It is not the trophy or the triumph. It is the respect that is jacks rivals or member of the most. That is what gives the 1986 masters his size. To win, he had to overcome that day norman, and according to some, father time. That day we were a part of something special. Something bigger. Just as we now are today. Is not whether you win or lose, it is how you play the game. And no one has played it better or longer than jack. Today be congressional Gold Medal Ceremony for professional golfer jack nicholas, on cspan. The Brookings Institution recently hosted a forum on the impact of technology on the workforce. Speakers included larry summer. This is just over one hour. Great. Melissa they queue 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 in particular in the information center. Sector. 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 i tried to lay out in our hamilton project framing paper there are a wide range of views on this topic, in particular if this will be good or bad or how good or bad on 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 will just briefly introduce them. To my left is david otter, professor of economics at mit one of the nations leading economists who has probably contributed more to the nations 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 anish chopra served as our First NationsTechnology Officer appointed by president obama and served as the virginias leader of technology and now in a technology firm. And erik has already been introduced and still a professor at mit. [ laughter ] melissa 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. 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 . David 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 deserved. 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 were not 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 the labor market is changing or economy changing as rapidly as the story so dramatically the premium for Higher Education has plateaud over the last 10 years and we see evidence highly skilled workers are moving, have less skilled jobs. A lot of employment growth has been in 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 it is a reason for skepticism. But a reins for skepticism for things not changing that rapidly. The second point i want to make, when we think about how technology interacts with labor market 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 and reduction in one activity implements production of technology. One whether it indirectly 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 years of training. It complements slowly and tends to raise incomes. There are many examples productivity results in making jobs more interesting and challenging. That is not always the case. I dont want to take up more time. That is on one side, on the other, we see a lot of growth of work that require ss 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 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 disruptive 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 a lot of the 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 technology especially academic entrepreneurs believe everything will be accomplished immediately and you talk to the crowd thats skeptical. Their view is these problems are hard. But were a long way away. As andy said we live in very interesting times. Melissa i am going to turn to you, as a nation you are tasked with using Technology Information for job creation, reduce health care costs. You have spoken optimistically about the power of technology and innovation to improve our lives. I am curious to hear how your view of what technology has done compares to that as andy and eric laid out. In particular, how have you Seen Technology impact of variety of sectors. Anish i have three observations. The first starts with my trip to google. We were trying to open up Government DataSearch 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 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 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 utilizings 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 insure productivity gains hit them. Second, again when i was virginias Technology Secretary the north carolinavirginia border used to be the hot spot for furniture manufacturing. Thats it. We went through a policy of debate, 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 carolina, virginia border. Something interesting happened around this concept of automation. Manufacturing is cheaper becausemanufacturing is cheaper because you no longer have to have the same labor intensity and can insource jobs back at faster rate in response to china. So ikea opens up a manufacturing plant for furniture. Where . Right in the heart of that north carolinavirginia border, the same place that was written off for its capacity to build furniture and was being told, in the neighborhood you have to do , Different Things because your life as a furniture person is over. All of a sudden, because of 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 as they were when they were previously here, but thats still net positive. I would say the third observation, if i had any, is this democrization 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 democrization of capital innovation. Im really fired up over the impact visit is going to have in the next decade, acknowledging in certain sectors. 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. And you sponsored the center for American Progress inclusive prosperity, the goal of the commission being 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 anecdotal evidence and visual evidence of the kind that erik marshals, that points to technology having huge and pervasive effects. Whether it is complementing complimenting workers and making them much more productive in a happy way, thats one pocketssibility, whether it is substituting for them and leaving them unemployed is a possibility and can be debated. But 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 for the last dozen years are dismal. Any fully satisfactory synthetic view has to reconcile those two observations, and i have not heard it satisfactorily reconciled, which leads me to think that we do not have this all figured 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. But 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 output as we a 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. 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 so much of it becomes ultimately unimportant in the economy. Is that kind of thing relevant in thinking about the world . Heres a fact that continues to astonish me. I concede there are a million measurement problems around it. But it is a fact, what im going to say. In the way they compute the Consumer Price indices, by definition, they were all set to be 100 for every good in 1983. Consider two goods today. A Television Set and a year at a university. And instead of using a year at a university, i could use a day in a hospital. [laughter] the Consumer Price index for the latter two categories is in the neighborhood of 600. The Consumer Price index for the former category is 6. So there has been a hundredfold change in the relative price of tv sets and the provision of basic education and health care services. If anybody is wondering why governments cannot afford to do the things they used to do, i just gave you a big hint. If anybody is wondering where most people are going to be working in the future, i just gave you a big hint. If anybodys completely confident we will have rapid productivity growth in the future, they should be giving pause, because no matter how much productivity we have in agricultural or illumination, it doesnt really matter for the aggregate economy. Increasingly, thats becoming true of a larger and larger fraction of what it is that we produce. Third, i was when i was an undergraduate at mit, in the 1960s, there was a whole round of concern about this. Will automation displace all the employment . And what i was taught as an undergraduate was that basically the people who thought it would were a bunch of idiot ledites, and obviously there would be enough demand and work itself out, and if people got more productive and theyd spend and maybe we needed some transition assistance, but it would all basically be okay. That is what i was taught and bob solo thought and he was a hero and the other people were all a bunch of goof balls, kind of what i learned. I believed that for many years and actually repeated it often. It has occurred to me that when i was being taught that, about 6 of the men in the United States, between the age of 25 and 54, were not working. And that today, 16 of the men in the United States, between the age of 25 and 54, are not working. And