Automation Is the Most Important Form of Transformation
Over the last few years, LEF has sought to make sense of the term digital transformation. How will the technologies of the 2020s – cloud computing, smart products, machine learning, algorithmic operations, blockchains, sensors, robotics, autonomous systems, 5G, IoT and more – change the way that large organizations innovate, operate and compete? Our three-bubble digital transformation model has been very well received, and we will continue to build on this thinking in the coming year.
Over the same period, my own work has also focused on defending digital, my belief that today’s ever-more dire forecasts about the negative impacts of these very same technologies – job destruction, loss of privacy, algorithmic bias, monopoly power, societal polarization, etc. – are often unfair and/or exaggerated. Since digital services continue to do so much more good than harm, our industry should stop serving as a political and media punchbag before the negative narratives fully take hold.
Digital transformation and defending digital might seem to be two very different topics, as the former is mostly a large enterprise mission, while today’s techlash is aimed primarily at consumer protection. However, the differences are much less than they initially appear, which becomes clear once we realize that digital automation and digital transformation are often one and the same. Whether we are talking about transforming or automating business processes, customer support, product design, manufacturing, transportation, supply chains, public services or countless other tasks, the terms are frequently interchangeable. Yet their connotations couldn’t be more different: transformation evokes caterpillars turning into butterflies; automation taps into the deepest of techlash fears.
In a new report, The Automation Imperative – Why Modern Societies Will Need All the Productivity They Can Get (written jointly with the Information Technology and Innovation Foundation), ITIF/LEF argue that because it is pretty much the only way to significantly boost societal productivity, digital automation is needed if modern nations are to address seemingly intractable challenges such as sluggish wage growth, aging populations, rising healthcare costs, growing environmental threats, ever-stronger global competition and often-worrisome levels of public sector debt. We believe these growing societal pressures make digital automation the most important form of digital transformation today.
But because automation is so strongly associated with job losses and even diminished human worth – in a way that transformation isn’t – there is a growing risk that society will turn against automation at the very moment it is most needed, and this is why defending automation is such an important part of our defending digital project. Maintaining the fiction that transformation is benign but automation is a serious cause for concern is disingenuous and ultimately self-defeating. We can’t have it both ways.
Of course, major new forms of automation will often require difficult worker transitions, as they always have. But predictions of massive job losses have been proved wrong ever since the dawn of the Industrial Revolution. Today’s labour and skills shortages – and aging populations – suggest the doomsayers are well along the path to being wrong once again, as many modern societies struggle to – among other things – staff their healthcare systems, pick their crops, labour in their restaurants and hotels, and meet their ever-expanding IT needs. This is why technology-enabled automation can and should be defended on its own terms, even if politically it’s often easier to just call it transformation. It’s also why we called our report The Automation Imperative and not The Transformation Imperative.
Importantly, increased automation will not just be about ever-more efficiency. Large increases in public- and private-sector automation are also needed to free up human capacity, talent and ingenuity so that modern societies can more fully focus on the challenges and opportunities of the future. The report concludes with our vision of what an advanced, highly automated digital economy might look like. The key message is that just as the nature of work changed dramatically throughout the agricultural, manufacturing and service economy eras, so is it shifting again as the Information Age unfolds.
For example, while today we often talk about peak oil, we may soon be talking about peak office, as more work takes place either in the cloud or directly at the physical point-of-service (e.g. installing renewable energy systems, growing food indoors (vertically or horizontally), caring for the elderly, repairing the environment, shoring up sea walls, establishing new transportation and logistics services, upgrading and maintaining infrastructures, and countless other skilled and less-skilled tasks). Overall, there is a great deal of work to be done, which is why labour shortages seem more likely than worker surpluses. And this doesn’t even count the entirely new jobs that new technologies will surely create.
In expanding our research into these economic and societal domains, we are very excited to be working with ITIF, the world’s leading technology policy think tank. It’s clear to us that many of the most important opportunities of the 2020s – including smart cities and grids, drones and other autonomous vehicles, new digital identification and payment systems, and personalized healthcare and education – will all have a strong public policy dimension, and will often require new societal platforms. But the starting point is a public policy culture that supports and not retards these efforts.
In researching these opportunities, there is no better partner than ITIF. During 2020, we will explore public and private sector advances in leading-edge nations around the world, as digital transformation and digital automation increasingly define the economic dynamics of the coming decade.