Digital disruption, driverless cars, process automation, robotics in the workplace. All symptoms of technological advancement and achievement and all to be hailed. But…
Let’s have a look at the century 1950 – 2050.
Let’s call 1950 the Birth of the Computer Age. We’re now in 66 AD (that’s After Digital for the Latin speakers amongst us).
Since 1950 we have seen Moore’s Law unfold, a couple of Global Financial Crises, Oil Crises, Increased Leisure Time, Increasing Social Unrest, tomes on the End of Work and other studies, reports, research into similar phenomena. During the same period we have seen population increase, climate change and a concentration of wealth not seen before, at least not on a global scale.
Since 1980, global GDP has increased 7 times which is nothing short of amazing. There can be no doubt that we live in fascinating times and for most employees and their families their quality of life has increased and that increase in the quality of life can largely be attributed to computers, writ large. That’s the context.
Into this context we need to bring the notion of firm-level productivity.
No firm sets out to unproductive and the simplest way to remove costs is to automate the processes that cost. In today’s business models that usually means removing people.
As computing power increases and firms are able to outsource or automate their low-level transactional processes, purchasing power is removed from the economy.
I’ll say that again, purchasing power is removed from the economy.
Yes, the firm is more productive and at firm-level this is highly desirable. The firm becomes more productive, can produce more with the same resources, can reduce the cost of doing business, can turn a higher profit.
But in so doing, we remove purchasing power from the economy. Robots and computers don’t need holidays, cars, fuel, schools, entertainment, food, drink, household cleaning products and everything else that fills our supermarkets. In a consumer-based economy this has a funny smell to it. Why would you do that? Why would you remove the basis of your economy through the pursuit of higher productivity?
So my question is this: at what point does the pursuit of firm-level productivity become socially detrimental? At what point will we see increased productivity correlate with declining quality of life.
My sense is that we’re at that tipping point right now. How do you see it?