From productivity to regenerativity? The future of work in a digital economy
That the digital economy is changing the way we work is undisputed. But will it - in particular the development of artificial intelligence (AI) and robotics - lead to major productivity growth? A head-to-head debate whether the answer to this is yes or no between two leading academic economists opened the first panel of this year’s Brussels Economic Forum. It included a before-and-after the debate audience vote on the issue, with a surprising outcome.
The panel itself then discussed the merits and the risks connected to changes in the nature of work affected by the digital economy more generally, adding differing viewpoints: that of a trade union, a development NGO and a protagonist of the digital economy.
The motion "This forum believes that digitalisation, robotisation and artificial intelligence will create a major revival of productivity growth" pitched Professor Robert Gordon of Northwestern University and Jeremy Rifkin, the President of the Foundation on Economic Trends against each other.
A vote was held among the audience before the debate started. It showed that 88% believed the motion to be true, while 12% did not. Professor Gordon opened the debate by arguing against it, firstly defining “major revival” as 2.5 to 3.0 % growth and conceding that he would not exclude a minor one of 1.0 to 1.5 %.
He pointed out that digitalisation, robotisation and AI are nothing new. They have been with us since the 1950s as far as digitalisation is concerned, when the first mainframes were introduced, the 1960s in the case of robotics and the early 2000s for AI. They are all part of the third industrial revolution and are evolving. Professor Gordon showed that this process has been accompanied by a steady decline in productivity growth so far, reflecting a diminishing impact of innovation on the economy. The first and second industrial revolutions (steam, coal and weaving machines in the 18th century; electricity, oil and chemicals in the 20th) had simply been more important, he argued. No significant change to this trend was to be expected, as much of the third revolution had already happened.
Jeremy Rifkin then argued for the motion. While much of what his opponent had put forward was indisputable, Rifkin said he had not taken into account the fact that we are in the middle of an existential crisis for humankind. Climate change and a mass extinction of species unprecedented in historic times are putting our own survival at risk. “The world is asleep at the wheel,” he said.
To avert catastrophic consequences, our existing, and still mainly fossil-fuel based economy would have to be transformed completely. The digital revolution is giving us the tools to do this, Mr Rifkin argued, but they have not yet been fully developed. We already have the internet of information but an internet of energy generation and distribution, based on decentralised but interconnected renewables, and an internet of mobility, based on autonomous, electric vehicles is still to come into global significance. The retirement of the old combustion structure (“850 million fossil-fuelled cars will have to be recycled”) and the assembling of the new on a global scale would lead to a major boost to the economy. However, Mr Rifkin qualified this claim by saying that GDP and productivity growth were categories not fully adequate to measure this boost. He offered the notion of “regenerativity” as an alternative to productivity better suited to our times.
Perhaps it was this qualification that contributed to the result of the second vote on the motion by the audience which surprised everybody. It showed a neat fifty-fifty split.
The panel discussion on the wider topic of the future of work included Winnie Byanyima, Executive Director - OXFAM International, Sharan Burrow, General Secretary, International Trade Union Confederation, and Pierre-Dimitri Gore-Coty, Vice-President & EMEA Regional General Manager, Uber.
Ms Burrow identified the shortcomings of the digital economy as running on business models that still lack adequate regulation and rely on exploitation of freelance workers. She demanded the companies concerned to allow collective bargaining and agree to a fair taxation of their profits.
Ms Byanyima pointed to digital companies’ distinctly minimalist attitude concerning their responsibility towards society, reflected for instance in a rise of shareholders’ take-home of companies’ profits from on average 10% some decades ago to 70% among the digital economy now.
Mr Gore-Coty admitted that his company, Uber, had not done “everything right in the past” but that now “we take social responsibility very seriously”. He identified as one of the company’s ethical pillars the provision of access to the job market to people who had been excluded from it before by offering a unique flexibility to the worker. From his point of view, regulators are now called upon to update social security systems to fit the sharing economy. Uber, Mr Gore-Coty, claimed, would play its part in it constructively.
