Automation is a societal imperative to address today’s pressing challenges

Enterprise automation has been a hot topic in the last few years, and the common belief is that it is a double-edged sword, which has the potential to inflict severe damage to the vitality of the enterprise.

A new research, conducted by the Information Technology and Innovation Foundation (ITIF) and the Leading Edge Forum, argues that automation is not a cause for alarm. Instead, it is a societal imperative for modern nations to address today’s seemingly intractable challenges, such as ever-increasing resource constraints and sluggish wage growth.

The report emphasizes that innovations are needed to overcome today’s stagnant public and private sector productivity and to free up human capacity, talent, ingenuity, and other resources so the workforce can entirely focus on the exciting possibilities of the future.

The EU and US economies, in fact, need a growth booster that we witnessed with developments in electromechanics and materials (steel, chemicals, plastics, etc.) in the 1950s and early 1960s, and again with advances in information and communications technology (ICT) in the 1990s (personal computers, the Web, internet, etc.). In reality, both economies are now in a downturn in productivity.

Throughout 2008 and 2017, labor productivity inched at just 1.2 percent per year in the United States. It is half the rate of the prior 13 years. Likewise, labor productivity has risen at only 0.7 percent per year in the 28 EU member states. Since the financial crisis, though there are debates as to whether the decline in productivity is genuine or represents measurement problems, the body of evidence shows that the slowdown is not just a measurement effect.

Average annual labor productivity growth in EU-15 and U.S., 1980–2017

Unfortunately, today’s debates on automation almost entirely focus on the potential downsides. We are continuously cautioned from both the left and the right that new technologies — especially AI and robotics — will kill tens of millions of jobs and even decrease human value. The report disagrees with these now widely shared perspectives.

Key Takeaways

  1. Increased automation could significantly boost economic efficiency, which would help address problems such as wage growth, aging populations, increasing health-care costs, regeneration of the climate, global competitiveness, and public debt.
  2. The EU and US markets are in a downturn when it comes to efficiency, one of the explanations for stagnating income and GDP increases, making it increasingly impossible for policymakers and citizens to satisfy their political and financial obligations.
  3. Increases in productivity in the EU and the US will rehabilitate jobs, make the cost of aging populations sustainable, raise incomes and living standards, lower debt-to-GDP rates, and free up human capital and other tools for new social challenges.
  4. Large enterprises — both public and private — must accelerate technology and its associated productivity gains, because many of today’s most promising digital initiatives can only be brought to life by large organizations and the industries they serve.
  5. Public policies must encourage the transformation of large companies and their associated industries and environments by ensuring that the necessary changes are not impeded by legislation, guidelines, regulations, benefits, political attitudes, and expertise of the employee.

The report recommends that governments should support automation in three main ways to overcome today’s challenges and accelerate change throughout the 2020s:

  1. Recognize that leadership in the public sector will be vital to developing relevant new social networks in fields such as: health records, smart cities and grids; effective detection and authentication; productive transactions and taxation; precise control of satellites and drones; secure distributed information and open data; more advanced safety and law enforcement; and relevant security;
  2. Help the transformation of mainstream businesses, particularly public companies, and their associated industries by making sure the legislation, policies, regulations, benefits, obligations, political attitudes, and capabilities of the workforce do not serve as obstacles to the necessary changes.
  3. Look around the world to see where creative social platforms are developing and accept these lessons readily to step up the speed of automation. Smaller nations are often going to be significant leaders of the social platform.

You can read more findings and recommendations here.