Transcripts For CSPAN3 Technology And The Workforce Panel 2

Problems that may only be applicable or of interest 20 of individuals. 20 of households. Not everybody does yoga or, you know, we saw propane tanks that were, you could connect to the internet so you could know by looking at your smartphone how full they were. And thats probably not applicable to everyone because not everyone uses a gas grill. We start to move into these smaller niche markets. Actually, i have the opposite response. I think what because the cost of experimentation is so low in the market 9utn, what you actua see is sort of 1,000 experiments, 999 of them fail utterly, but when consumers find the right one, got the thing right. We talked in our book about the game draw something. And how went from zero to millions of users in a matter of days. For whatever reason they got it right, and what happens now, consumers essentially tell each other. It not, you know, its not broadcast marketing like it used to be. Its social media based. They say, all right. This is the one that works. This is the right television, the right smartphone, the right app. Whatever the Consumer Product is. Particularly for electronics is consumers as a group, figure out the winner. And that winner really is very much a winner take all in a lot of these markets. Very short winner take all markets, but essentially one experiment or a couple of experiments succeed. The rest all fail. The cost wasnt that much in the first place. So the investors, whoever they are are willing to keep that system going. Thank you very much. American history tv starts every night this week at 8 00 p. M. On cspan 3. Tonight, speakers look at the styles of modern first ladies, from Florence Harding to michelle obama. The Ohio State University at marion and the National First Ladies Library hosted a discussion starting at 8 00 p. M. Eastern time. Now, a forum discussing the impact of technology on the u. S. Economy and the workforce. Former treasury secretary larry summers, and Defense Advanced Research projects Agency Director and m. I. T. Digital Business Research scientist Andrew Mcafee offer their views at this Brookings Institution event. Thank you all for joining us this morning. My name is melissa carney. I have the privilege of moderating our First Panel Discussion this morning. This panel is going to take the premise that andy and erik laid out for us, that there has been rapid technological advance particularly in the information center. We will ask the question what does that imply for the future of work, the future of workers and the nature of employment in this country in particular . As we tried to lay out in our hamilton project framing paper there are a lot of views on this topic and in particular if this will be good or bad on that or how good or bad on that for society. Fortunately this morning we have a really expert group to discuss these issues with us. Truly, i would say some of the leading minds in the world on these very questions. You have their full bios in your program. I wont run through them in detail. I will just briefly introduce them. To my left is david otter, professor of economics at m. I. T. One of the nations leading labor economists who has probably contributed more to the nations literature on leading trends and labor market than any. We have larry summers, university professor, president emeritus at Harvard University and served in a number of senior policy positions including secretary of the treasury of the United States and director of the National Economic council. And Aneesh Chopra served as our First Nations Technology Officer appointed by president barak obama and served as the virginia leader of technology and now in a technology firm. And erik has already been introduced and still a professor at m. I. T. [ laughter ] the way we will do this, i will pose an opening question to each of our panelists and we will move to a moderated free flowing discussion and leave the final 10 minutes for audience q a. We will be collecting your questions on note cards which then will be brought up to the panel. David, im going to open it up with a question for you. You have written extensively about the nuanced relationship between technology and computers and workers, particularly noting that there are certain things that computers can do that substitute for tasks historically or traditionally performed by humans and other things computers do that complement tasks performed by humans. So, in light of your research and the framework that erik and andy have laid out for us, how do you see this all shaking out for workers . Thats a great question. Im honored to be part of this discussion and really like the work theyve written. Im glad this topic is getting the thoughtful discussion it deserves. 15, 20 years ago, erik and i started talking about this when i was a graduate student and erik was assistant professor. At that time we felt people werent taking this issue seriously, if anything, i thought people should not panic at this point. [ laughter ] i think there are a number of remarks i could make. I think theres reason for some skepticism about how fast things are actually moving and a lot of aggregate data that dont support the idea that the labor market is changing or economy changing as rapidly as the story so dramatically the premium for Higher Education has plateaued over the last 10 years and we see evidence highly skilled workers are moving have less rapid career directories, are important part of the puzzle and productivity not moving rapidly and a lot of growth has been in relatively low education with a Public Service element to it. Its easy looking at these examples to see an Inflection Point but when you look at the aggregate data theres nothing to suggest there is an Inflection Point. It could be in the wrong place, but a reason for skepticism for things not changing that rapidly. The second point i want to make, when we think about how technology interacts with labor markets we think of substitution of labor with machinery. Thats a completely natural thing to do because technologies are made to substitute tasks we were doing. Weve been substituting machinery for labor for as long as weve been able to think of ways to do that. Thats a first order effect, a mechanical effect we can automate transportation, we can automate calculation and automate information stories or retrieval. In general, what is neglected is that complements us as well. Many activities require a mixture of things. It requires a mixture of Information Processing and creativity, motor power and dexterity. If those things need to be done together if you make one cheaper and more productive, you increase the value of the other. Doctors have not become less valuable as medical technology has advanced, right . They can do more, diagnose more and that makes them more valuable. Ultimately, there are three things that sort of contribute to how an aggregate results in the production of technology. And one whether it directly substitutes you or helps you do÷ one thing so you can do something else. If you think about diagnosing medical testing obviously physicians can get a lot more information in the course of a day. The second is how elastic is the demand for those services . We are so much more productive in medicine, we could do all the medicine we did in 1950 in 10 minutes a week and people would probably be healthier given the state of medicine at that time. As people get better at it we get more of it partly because of the medical system and because the services are a much greater value and demand for them is quite elastic. Third, from a labor perspective, it matters how scarce the skillset is thats complemented. It takes a lot of education and training to become a doctor. When doctors become more productive, we dont just get an infinite number of doctors at minimum wage because they have to have a lot of training and it complements slowly and tends to raise incomes. There are many examples productivity increases lead to making jobs nngz interesting and challenging. Thats not the case. I dont want to take up too much time. Thats on one side of the labor market. On the other we see a lot of growth of work that requires generic skills and hard to automate. Let me make my final point. A lot of things that matters is how rapidly things change. If tomorrow amazon introduced the 1,000 bezo spot that could cook for you and clean your house and comes on amazon prime and you could have it by monday, that would be a dramatic advance and we would all buy it. It would be extremely productive because a lot of people, thats their primary activity, driving and childcare and cooking and lawn manicuring. If amazon said we will have this in 2045 for 1,000, we would be well situated to adjust to that, because people would recognize that was not the place they wanted to be over the long term for a career. It matters how quickly we get there. I think i think a lot of thef debate is not whether these things will occur but its whether were at the second half of the chessboard where the Inflection Pointing all of a sudden things are doubling from a small number to small number doubling again to a large number or whether its a very incremental process. I would say the academic Computer Science technology is very divided about this. If you go to Silicon Valley engineers believe everything will be accomplished immediately and you talk to the crowd, thats skeptical. This is hard and making progress not true 20, 30 years ago, but were a long way away. As andy said we live in very interesting times. Im sure we will revisit those ideas as we have our discussion. As our nations chief Technology Officer you were tasked with using technology and innovation to further our nations goals of job creation, reduced health care cost, protecting the homeland, tall order. Youve spoken very optimistically about the power of technology and innovation to improve our lives on a wide scale. Im curious to hear how your view of what technology has done compares to that as andy and erik laid out, and in particular, how have you Seen Technology impact a variety of sectors, including education and health care among others . Thank you very much for the question. I have three general observations, all very bullish on this next decade. The first starts with my first trip to google, which was probably in 06. I was virginia secretary of technology and we were trying to open up Government Data to search engines. To make it more accessible to the american people. Most people were getting information about government through search engines, not coming to the url of xyz. Gov. I saw this globe when i walked in which had a light emitted for every search on google. The globe was spinning. As you get to north korea, it was dark, this stark observation. Large swaths of africa and many parts of the world had darkness. You think about the american economy, what sectors are on that level of darkness as it impacts the internet has had on the sector. Health care, energy and education have not necessarily been plugged into the internet especially around data sets constrained by regulatory policy, medical records arent flourishing on the internet and your Energy Usage Data isnt flourishing on the internet. When you look at all this amazing capability and productivity gains in manufacturing and others you look to more than a quarter of the gdp, youre thinking these groups of sectors have been completely missing from this revolution. Obviously, incentives start to change and data opens up at the same time, you might see an explosion of innovation. Were seeing that now in health care. Weve made Great Strides opening up data, digitizing and eventually connecting medical records systems. More Venture Capital is flowing into this sector than you would have ever imagined, not necessarily because theyre trying to make the traditional system functioning incrementally better, now incentives are changing to reward a different type of Health Care Delivery system which makes it a wide open terrain for entrepreneurs. Thats very exciting because its creating new types of jobs that never existed before in the health care sector. Not all of which require a phd in physics. You can be a relatively low level employee whose utilizing the technologies to help on home health needs so forth. Category number one is were now opening up these big sectors to the internet age and i think that will bode well to ensure productivity gains hit them. Second, again when i was virginias technology secretary, the north carolinavirginia border used to be the worlds hot spot for furniture manufacturing. Thats it. We went through a policy of debates, those jobs arent coming back, how do we build a safety net down there and broadband is the answer and we did everything we could to improve that north carolinavirginia border. Something interesting happened around this concept of automation. Manufacturing is cheaper because you no longer have to have the same labor intensity and can insource jobs back to the u. S. At a faster rate in response to china. So ikea opens up a manufacturing plant for furniture. Where . Right in the heart of the north carolinavirginia border, the same place that was written off for its capacity to build furniture and youre being told in the neighborhood you have to do Different Things because your life as a furniture person is over. All of a sudden, robots as coworkers, automation, you can actually compete on a more effective footing. Were seeing that insourcing trend now all across the country. Manufacturing jobs are coming back. Theyre not the same labor intensity they were when they were previously here but thats still net positive. I would say the third observation if i had any is this democratization of entrepreneurship is pretty much the most exciting thing ive seen. In that same north carolinavirginia border, there are people who used to have parents and grandparents work in textiles as well. Now, theyre Building Designs for clothing that can be 3d printed or their intellectual property can be transmitted over the internet to textile production all over the world and theyre creating economic value in that same market because folks who didnt previously think of themselves as Silicon Valley entrepreneurs can plug in because of the democratization of capital innovation. Im really fired up over the impact this has in the next decade acknowledging in certain sectors the challenge. Too bullish . I dont know, but im very excited. Larry, to you, youve been thinking and commenting on these issues a long time and you wrote a 2013 npr piece. It raised a lot of the, i were talking about this morning. And you sponsored the center for American Progress on inclusive prosperity, the goal of the commission to address rising levels of income inequality and stagnant wages at the bottom of the distribution. In your thoughts and views on all of this, what do you see as the long run implications for the Macro Economy . Thanks, melissa and thanks for the chance to be here. Ill leave the question of what we should do until later. Let me focus on diagnosis and make a confession of ignorance and observation and express a worry. Confession of ignorance is this. I think it should apply to everybody who speaks confidently in this area. On the one hand we have enormous antidotal evidence and visual evidence of the kind that erik marshals, that points to technology having huge and pervasive effects. Whether it is complementing workers and making them much more productive in a happy way, thats one possibility, whether it is substituting for them and leaving them unemployed is a possibility and can be debated. In either of those scenarios you would expect it to be producing a renaissance of higher productivity. So, we on the one hand are convinced of the pervasiveness and far greater pervasiveness of technology in the last few years, on the other hand, the productivity statistics on the last dozen years are dismal. Any fully satisfactory synthetic view has to has to reconcile those two observations and i have not heard it satisfactorily reconciled and something we have to figure out. It is a big problem to believe if you believe technology happens with a big lag and its only going to happen in the future, thats fine. Then, you cant believe its already caused a large amount of inequality and disruption of employment today. So that is a major puzzle, which i think hangs over this subject which i just want to put out there for discussion. Second observation i think it is a mistake to think of the economy as homogeneous producing something called output as we approach these issues. Theres an aspect that doesnt get enough attention, which is sectors through progress working themselves into irrelevance. Let me give an example. The illumination sector, providing light. It actually has had about a tenfold increase in productivity every decade for a century. And we now think of it as a trivial sector in the economy. No doubt we could continue to produce tenfold increases in productivity but actually most of us want it to be dark at night. [ laughter ] so, in fact, there are more Little League night games than there used to be, parking lots lit more brightly than they used to be. Basically, whats happened is illumination has become quasifree and whereas candle making was a major industry in the 1900s, illumination is a trivial industry today. We need to recognize that a sector that has rapid Technological Progress but the world can absorb only so much of just gave you a big hint. If nobodys wondering where most people are going to be w