The robots are coming: 8th Tommaso Padoa-Schioppa lecture by Nobel prize-winning economist Sir Christopher Pissarides
Technology is causing a structural transformation in our economies: this is how we can adapt
Europeans are used to changing their place of employment several times over a 40-year career. But today, even the jobs we do are changing at an unprecedented rate, pushing citizens to look for roles that matter in the face of competition from artificial intelligence. But Nobel prize-winning economist Sir Christopher Pissarides, who delivered the annual Tommaso Padoa-Schioppa lecture at this year’s Brussels Economic Forum, said there are no limits to the amount of jobs that a properly functioning economy can create and that governments have an important role to play in ensuring that society can benefit from such new technologies.
Technological change will create jobs as well as destroy them
New technologies such as advanced robotisation and artificial intelligence are causing a structural transformation in our economies and changing the nature of work and jobs, said Sir Christopher, a Professor of Economics and Political Science at the London School of Economics. While much has been said about the risks of these changes, "alongside the destruction of jobs by robots and artificial intelligence, there will be growth of employment opportunities elsewhere in the economy," he argued.
Sir Christopher also put the scale of the challenge in perspective, noting that the OECD’s estimate that 15-20% of jobs could be lost to automation over the next 20 years, was similar to the average rate of churn within advanced economies’ labour markets now.
Most of the new jobs will likely be created in the service sector where the nature of work is non-routine, he said, citing the health and entertainment sectors two areas that are likely to increase in importance as a result of demographic trends. However, "any activity that involves judgement independently of data processing will remain in human hands," he said.
“There is no doubt in my mind that a well-functioning economy can employ all those who want to work,” said Sir Christopher, arguing that “the experience of economic growth in the second half of the 20th century is that economies can create jobs without limits, except the willingness to work.”
Preparing ourselves for the machines
To benefit from the creative destruction of new technologies, Europe needs to address a number of obstacles, including excessive administrative burdens as well as the need for labour and product market reforms.
Governments have an important role to play, particularly in ensuring that workers have the skills they need. Life-long learning was also important, but the most successful training programmes tended to be run by employers rather than governments, he said.
“Preparation needs to start in school,” said Sir Christopher, adding that in addition to STEM skills (science, technology, engineering and maths), soft skills were equally important, particularly in service sector jobs, and were presently not taught in schools at all.
"Social skills are undervalued currently," Pissarides said. "The hidden this sends is that the jobs lost to automation are good, whereas the ones that will be created will be less good."
"Decades if not centuries of education have conditioned us to thinking that a proper education is one that teaches science, mathematics, literature, history and geography, but not “soft” subjects like sociology and social psychology."
Attitudes also need to evolve
This has to change if the new jobs that will be created in service sectors, such as caring for the elderly, are to become well-paid, desirable jobs that young people will be proud to enter, the LSE professor said.
Sir Christopher pointed to the restaurant industry as an example of how the social status of jobs can change.
Appreciation of “good food” in restaurants is a "fairly recent phenomenon" in many countries, he explained.
This appreciation has led to "an upgrading of the social standing of the occupation of a chef with the result that it is now a sought-after occupation," he said. "Similar developments should be encouraged in other occupations."
Marco Buti, Director-General of the European Commission Directorate-General for Economic and Financial Affairs, said it was time for the EU to consider "how Brussels can shape the new global order, in a situation that is in disarray."
"There is a sense the economic paradigm is shifting," Buti said. "The population is not ready to take answers without questioning."