlikely to be automated. So the groups that are most exposed to automation are actually also the ones that have sort of a relatively weak bargaining position, but they're clearly examples and you mentioned one, and accountants. Now, I think you're absolutely right, that you know, if you want to be an accountant, you are required to be at have a certain educational background and a certification and all of that, and that sort of helps you safeguard your skills, and and your income and you can equally think about job as a translator. So even if we sort of Assume that Google Translate becomes perfect tomorrow, and could in theory, displace all translators? Well, it turns out for certain translations to be valid or unimportant documents, for example, you need it to be certified by a translator. So unless we certify Google Translate is not going to replace a lot of jobs among translators, so we have all of these occupational licenses and qualifications. And if you look, in the United States, for example, the share of jobs that requires some sort of occupational license have been increasing exponentially since the 1970s. So this is sort of a way of people for people to protect themselves and their skills, and most of these qualifications. And as you stay off relatively skilled jobs, that sounds unskilled jobs, which are protected by these as well, but for the most part, and they serve to protect the skills of those with higher levels of education.

James Taylor 
I'm James Taylor, business, creativity and innovation keynote speaker, and this is the super creativity podcast. If you enjoy listening to conversations with creative thinkers, innovators, entrepreneurs, artists, authors, educators, and performers, then you've come to the right place. Each week we discuss their ideas, their life, their work, successes, failures, creative process, and much much more. You'll find show notes for today's episode as well as free creativity training at James taylor.me. If you enjoyed learning about Carl Benedikt Frey, then check out my interview with physicist, biotech entrepreneur and member President Obama's Council of science advisors, Saffy bacau, where we discuss loon shots, and the problem with disruptive innovation. In my conversation with Sophie bacau at James taylor.me. After the break, we returned to my interview with Carl Benedikt Frey, and why creativity and complex social interactions holds the key to staying relevant in the age of artificial intelligence. This week's episode is sponsored by speakers you the online community for international speakers, speakers, you help you grow, launch and monetize your speaking business faster than you thought possible. If you want to share your message as a highly paid speaker, then speakers you will teach you how just go to speakers you.com to access their free speaker business training. I think the one that made me smile that you mentioned in the book was someone that washes hair and a hairdresser. So their job is to be a official washing up here. They're not the hairdresser but the washing of the hair and takes what was it a couple weeks to get a license to go through training to wash wash hair. So I guess that's interesting little kind of sidebar there. Now this book was actually written and obviously came out before the coronavirus pandemic. If you'd been publishing it today, knowing what you know now and the kind of time we've gone through. And we've seen a lot of this just really a speeding up of a lot of technological adoption, especially about remote working. Is there anything you'd be doing differently? Is it would you be taking a different position from some of the positions you took on the the book when it came out originally?

Carl Benedikt Frey 
Well, I probably would have framed some things differently. But I think sort of the key points of the book are as valid as they were when I wrote them. So if anything, I think the pandemic is likely to have made many of the concerns that I raised in the book, more arguments. So something that you see, for example, when you look historically, is that automation, anxiety is usually more widespread during economic downturns. So during the first Industrial Revolution, for example, you had the famous Luddite riots. And but those riots were actually more frequent during the years of the continent located within Napoleonic Wars, which caused enormous disruption to British trade, and a man that people had worse and outside options, right. So it's much worse losing, losing your job to robot during an economic downturn, when you have fewer job options. And that's why we see more automation excited during the Continental decade more automation excited during the Great Depression, more automation, anxiety, following the three post Korean War recessions, and then again after the Great Recession, and obviously, we've been through some turbulent times economically, and there is also some savvy evidence to suggest that people are more anxious about automation now than they were before the pandemic. So, for example, a survey that came out of AI University suggests that 27% of respondents in China favored restrictions on automation, before the epidemic. During the epidemic, that figure was up to 54%. So I do think these concerns if anything, have become more prominent. And I think many believe that the pandemic is going to accelerate automation. And I do think there's some truth to that as well. We do also see, during the Great Recession, for example, that routine jobs that are easy to automate, disappeared very rapidly during the recession, and never really come back, suggesting that businesses decided to automate some tasks rather than re hiring people. And we also saw that are in the aftermath of the Great Recession, we have more cash strapped consumers and more cash strapped consumers tend to opt to ship goods and services that are produced using more automation technology. So if everybody starts to go to McDonald's, for example, rather than going to a restaurant, and McDonald's uses more automation technology in food production, that increases the overall level of automation in the economy. And I suspect we're going to see some of that coming out of this pandemic as well. And then there's, in addition to that, the question of what's going to happen to many of these in person service jobs, where a lot of people worked, and where much of the job growth had actually come from, over the past couple of decades, actually, before this pandemic. And I think people are more likely to want to interact with the robots rather than a human barista, or a vending machine, rather than a human waiter. And after this pandemic, I'm not suggesting that the worst jobs will go away. But I think it's likely to spur automation in some of those demands.

James Taylor 
So what do you think the end of the one of the another part of the book just that I was I was reading it was just thinking about the that kind of creative clusters idea of cities and the power of cities and why so much productivity of cities? Why people this general move to cities as well? What do you think is the impact of the technology trap on an artist because it's pandemic on cities like the London's border towns like Oxford, for example, where you are, and some of those rising cities like the Bogota's in Colombia, for example, have been going very fast during globalization. Do you think we're gonna see a reversal that we're going to see the hollowing out of those those cities?

Carl Benedikt Frey 
Well, I think we're likely to see somewhat of a slowdown in urbanization over the next couple of years. So I think it's important to remember that we had this debate before back in the 1990s, where a lot of futurists like Alvin Toffler, and Karen Krause, and Tom Friedman, as well, or the book suggesting that the world is flat, and everybody can work remotely from their home. So from the beach, and from wherever. And despite that, sort of, since the internet and the web arrived, the percentage of the population working remotely has been between four and 5%. And quite sort of steady, steady, at that level. for around two decades now, obviously, now during the pandemic, that figures up to 50% in the United States, and somewhat lower figures in the UK and Europe, but still sort of roughly a tenfold increase. And, and I think we're likely obviously to go back to lower levels. But we're going not going to go back to the blocking patents we had before the pandemic. And most CEOs I've spoken to, and most survey evidence seems to suggest that mitt most people would like to work two to three days a week from home. And so I think we're likely to have a hybrid model, which would allow people to be working more productive at home but also seeing people at offices and in other places and cities, and interact and, and innovate because I think that sort of impersonal interaction, it's very hard to replicate still, digitally. If you interact virtually, somebody needs to set up a zoom call or somebody needs to pick up the telephone or knows Sort of sporadic interactions, and drive innovation. And, and because those sporadic interactions and the sort of creative tasks, also the hardest to automate. Whereas more routinized and standardized tasks that we tend to do at home, are more automatable. I think over the long run, we're going to see a shift in the composition of the workforce, where more and more tasks are about innovating, and exploring, and those type of jobs, employer largest share of the population, I think that is going to counteract the tendency towards remote work. So I do think that cities are still going to be the hubs of innovation. I think that urbanization will continue, maybe at a somewhat slower rate than has been the case in the past couple of years. But the sort of trends we see in technology if anything suggests that this is likely to continue.

The impact of cities and alcohol prohibition on innovation. 

James Taylor 
I'm sure maybe a question you get after you're spoken. You're given a keynote, you know, you come off stage, you're having a coffee with some of the CEO, some of the executives afterward, I'm sure you probably get is like, I've got a five-year-old, I've got young daughter, son, how do I prepare them for this new age? What skills or competence should we be developing? in them? Oh, shoot, I just, you know, just let's just carry on, let them get let them do their thing. Is there anything that we can do maybe as parents to help prepare our children for this new generation, this new age?

Carl Benedikt Frey 
Well, one thing that has certainly declined over the past 10 months is those offstage conversations.

Carl Benedikt Frey 
Remember that

Carl Benedikt Frey 
when you go to conferences, it's not necessarily the presentations that are the most interesting things. It's the dinner conversations are the random interactions. And to go back to what we just discussed, I think those are very important for innovation. And studies also show that when important conferences get canceled, innovation suffers as a consequence of that, yes, we do see that, if you look at the geographic distance between patent applicants on the same patent, that has been increasing exponentially since the 1990s. So we know that people can collaborate well at distance, but those people have to meet someplace in order to decide to collaborate. And those interactions can happen at work, they can happen at conferences, and they can even happen at bars and restaurants. There's a reason paper that came income out a couple of months ago, showing actually that prohibition reduced innovation, because people no longer met sporadically at the same access to the same extent, in bars and salons. In the US,

Which skills we should all be developing in this new age

James Taylor 
so so I'm interested in that. I'm interested that is I was gonna ask you for a follow-up to that. Is that where do your new ideas go for coming from? Where do you go for inspiration? So is the answer to that, to find whether those speakeasy bars is that was that word that does it for you? Or, or nature? What what, where do you go about in terms of getting your inspiration?

Carl Benedikt Frey 
Well, I think it's a combination of things, right. So it can be sometimes at work, it can be at the conference, it can be a couple of drinks at the pub, sometimes, you know, you go for a walk, and you connect to ideas from other interactions you just have. So I think it happens in quite random, and ways that are very hard to plan. But it doesn't happen when I sit by myself and come in front of my computer screen. And at home. I think that's, that's important to remember. So it's very much randomness, it's very much interacting with other people in very different settings. But to go back to your original question about what people should study. So I think what you do want to study or learn are things that computers do badly. And the good news is there is that is usually things that we enjoy, like complex social interactions, machines still perform very poorly, or in the creative type of tasks. So when it comes to developing novel ideas and artifacts, machines are still nowhere near a human-level capability. Now, you can argue, you know, can you teach people to be more social, okay, teach people to be more creative. Well, you can certainly do that in the way you teach. rights. If you teach children, for example, in smaller groups, we debate and discuss and interact and write essays, for example, then you do foster both social and creative skills. So those are skills that you know, are applicable to the arts as they are to science and engineering tasks as well. And so my advice is always to try to do what computers don't do well, and try to figure out what you're good at.

James Taylor 
Now, for a book about talking about technology, we've actually talked very little about the technology itself. So I'm just gonna ask one question, you start to finish up here, you talk about this idea of augmenting, you can a difference between enabling, augmenting versus replacing, are there any just even simple technologies that you find very useful in augmenting your creative work as an author, as an academic, as a researcher, it could be an app or a tool or an online resource that you find very useful for the work you do?

Carl Benedikt Frey 
Well, there are many sources of tools. So I mean, it's hard for me even to imagine the work that, you know, economists a couple of generations before me did when they were, you know, do all the calculations manually, and, and all the regressions manually, right? Now, we have statistical software that, you know, runs that better in split seconds. So I mean, it's, you know, unbelievable, how much, you know, our research capabilities have been improved by statistical software. And, you know, anybody who writes and can certainly sort of, you know, relate to the fact that you can just delete a sentence and start all over again, you don't have to sort of scribble it down on a paper note, and then sort of leave from there or writing type page. So I think there's a number of tools that made my life a lot easier for sure.

James Taylor 
So final question for your call, I want you to imagine you wake up tomorrow morning, and you have to start from scratch, choose Oxford to choose anywhere in the world you want. So you got all the tools, your trade, all the knowledge you have acquired over the years, and the work you do. But no one knows you. And you know, no one. So you have to start again. What would you do? How would you restart things?

Carl Benedikt Frey 
Well, I never thought about it that way to be completely honest with you. And I don't know how to do that, because that will be my first trial. So I guess that would be a process of exploration. You know, the way that you know, children learn is by looking at other people copying behavior and trying to learn from that. And so you're saying the knowing everything I do know now. So I sort of like my life. I wouldn't want to be anybody else. I enjoy writing papers. I enjoy reading, learning about things. And I enjoy being on podcasts and speaking to interesting people. So my guess is I wouldn't do too much differently, to be honest with you.

James Taylor 
Well, Carl, thank you so much for coming on the show today. The book is called the technology trap. If people want to learn more about your your other projects, your other writing your papers, where's the best place for them to go and do that?

Carl Benedikt Frey 
So I have a website, which is called Benedikt Frey, and.com, where all my papers and all my research is listed and which is updated on a regular basis.

James Taylor

Well, Carl Benedikt, great, thank you so much for coming on today and sharing with us all about your creative life.

Carl Benedikt Frey 
It's been a pleasure, Dave. Thanks for Thanks for having me.

James Taylor 
You can subscribe to the super creativity podcast on Spotify, Apple Podcasts, or wherever you get your podcasts. While you're there, leave us a review. I really appreciate it. I'm James Taylor, and you've been listening to the super creativity podcast.