Lawrence H. Summers, the former Treasury secretary, recently said that he no longer believed that automation would always create new jobs. “This isn’t some hypothetical future possibility,” he said. “This is something that’s emerging before us right now.”
I have seen many articles concerned that technology is going to swallow work. It is difficult to believe this is true. The first issue is that people over-estimate how quickly technology penetrates the market and is adopted. Some examples of technologies that we are still waiting to hit tipping points include electric vehicles and solar panels. The second issue is that we have a large collection of unsolved problems in areas like mental heatlh, medicine, and education for which solutions would provide huge economic benefit to society. If investors want to find their next source of growth for capital they will move into these areas and that will create jobs to replace those that are lost.
A common counterargument is that these new jobs require new skills and are more difficult to learn than previous jobs. Yet the trend appears to be in the opposite direction. Previously becoming a taxi driver required learning the cityscape, now the GPS will do the navigation for you and even factor in real-time traffic data. Publishing a newspaper or music album required the resources of large organizations, now you can do it yourself with equipment that works better than what many professionals were using years ago. Companies like PayPal, Square, and Stripe make it easy for people to accept payments for their work. YouTube and content creators like Khan Academy offer videos on how to do things from differential equations to car repair.
The economy may be changing, but these changes will benefit us all in the long run.