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Partner and Chief Economist at Deloitte
Hi there! I have just joined Parlio and would love to have a chat with other members of the community.

I am Chief Economist at Deloitte LLP in London and advise boards of companies on macroeconomics. I am particularly interested in the effects of technological change on the economy, especially on employment and redistribution of wealth.

In a recent paper, along with colleagues and fellow economists Debapratim De and Alex Cole, I have studied how technology has affected employment in England and Wales since 1871. We show that in the last 145 years technology has created more jobs than it has destroyed.

But the role played by technology in boosting employment often goes overlooked because of its more conspicuous job-destroying effects. This has created a skewed policy debate, one which underplays the complementary nature of the relationship between technology and labour. We are all familiar with the destructive side of this story, one in which technology replaces people, raising productivity and lowering prices. Our research tries to define the creative side by identifying three mechanisms through which technology creates jobs.

Look forward to an interesting discussion!
This Q&A took place between 8/25/15 and 9/2/15. Unanswered questions have been hidden
8 questions
Your report is a welcome and nicely documented addition to an on-going debate. But Justin Lai's question is the right one: What will be the long-term effect on the redistribution of jobs and income? Who are the winners and who the losers in the long-run? My question, more precisely, refers to what kinds of people and with what levels of education will be the beneficiaries.

P.S. You might find of interest the CASBS Project on the Future of Work and Workers in Pacific Standard. psmag.com/work
Partner and Chief Economist at Deloitte
Thanks for the question Margaret. A growing wage premium for high levels of skills, education and experience does seem to have contributed to rising income inequality. Governments can lean against this. In the West they did so from the late nineteenth century, expanding welfare spending and taxation. It's perhaps no coincidence that the debate about the effect of technology on incomes has coincided with a renewed interest on the part of policy makers and politicians in the US and UK in raising levels of the Minimum Wage.

Tasks which require low levels of judgement, limited or no human interaction, are repetitive and predictable are most at risk from technology.

Conversely the sorts of skills or qualities which technology will be pushed to replicate are versatility, the ability to read people and build relationships and creativity.

One thought we’ve been kicking around is whether formal, academic qualifications could become a less reliable signal of competence in this kind of labour market. At college maybe extra-curricular activities, such as entrepreneurship, voluntary work, politics, sport and travel will become more important predictors of labour market success.
Thanks for answering our questions, Ian. The article states: "where one avenue closes in the jobs market, others open". While some expanding industries are high-income (like healthcare), it seems like other expanding industries are not as lucrative (service work—hairdressing, bartending, etc).

What role is technological progress playing in socioeconomic inequality? Are we eliminating more high/middle income industries and replacing them with more low wage jobs? Or is the opposite trend happening? Do you think there is a correlation at all?
Partner and Chief Economist at Deloitte
Skill-biased technological change is certainly raising income inequality.
There is a lot of evidence that the digital revolution has resulted in fewer
middle-income jobs and greater employment in high and low-income
occupations. This paper is worth a look: (eprints.lse.ac.uk/20002/1...in.pdf)

It evidence of job polarisation or ‘hollowing out’ in the UK. It also cites
several studies describing the same phenomenon in the US.
Corporate Innovation Activist | Social Scientist in training
Much of today's 'dumb' technology requires human interaction, management or oversight.

How do you see your report changing, if at all, when dumb tech is replaced with smart tech [AI/machine learning] which no longer demands this human involvement?
Partner and Chief Economist at Deloitte
Thanks Jenny, great question. AI clearly has huge potential. And at the apocalyptic end of the spectrum one could imagine smart machines reaching so far up the cognitive spectrum that they permanently destroy vast swathes of work. But I am an optimist on this.

Each generation regards the technologies and innovations they face as transformational and unprecedented. The evidence we’ve looked at suggests that deploying machines and freeing up labour raises incomes and creates demand for new, often unforeseen, services and products. The quantity of work in the economy is not fixed and human desires are limitless and unpredictable (20 years ago I would never have guessed I’d end up consuming as many coffees, boxes of sushi or trips to the gym as I do today!).

Looking around the economies of rich countries like the US and UK it’s not hard to see lots of unmet needs or desires – for health care, infrastructure, education, entertainment and so on. It’s why the last 65 years of amazing technological change in the US – and the destruction of swathes of manufacturing and clerical work - has been accompanied by a near tripling of the number of non-farm jobs.
JD/MPA Candidate at Columbia Law and Harvard Kennedy School
Thanks for taking our questions, Ian.

How do you believe technologies stemming from the "sharing economy" are influencing the distribution of wealth in this country?

I ask after learning that while Uber is widely credited for creating thousands of jobs by enabling people to become their own bosses, the company charges drivers 30% commission. This leaves some drivers to make less than minimum wage. Source is below.
msn.com/en-us/news/us/a-p...BjuRkA
Partner and Chief Economist at Deloitte
Thank you Isaac, really interesting point on Uber, I hadn’t seen the article.

I have heard a couple of Uber drivers in London saying that they earn more and have more flexible work as a result of not having to work through mini-cab companies. But this is anecdote not research. I guess Uber is disintermediating the cab companies which act as a link between customer and driver. Clearly bad for minicab company margins and revenues, it’s a harder call on the allocation of gains and losses between cab owner/drivers and customers.

Another aspect is that we are probably doing a pretty poor job of measuring the value of new technologies to consumers because so much of it shows up in an increased consumer surplus. (On a personal level I am struck by how, for instance, Google Maps and Trip Adviser have changed my experience of travel – even though I don’t pay a penny for them).
Economist, philosopher, author, lecturer, futurist
As we made it from the agricultural economy to the industrial economy, there were many physical needs that had to be met, i.e. poverty, malnutrition if not hunger, diseases, high child mortality etc. In other words: it was easy to find needs and create useful projects that could be turned into jobs.

Now we suffer from over consumption and calories are so cheap we die from eating too many.

We even have to keep consuming in order to stay employed and keep the economy growing because jobs are being laid off to robots and software.

Which needs for human labor do you see coming out of the digital economy?
Partner and Chief Economist at Deloitte
Many thanks for your question and interest in our paper Lene.

We studied the change in employment in England and Wales between 1871 and 2011, covering both the industrial and 'digital' revolutions. While some of the examples we use, especially in showing how technology has supplanted labour as a source of energy, emphasise the effects of industrialisation, we do study more recent changes in employment too.

Table 1 in the paper: www2.deloitte.com/uk/en/p...people
shows the fastest growing and fastest shrinking UK occupations between 1992 and 2014. The table shows a strong rise in employment in the caring occupations with more nurses, teachers and care and community workers.

Among the fastest shrinking jobs, we not only see occupations demanding manual labour but also those requiring the routine application of cognitive skills such as typing and secretarial work. Industrialisation meant that machines took over from humans in doing manual tasks. In the digital age machines are mastering the provision of routine cognitive skills too.
Writer / Podcaster Co-Host of Part Of The Problem
welcome ! excellent article. what can we do to lessen the irrational fear people may have about this? do you foresee any practices, methods or school curriculums that could be put into place to help people gain a better understanding, and help ease the transition ? also on a darker note, do you have any fear of autonomous robot killing machines like Elon musk and Stephen hawking do? and if so, what can be done about preventing that?
Partner and Chief Economist at Deloitte
Thanks Mike, that’s a tough one. I reckon part of the problem is that the destructive side of tech on jobs is a lot more tangible and direct. Just think of the number of times you’ve seen articles about factories closing or clerical workers being laid off because of new technology. But every time a law firm hires more lawyers, or a restaurant chain expands, you don’t get news articles saying, “Technology has raised productivity and welfare, so helping boost demand for lawyers and restaurant workers”. It’s all too complex and indirect.

The other angle is the human tendency to sensationalise technology either in apocalyptic or sci-fi terms. Actually, a lot of technological advances are more prosaic and incremental. It’s less about hover cars, killer robots and everyday space travel, and more about computer controlled fuel injection in your car, fingerprint recognition on your IPhone or self-service checkout tills. Above all, the big story with tech is it makes stuff cheaper, freeing up spending power to spend on new products and services.

To me the history of the last 150 years is one of the best counters to the deeply pessimistic view of tech.
Global CEO | Media Executive | Venture Advisor & Investor
Ian: Greetings and thanks for the timely research. Has anyone done work on the impact on jobs of the development of the telegraph in the 19th Century? There are many parallels between the telegraph and the Internet era (see Tom Standage's excellent "The Victorian Internet") in terms of how the telegraph began to enable global real-time communications. Thanks, Gordon.
Partner and Chief Economist at Deloitte
Thanks Gordon. Very much agree on the Standage book - its a cracking read and offers some fascinating parallels with the internet age. One is how the telegraph, from the late nineteenth century, started to be supplanted by the fixed line phone which, in turn, from the 1990s onwards, was eclipsed by mobile telephony and the internet. We’ve seen this in our jobs numbers for England and Wales.

The numbers of telegraph operators and telephonists employed in the UK between rose by a factor of forty in the 100 years period between 1871 to 1971. Since then, employment in these occupations has shrunk rapidly as automated switchboards, the internet and mobile telephony have taken off.

The interesting question is whether some new technology will come along and do to the internet what the internet did to the fixed line phone and the phone did to the telegraph – or, on this front, have we reached the end of history.
Thanks for this interesting discussion!

Do you know where we/I can read the full study? How does the effect on employment vary by the type of technology? How strong is the effect of technology on employment in comparison to other factors such as good institutional rules and education?
Partner and Chief Economist at Deloitte
Thanks Moritz.

Here is a link to the full paper – www2.deloitte.com/content...e.pdf.

We certainly acknowledge that there are many – sometimes competing – factors that impact employment, we didn’t have the scope here to look at anything but technology I’m afraid. Lots more interesting research to be done!