We’ve all underestimated the speed and impact of the information revolution. As a result, the impact on today’s economic ecosystem has gone unchecked and has largely contributed to the now strong nationalistic attitude in the current political environment.
As a technologist who routinely works to automate processes providing software solutions that “reduce the number of resources needed” or the “efficiency of operations” in business, I’ve been on the front line of the information revolution for my entire adult life and can now see first-hand the result.
The Background:
I entered the workforce in 1984 when software was beginning to impact the broader economy. It was clear that the information revolution would affect large businesses in part due to the massive computing systems that big enterprises could afford. It was the 90’s, however, that saw the advent of smaller and more personal computing devices that drove the impact of “Moore’s Law” on the economy as a whole.
Moore’s Law is the observation that over the history of computing hardware, the number of transistors in a dense integrated circuit has doubled approximately every two years.
This phenomenon has resulted in the exponential growth of computing power that puts the equivalent of “all the computing power of NASA in 1969” in the palm of your hands today.
As a major contributor to the information revolution, both as a producer and also as a leader in the industry, in hindsight, it has become apparent to me that the impact our efforts have had on the job market has been far worse than we all expected. For decades, IT professionals have discussed job impacts as a result of automation and software solutions. These discussions, all at the micro level, did not make us aware of the impact we were having at the macro level. For example, when affecting an operational performance objective by 50%, which in turn affected five jobs resulting in job redeployment and “downsizing”, it was unclear the tsunami effect that we were all creating. The cumulative economic effect of all this work by hundreds of thousands of projects per year is staggering. According to PMI (The Project Management Institute) and its 2015 Global Jobs Report, between 2010 and 2020, 15.7 million new project management roles will be created globally in this timeframe. That’s a lot of investment in jobs that drive projects in the business of information technology that is focused primarily on productivity gains. This statistic is just one of the important economic impact indicators. Gartner’s yearly IT spending forecast which summarizes the global investment in IT spending has been and is expected to run in the 3.5 Trillion US Dollars in spend annually from 2014 through 2020. Ultimately, this amount of effort spread across now decades has had a substantial impact on job availability.
As a result, Information Technology has been building a pipeline of unemployment that, while trying to be countered by employment initiatives, was having an unknown draining effect on jobs. That is, as the world sought to fill the employment pool with jobs, technology initiatives were draining it at the same time. A draining that we “knew was happening”, but did not see the gross, exponential effect being driven by Moore’s Law.
It has become evident to me, and perhaps to many others, that the information revolution has created the turmoil and discontent that we see in the headlines today. From the rise of Donald Trump in United States politics and the isolation he is selling to the recent UK Brexit vote that has thrown the global economy into turmoil, people are demanding opportunities and are extremely unhappy with the prospects of individual economic opportunity in the future.
Research reveals little talk about the correlation between productivity and employment. However, at the center of this discontent, is the impact of technology on the job market. David Rotman published in the June 12, 2013, MIT Technology Review, How Technology Is Destroying Jobs, the correlation analysis that is superbly summarized by Figure 1 below:
This article further quotes Erik Brynjolfsson, a professor at the MIT Sloan School, where he covers that “they began writing Race Against the Machine, the 2011 book in which they laid out much of their argument, because they wanted to explain the economic benefits of these new technologies (Brynjolfsson spent much of the 1990s sniffing out evidence that information technology was boosting rates of productivity). But it became clear to them that the same technologies making many jobs safer, easier, and more productive were also reducing the demand for many types of human workers.”
It is now apparent to many of us that the reduced demand for human workers is driving today’s unrest. Many on both sides of the political aisle blame globalization, trade agreements, and many other causes. The data and life stories of the people who support Donald Trump paints a different picture. Our focus is misplaced.
It’s not to say that the agreements mentioned above and globalization trends don’t contribute, but it is clear that the computer and software automation of today has not been considered in these debates and the resulting increase in productivity and the stagnation of wages that resulted combine to leave many people behind.
Isolation is the drum beat being sold by many as the solution to the economic crisis of today because it is now a common belief that it is the global economy that is impacting jobs.
My hypothesis, in fact, is that isolation will not slow down this effect, but may, in fact, increase it. The economy is a very complex, interdependent beast. As a result, with the dependencies that have been built into all economies, the education of today’s and tomorrow’s active workforce, and the cross-border dependencies of the information economy, an isolationist approach will not only dampen demand for the modern workforce with overseas efforts, but will result in a supply, that when turned inward, will lead to more automation and process productivity that creates a stronger downward weight on wages and human capital more quickly in the isolated country. It’s only natural that businesses will, in an isolated economy, focus on productivity in other areas that had previously been left untouched due to other conflicting software development priorities.
The Solution:
The first order of business in solving any problem is a 100% understanding of the problem. The Trump campaign is filled, from its leader to its first line of supporters, with people who don’t seem to care to understand the problems and are manipulating the United States with fear and misinformation being driven substantially for their own personal gain.
Bernie Sanders published yesterday a New York Time’s Op-Ed in which he has some great ideas for employment opportunities by working on climate change and upgrading the aging fossil based fuel systems. Clearly, jobs can be created by the formation of industries and projects that are required to continue to fuel our future, but although the typical government job creation program is important, it isn’t the solution. With that said, the strain on the job market created by decades of automation will take decades to address.
First and foremost, software projects should consider an evaluation, measurement, and impact on the human capital for every solution being generated. That is:
- What are the number of people affected by a new software solution,
- What opportunities are there for the redeployment and retraining of those individuals affected,
- What portion of savings or ROI generated by software projects should be set aside to handle and provide services for the human capital that are being displaced?
Let’s be clear, when there is an industry who’s objective and subsequent bonuses are measured by the money it saves through automation and productivity improvements, that industry is in the business of eliminating jobs. The industry is paid, is oriented, and is racing to eliminate jobs faster than its competition. Remember, the largest cost factor in any business is human capital. I’m not suggesting that the “information revolution” genie can be put back in the bottle nor should it, however, an understanding of its effects and a plan to counter those effects MUST be established. If not, the barren employment landscape, discontent, and fear-based politics will continue.