Don't fear the robots, and other lessons from a study of the digital economy

RAFAEL Reif, president of the Massachusetts Institute of Technology (MIT), delivered an intellectual call to arms to the university's faculty in November 2017: Help generate insights into how advancing technology has changed and will change the workforce, and what policies would create opportunity for more Americans in the digital economy.

That issue, he wrote, is the "defining challenge of our time". Three years later, the task force assembled to address it is publishing its wide-ranging conclusions. The 92-page report, The Work of the Future: Building Better Jobs in an Age of Intelligent Machines, was released on Tuesday.

The group is made up of MIT professors and graduate students, researchers from other universities, and an advisory board of corporate executives, government officials, educators and labour leaders. In an extraordinarily comprehensive effort, they included labour market analysis, field studies and policy suggestions for changes in skills-training programmes, the tax code, labour laws and minimum wage rates.

Here are four of the key findings in the report.

It is well known that those on the top rungs of the job ladder have prospered for decades while wages for average American workers have stagnated.

But the MIT analysis goes further. It found, for example, that real wages for men without four-year college degrees have declined 10-20 per cent since their peak in 1980. (Two-thirds of American workers do not have four-year college degrees.) The US economy produces larger wage gaps, proportionately fewer high-quality jobs and less intergenerational mobility than most other developed nations do, the researchers found. And America does not seem to get a compensating payoff in growth.

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"The US is getting a low 'return' on its inequality," the report said.

Nor does the lagging position of American workers appear to be the result of technology.

"It's not that we have better technology, automating more middle-wage jobs," said David Autor, an MIT labour economist and a co-author of the report. "We have worse institutions."

Technology has always replaced some jobs, created new ones and changed others. The question is whether things will be different this time as robots and artificial intelligence (AI) quickly take over for humans on factory floors and in offices.

The MIT researchers concluded that the change would be more evolutionary than revolutionary. In fact, they wrote, "we anticipate that in the next two decades, industrialised countries will have more job openings than workers to fill them".

That judgment is informed by field research in several industries and sectors including insurance, healthcare, driverless vehicles, logistics and warehouses, advanced manufacturing, and small and medium-sized manufacturers.

For self-driving cars and lorries, the MIT researchers concluded that widespread use was still a decade or more away. In warehouses, Amazon has made great strides with automated conveyance systems and some robotics - but its warehouses run on human labour, and will for years.

Despite advances, robots simply do not have the flexibility and dexterity of human workers. Today's robots learn from data and repetition. They can be remarkably adept at a certain task, but only that one. The report cited a fine-tuned gripping robot that could pluck a glazed doughnut and carefully place it in a box, with its shiny glaze undisturbed.

"But that gripper only works on doughnuts," the report said. "It can't pick up a clump of asparagus or a car tyre."

The cost and operational expertise required will also slow the widespread adoption of robots. A research team surveyed dozens of small and medium-sized manufacturers in Massachusetts, Ohio and Arizona, and found "very few robots anywhere." (Small and medium-sized companies, with fewer than 500 workers, account for 98 per cent of the nation's manufacturing firms and 43 per cent of manufacturing employment.)

"The key ingredient for success is public-private partnerships," said Annette Parker, president of South Central College, a community college in Minnesota, and a member of the advisory board to the MIT project.

The schools, non-profits and corporate-sponsored programmes that have succeeded in lifting people into middle-class jobs all echo her point: the need to link skills training to business demand.

Ms Parker points to the development of the hybrid field of "mechatronics", which combines basic mechanical, electronics and digital skills for maintaining modern machinery. Salaries go up to US$80,000, she said, adding that "everybody who is automating needs them".

"Technology companies have an obligation to help responsibly prepare society for these higher-skill jobs," said Ginni Rometty, executive chairman of IBM and a member of the MIT advisory board.

Google has a leading technology certificate programme. The online course typically takes three to six months, and graduates get a Google IT support professional certificate. More than 50 companies have pledged to recognise the Google certificate when hiring technology support staff. The programme is the most popular certificate course on Coursera, the online learning network.

The report recommends an employer training tax credit, similar to the current research and development tax credit, that can be applied only to industry-recognised certifications.

The report calls for raising the minimum wage (current campaigns are fighting to raise the level from US$8-9 an hour to US$15 an hour), broadening unemployment insurance and modifying labour laws to enable collective bargaining in occupations such as domestic and home-care workers and freelance workers.

Such representation, the report notes, could come from traditional unions or worker advocacy groups such as the National Domestic Workers Alliance, Jobs With Justice and the Freelancers Union.

The MIT researchers also recommend changes to tax laws that favour corporate spending on machines rather than workers. NYTIMES