This is my last blog for the Saporta Report, although you may hear from me again in a guest article or two. I have relocated my blog to TAGThink, on the web site of the Technology Association of Georgia. I hope you will visit me there.
Looking back, I never could have anticipated becoming so interested in the topic of whether technological innovation creates jobs. I frequently wrote about this topic because it is important. There is a pervasive, ongoing national debate about whether technology is a good thing (creating jobs) or bad thing (destroying jobs). Both sides appear to agree that, at least in the short term, technological innovation destroys jobs. According to an Associated Press study, most of the jobs lost in the Great Recession will never return, because they have been “obliterated by technology.”
How can innovation destroy jobs, yet still be a force of economic growth and job creation? On many occasions my blog discussed the creative destruction of capitalism, a theory advanced by Joseph Schumpeter. I also discussed the views of Harvard Business School Professor Clayton Christensen, who confirmed that some innovations create or sustain economic growth, but many “efficiency innovations” do lead to the loss of jobs, at least in the short run. Schumpeter, Christensen and others contend that, by destroying jobs, innovation frees up resources that can be better deployed, resulting ultimately in the creation of new jobs.
So are we justified in putting our faith in technological innovation? Clearly the job losses associated with creative destruction are painful, but time and again “historical fears of technological change look foolish, given that automation has increased living standards and rendered our workweeks both safer and shorter.” www.nytimes.com/2013/02/03/sunday-review/raging-again-against-the-robots.html?ref=todayspaper
Historically, technological change has led to economic rejuvenation and growth, but will it be different this time? Have we planted the seeds of our own obsolescence? What should we do to promote growth?
Some say that education, the right kind of education, is the answer. That may be true, but in a world of accelerating change, do we know what kind of education or training is required? For example, I wrote about a “new age” manufacturing job, involving the supervision and operation of robots. The job required training. Even at a time of persistent unemployment, some of these jobs have gone unfilled. Because of global competitive pressures, the wages for this job are comparable to the wages of a McDonald’s assistant manager, and seemingly not high enough to attract qualified applicants. www.saportareport.com/leadership/technology/2012/11/26/the-creative-destruction-of-capitalism-robotics/
One comment to my blog suggested it would be “xenophobic” to consider the effect of technology from a US perspective. I’m not sure I agree. When we celebrate innovation among Georgia companies, we are at least indirectly showcasing the ability of Georgia to compete with other States and our companies to compete globally. If manufacturing automation leads to job losses worldwide, but the US could recapture some manufacturing jobs through superior robotics technology, wouldn’t that be a good thing, on balance? I guess my point is that technological innovations are going to happen, so we may as well do whatever we can to best position ourselves to create, sustain and/or exploit those innovations.
What I learned during the past year has influenced the direction of my startup tech business. I learned that technology is obliterating good middle class jobs, including sales representative jobs. Recognizing that many sales rep functions are becoming increasingly automated, our Sales Power-Tools subsidiary has designed efficiency tools that will help businesses eliminate sales managers and enable sales reps to do their jobs more efficiently (since there will be fewer of them). Moreover, we are designing algorithms that will enable businesses to eliminate sales reps altogether in some cases.
In closing, thank you for reading this blog on the Saporta Report. I hope you will visit my new blog at TAGThink where I expect to continue exploring the creative destruction of capitalism, as well as describing happenings in the local technology community, especially the upcoming Georgia Technology Summit and TAG’s Top 40 Innovative Companies competition.