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THE world, so the smart folks say, is presently going through a third industrial revolution.
The first, which took the world by storm in the late 18th and early 19th century, transformed an economy driven mainly by muscle power, be it from man or beast, by introducing steam. The second, which broke late in the 19th century, brought all the delights of electrical power. The third, in which we are now, has to do with the digitalisation of society.
All three revolutions increased mankind’s capacity for economic production hugely. One worker with computer-driven technology can now produce the same as umpteen manual workers of old.
This has several obvious advantages and drawbacks. Recently, the Dutch Vice-Premier, Lodewijk Asscher, gave a paper at a robotisation conference in Amsterdam which elicited much attention in his highly digitalised country. This was followed by a special report on digitalisation in the authoritative British news magazine The Economist.
It is a matter of history that the first two industrial revolutions were accompanied by much social disruption and human misery. Many traditional job types were swept away by an unstoppable tsunami. Especially older workers simply could not cope with the new, which demanded skills that they did not possess.
In fact, in the early 19th century, groups of disgruntled workers smashed all sorts of steam-driven machines. These people, named Luddites (after one Ned Ludd, who first smashed a machine in 1779), were mostly highly skilled hand-workers, who saw their relatively lucrative jobs taken by far less skilled and much lower-paid people – and machines.
'Creative destruction' runs its course
In the long run, of course, the first two revolutions created all sorts of new middle-class jobs. This is the process of “creative destruction”, a term first used by the economist Joseph Schumpeter (1883-1950).
The question is whether the third revolution will follow the same pattern.
In his paper, Asscher was not so sure: “Robots are fast becoming more accessible, more dependable and cheaper. They are cheap, fast, never ill, they work 24 hours a day, never demand pay increases, they are not represented by trade unions and do not strike. They are therefore capable of replacing many of the existing workers and jobs,” he told his audience.
Figures cited by The Economist tend to confirm Asscher’s fears. It appears that digitalisation has increased the number of highly skilled jobs, as well as those requiring low or no skills at all. The middle group – where most people still find themselves – is losing out.
An example: when I started my career as a journalist – as a student in the late 1960s, I worked at a newspaper during holidays – large armies of typesetters were working furiously, accompanied by hosts of lead copy packers and others who worked all sorts of machines. There were many more of those than the journalists who wrote the copy.
Walk into the offices of a newspaper today, and you will see only journalists. (It is highly improbable that a computer will ever be able to compose an analysis like the one you are reading!) But with a very few exceptions (who had to learn new skills), all the others have quietly faded into the night.
Taxi drivers to become redundant?
Another example: taxi and truck drivers. As The Economist pointed out, even five years ago it was thought that computers would never possess the cognitive skills to safely drive a motor car or truck on a busy street. And yet, the first prototypes of vehicles able to do exactly that are already on the road. Even passenger aircraft can nowadays take off and land safely without the pilot intervening at all.
This has several implications. It means that the gap between rich and poor, already widening, will get ever wider, with all the concomitant consequences for social cohesion and stability. It means that labour will get weaker and capital stronger.
Asscher’s solution was that preparation for the digital future has to start at school: “If robots are taking over routine work, we have to train our youth for the other work. Don’t train them for routine, but for the unexpected. Not for facts, but for creative analysis and the seeking of new routes.”
In a highly developed country like the Netherlands, this sounds practical. But what of a developing country like South Africa?
The big question is whether Schumpeter’s creative destruction cycle, which characterised the first two industrial revolutions, will be repeated. Some economists are quite sanguine about it; others are sceptical. One supposes the proof of the pudding lies in the eating.
Nevertheless, what can be safely predicted is that the destructive part of the cycle will once again be accompanied by severe social convulsions. And for South Africa, with its dual economy, this has ominous implications.
The solution, in theory at least, is to invest heavily in education and training for the digital age. But is our government able to do this? Am I the only sceptical one?
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
The first, which took the world by storm in the late 18th and early 19th century, transformed an economy driven mainly by muscle power, be it from man or beast, by introducing steam. The second, which broke late in the 19th century, brought all the delights of electrical power. The third, in which we are now, has to do with the digitalisation of society.
All three revolutions increased mankind’s capacity for economic production hugely. One worker with computer-driven technology can now produce the same as umpteen manual workers of old.
This has several obvious advantages and drawbacks. Recently, the Dutch Vice-Premier, Lodewijk Asscher, gave a paper at a robotisation conference in Amsterdam which elicited much attention in his highly digitalised country. This was followed by a special report on digitalisation in the authoritative British news magazine The Economist.
It is a matter of history that the first two industrial revolutions were accompanied by much social disruption and human misery. Many traditional job types were swept away by an unstoppable tsunami. Especially older workers simply could not cope with the new, which demanded skills that they did not possess.
In fact, in the early 19th century, groups of disgruntled workers smashed all sorts of steam-driven machines. These people, named Luddites (after one Ned Ludd, who first smashed a machine in 1779), were mostly highly skilled hand-workers, who saw their relatively lucrative jobs taken by far less skilled and much lower-paid people – and machines.
'Creative destruction' runs its course
In the long run, of course, the first two revolutions created all sorts of new middle-class jobs. This is the process of “creative destruction”, a term first used by the economist Joseph Schumpeter (1883-1950).
The question is whether the third revolution will follow the same pattern.
In his paper, Asscher was not so sure: “Robots are fast becoming more accessible, more dependable and cheaper. They are cheap, fast, never ill, they work 24 hours a day, never demand pay increases, they are not represented by trade unions and do not strike. They are therefore capable of replacing many of the existing workers and jobs,” he told his audience.
Figures cited by The Economist tend to confirm Asscher’s fears. It appears that digitalisation has increased the number of highly skilled jobs, as well as those requiring low or no skills at all. The middle group – where most people still find themselves – is losing out.
An example: when I started my career as a journalist – as a student in the late 1960s, I worked at a newspaper during holidays – large armies of typesetters were working furiously, accompanied by hosts of lead copy packers and others who worked all sorts of machines. There were many more of those than the journalists who wrote the copy.
Walk into the offices of a newspaper today, and you will see only journalists. (It is highly improbable that a computer will ever be able to compose an analysis like the one you are reading!) But with a very few exceptions (who had to learn new skills), all the others have quietly faded into the night.
Taxi drivers to become redundant?
Another example: taxi and truck drivers. As The Economist pointed out, even five years ago it was thought that computers would never possess the cognitive skills to safely drive a motor car or truck on a busy street. And yet, the first prototypes of vehicles able to do exactly that are already on the road. Even passenger aircraft can nowadays take off and land safely without the pilot intervening at all.
This has several implications. It means that the gap between rich and poor, already widening, will get ever wider, with all the concomitant consequences for social cohesion and stability. It means that labour will get weaker and capital stronger.
Asscher’s solution was that preparation for the digital future has to start at school: “If robots are taking over routine work, we have to train our youth for the other work. Don’t train them for routine, but for the unexpected. Not for facts, but for creative analysis and the seeking of new routes.”
In a highly developed country like the Netherlands, this sounds practical. But what of a developing country like South Africa?
The big question is whether Schumpeter’s creative destruction cycle, which characterised the first two industrial revolutions, will be repeated. Some economists are quite sanguine about it; others are sceptical. One supposes the proof of the pudding lies in the eating.
Nevertheless, what can be safely predicted is that the destructive part of the cycle will once again be accompanied by severe social convulsions. And for South Africa, with its dual economy, this has ominous implications.
The solution, in theory at least, is to invest heavily in education and training for the digital age. But is our government able to do this? Am I the only sceptical one?
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
