by Alastair Fitzpayne, Executive Director, Aspen Institute Future of Work Initiative

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21st century solutions for an automated economy

Automation is transforming the global economy – we need innovative solutions to address both the opportunities and challenges it presents.

 

Countries around the world are grappling with the challenges and opportunities of automation. This year in the United States, the Port of Los Angeles experienced a heated debate over the impact that automation could have on dockworkers. By contrast, China is adopting automation at a breakneck pace. A recent story highlighted that a warehouse in China processes hundreds of thousands of orders a day with only four human employees. Similarly, in Japan, robots are helping to care for the country’s growing elderly population. And there are examples every month of new technologies performing tasks that we once thought only humans could perform.

 

This isn’t the first time countries have faced and debated the opportunities and challenges of increased automation. As the transition from an agrarian to an industrial economy demonstrated, automation can create new jobs, fuel economic growth, raise incomes and increase standards of living.  At the same time, from the Luddites of the 19th century to manufacturing workers of the 20th century, there is a long history of automation also resulting in widespread job loss and economic dislocation for workers and communities. 

 

A question that animates today’s conversations around the future of work is whether the 21st century version of automation will be different and more disruptive than what we have experienced in the past. Democratic US presidential candidate Andrew Yang is running a campaign based on this proposition. Many economists argue the opposite point – if automation were truly as disruptive as some suggest, productivity in the US and in other countries would be stronger than it is presently.

 

The endless speculation about what the future will bring misses an important reality of the present: the United States does not have adequate systems in place to manage the level of disruption we are experiencing today, never mind what might happen in the future. The last 40 years have brought dramatic changes from globalisation and automation that have led to a labour market that is characterised by higher levels of financial insecurity and precarious work arrangements. For this reason alone, we need to develop better solutions for those who have been or will be left behind by technological change.

 

What should be done? Firstly, policymakers should develop policies that encourage greater business investment in workers in order to level the playing field between investments in capital and labour. Employers are uniquely positioned to help workers prepare for automation, and understand the skills needed for the jobs of the future. But unfortunately, employer-provided training has been declining in the United States. By creating a worker training tax credit that could be used to offset a portion of the cost of new training activities for low-paid workers, policymakers could encourage greater investments in labour.

 

Secondly, employers and educational institutions should expand apprenticeship programmes. As automation changes the skills necessary to perform many jobs, workers will need access to programmes that provide in-demand skills leading to well-paying, secure jobs and careers. By incorporating work-based learning, apprenticeships provide workers with hands-on training and relevant skills. Yet despite their effectiveness at connecting workers with in-demand jobs, apprenticeships are relatively limited in the US when compared with other countries. Policymakers also have a role to play here and could provide incentives for employers and educators to form partnerships that facilitate apprenticeships. 

 

Thirdly, employers should adopt a multi-stakeholder approach to decisions around how automation is implemented, whether by promoting new forms of worker input and ownership, or by developing proactive strategies to identify jobs that will be impacted by automation and develop strategies to help workers transition to new jobs. As the example of autonomous vehicles suggests, layoffs cannot always be avoided, but transition planning should include employers, policymakers, educational institutions, and non-profits. Efforts in states such as California, New Jersey and Indiana are bringing together these stakeholders to identify solutions that can help workers adjust to disruptions in the economy. 

 

Finally, innovation should be encouraged. But it should be done while also understanding that we have the ability to shape the impact of technology through explicit choices that policymakers, employers and labour collectively make. With the right set of policies and business practices, we can create an economy that promotes innovation, while ensuring economic security and opportunity.


To find out more about these policy proposals and others as part of a comprehensive framework to address automation’s challenges and opportunities, please click here. 

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