Technological progress is by far the best way to improve quality of life
An empirically noticeable phenomena throughout modern history is the relationship between technology and economic growth. Though there may be lags between a scientific discovery, the new technology it creates, and the businesses that bring that technology to the public, the process itself is quite routine. From the Industrial Revolution onwards, new technology has rapidly improved productivity, meaning that more stuff is made with less labour. These technological productivity gains have lowered costs, raised output, and in many cases vastly improved the quality of products. The central role of technology to economic growth is the reason the entrepreneur plays such a central role in the economy, that by bearing the market risk to turn a technological potential into an economic reality, they are rewarded handsomely by consumers.
Though entrepreneurial innovation has generally been slow since the financial crisis, with new regulations, and lower access to capital reducing the rise of new businesses, it seems that policy makers are now to reverse the trend. The slow economic and productivity growth that has occurred recently is worrying, especially as European populations age, meaning more pensioners with a reduced workforce. Productivity growth, something that has been nearly non-existent in the UK for the last decade, is the best means by which wages rise at a faster rate than inflation, helping provide greater prosperity. Recent initiatives such as the Government’s push for new startups, and the Bank of England investment into FinTech firms, are steps to help capitalise on the exciting new technologies coming out such as Artificial Intelligence, Advanced Robotics, and the Internet of Things.
If entrepreneurs capitalise on these new technologies, the increased productivity may help compensate for the shortfall that has occurred in recent years. Similarly, technology can revolutionise the way our systems are currently run. The advance of Big Data, which is the availability of high volume, high velocity, and varied data, has already begun to change the economic landscape. As more data becomes available through use of things such as social media, or even the presence of technology that registers data in other environments, such as the Oyster card, companies are able to make greater efficiency improvements, and plan for the future more effectively. The volume of data being collected has also been responsible for huge leaps in Artificial Intelligence, providing data to train algorithms to respond to real world situations. This has vastly improved the capabilities of Artificial Intelligence, with McKinsey Global Institute estimating that current technologies can already automate 45% of global labour activities.
Advances such as Google’s self-driving car greatly improve upon the safety of automobiles, and can help improve transport efficiency. The underlying technology of computer vision can help improve productivity in all manner of logistics, warehousing, and transport functions. Amazon’s Alexa, one of the most advanced virtual assistants, is helping make smart homes a reality, with appliance makers preparing to integrate various functions of the home such as washing machines and fridges with the voice activated technology. It’s only a matter of time before these technologies move into the retail sector, as the successful CafeX has demonstrated in San Francisco. The more integrated these technologies become into our daily lives, the more data is collected, and the more efficient they become. By capitalising on these technologies, and allowing more businesses to experiment with ways to create new products, greater productivity and prosperity may be possible.
Commentators, however, have expressed fears about the rapid advances of Artificial Intelligence, with big-name thinkers such as Elon Musk even stating their fears over AI’s potential. Martin Ford, a renowned futurist, expresses great fear that the productivity that new technologies bring may simultaneously cause mass unemployment and widen inequality, in his book Rise of the Robots. An increased pessimism has added to the barriers to bringing about new technologies. It would be overly simplistic to dismiss these commentators as Luddites, those textile workers who destroyed mills in the 19th Century for fear of unemployment, by showing them the historical improvements that have come along with technological progress. Technology has generally produced far more jobs than it has destroyed, and better ones at that. There’s no doubt that most people prefer the luxury of working in an air-conditioned office with a stable salary, as opposed to outdoors on a farm with uncertainty over their crop yields. While this has historically been the case, it would be an inductive fallacy to assume it must be the case the next time. It may very well be that our technological potential is so advanced, that realising it would cause more harm than good.
This does not mean that progress should be abandoned, but rather that large scale social change would have to accompany economic change. In the Obama administration’s report on Artificial Intelligence, a significant focus was placed on education and retraining to prepare for the new economy. Similarly, labour laws might need to adapt significantly for a less stable and traditional work environment. Some thinkers, such as Stephen Hawking, have even suggested that this new tech will be so productive we may not need to work, and that our concerns will only be around distribution. Though this is quite unlikely, at least in the short-term, it is an interesting thing concept to consider. As technology improves, and does more and more tasks better than us, our attention should turn to what we cannot automate, those extremely human abilities such as emotional intelligence and creativity that a robot can never replicate. While it may cause problems in the short-term, technological progress is by far the best means by which to improve quality of life, and its continuation should be invested in heavily.
Ryan Khurana is an IEA intern and studies Politics, Philosophy, and Economics at the University of Manchester.
As with all IEA publications, the views expressed are those of the authors and not those of the Institute (which has no corporate view), its managing trustees, Academic Advisory Council or senior staff.