Naively perhaps. But something like Brexit is important,
but it pales into comparison into the potential impacts of automation on how we work in different future not having enough work.
Climate change, London finance and. Fresh water, energy transition, large scale social disorder, antibiotic resistant diseases,
education and deployment of private capital for social good quantum computing.
Hello and welcome to the Feature Business podcast from say Business School.
I'm Emily Baron and each week I host a conversation on a topic that will define the future of business and wider society.
Speaking to experts from Oxford University. Leading businesspeople and entrepreneurs.
This week we're talking about the future of work. Studies have shown that up to 47% of work is at risk of automation.
What does this mean for us as individuals, as a society, and how businesses are run in the next 10 to 15 years?
To help us look behind the numbers today was speaking to Google chief economist Howe Varian and Jonathan Trevor, a professor here at Oxford.
First is our conversation with Professor Trevor. We discussed the paths of work, how we use employment to distribute wealth across society.
And he might be the winners and losers in the automation age.
Today we are talking about the future of work and it's fantastic to have you with us.
So thank you very much for joining us.
It would be fantastic if we could start off by painting a picture as it would be for someone who is really a lay person in this subject.
What does the next 30 to 50 years look like in terms of our working lives?
Gosh, well, I think it's a great question. It's the it's the million dollar billion dollar trillion dollar question.
But it's not a question that I don't think anyone can really answer with a huge amount of confidence, because in many respects,
there's so many unknowns and uncertainties around how work will be structured in future, how we will work,
how we create economic value, how we create social value and actually maintain social justice.
And I think in some respects, that's a sign of the times.
You know, we would have been having a similar conversation at the beginning of the Industrial Revolution,
certainly here in Europe, right about 17th century.
But but in some sense, it was a simpler environment.
And the types of technologies we were talking about or indeed others were talking about and introducing things like the double action steam engine,
which is a transformative piece of technology at that time,
that that was relatively slow to be introduced and relatively simple, not to say easy at all.
But today, one of the big differences in not really so much our industrial revolution,
but rather our information revolution, is that the speed and pace of change has magnified exponentially.
If you wanted listeners to ask a few questions, maybe one or two questions that they should be asking themselves and asking of the people around them,
what do you think those key questions that we're missing are?
What really is the purpose of work? Right. Work, as we understand it, in terms of jobs and careers, is a relatively recent phenomenon.
We have only really experienced it in the modern era, which is to say the industrial era.
It is something which is is, you know, no more than really 300 years old.
Prior to that, there was servitude, serfdom. There was subsistence farming, subsistence living.
We just sought to survive. Now we have expectations that more than merely survive, we should thrive.
And work plays a huge, both practical.
But can I say perhaps also moral role in not just surviving, but thriving as individuals,
particularly as individuals today as we see society, I think,
becoming progressively more individualistic and some would say more atomised,
particularly as a result of things like social media and information technology.
So for me, the question is really what is the purpose of work?
And I think that's the ultimate question. But how you answer it needs to be a little bit more nuanced than that.
And in particular, what I would like to encourage people to do is to think at multiple levels about this question around the purpose of work.
Certainly it's easiest to answer the question.
Well, actually not easy, but perhaps simplest to answer the question is individuals, what's the purpose of work in my life?
So many individuals work gives us direction, it gives us focus, it gives us steam,
it gives us connection to others beyond our immediate circle, our families, our friends.
It gives us a sense of whether we're doing well or not.
There is literally a structure by which we can measure ourselves.
We often call that performance management, and sometimes it's absolute against some sense of objective or sometimes relative.
I'm doing better than you, or more likely not.
But fundamentally, it takes up a lot of our time, and it's something that plays a huge role in our lives,
not just in terms of generating income to survive, but actually creating a sense of self-worth, a purpose, personal purpose that's really important.
So that's one level, but then we can take it to a higher level.
What is the purpose of work from a societal level?
I think in terms of creating economic value and how that is then distributed and shared in a way that's considered equitable,
which isn't to say egalitarianism gets same but equitable, but I think also organisationally.
What is the purpose of work for companies or for employers?
Again, is it purely around creating economic value, in which case employees are merely a cog in a machine and means finance?
Or are we embracing the sense of purpose driven organisations which see a contribution more than just simply a healthy bottom line?
Can you give us a kind of walk through of what the organisation of the future might be?
And I do want to come to kind of who might be the losers in this situation and what does it look like when I go to work in ten or 15 years time?
Do I even go to a place? So I don't like the question.
I think we can do a different question. No, no, I think it's a great question.
But I don't like the question because it kind of makes an assumption. And I think this is one of the problems that we have when we try and think
about the future we we have in the past and indeed we are continuing to do so,
which is dysfunctional. We're not learning from our mistakes. We think about the future as being one future.
We think about the future organisation being one type of organisation.
And the reality is it will be different. It will be different on a case by case basis.
So what is the organisation of the future look like? Well, I've got a clear and simple answer, but you're not going to like it.
It depends. It's such an Oxford, it's such an honest answer.
It also happens to be true, I believe. So there will be some changes that we know that will apply.
I think generally speaking, there will be less security. That's the negative.
But on the flip side of that, there'll be more flexibility. I think we will increasingly have fewer dedicated occupations.
What we will have is more and more as a trend portfolio careers, what we will have less and less of,
simply because I believe it will be replaced by machine intelligence in some form or another,
is routine work, whether that's manual or even white collar cognitive work.
But what we will have more capacity for is inventive, creative work and work that requires discretion, discretion,
the exercising of judgement, all of which are things that humans are really great at respective of backgrounds.
Everybody can be good at these things. So we know those things.
I believe them to be true. But what that means for what specific companies or organisations or government agencies look like in future,
I think it's impossible to say because actually is just very dangerous,
I think to stop generalising across entire economies or even across entire industries.
So so for me, the urgent question is not to try and predict the future, to kind of say, well, what should we think about the future?
It's more how how should we think about the future, how to think about some of the challenges that we're facing,
how to ask the right questions, and to build in resilience into our own ability as leaders.
I mean that in the broadest sense, not the heroic individual at the top of the hierarchy,
but our capacity as human beings to to think differently about the future and to be resilient and to act together to make it more positive.
Because, as you say, there are winners and losers and change always and always will be.
But that's the urgent requirement for me, not not to be in some sense a mystic,
but rather to actually just be better at how we think about the future and the choices we have to make.
Do you think from your perspective in the kind of conversations you have about this,
do you think there is enough sense of urgency in our government agencies,
in lobbying organisations to start to ask these questions and start to have these conversations?
Absolutely not. Did I know the answer to that question?
Absolutely not. I mean, I think for very understandable reason, we we focus on the here and now.
We focus on fighting problems and fires that are ever present and particularly over now.
But the reality is, for me, naively, perhaps, but something like Brexit is important,
but it pales into comparison to the potential impacts of automation on how we work and different future.
And that's not something which is 50 years from now. That's something that's 15 years from now.
And so thinking about those who might lose out, I mean, two studies I've seen,
one is sort of this figure that gets bandied around a lot, that 47% of tasks will be automated.
And then the other,
that there's a disproportionate impact potentially on women because they disproportionately take up roles which are easy to automate.
And when we think about both of those things, first of all, do they that still hold up, do you think?
And secondly, sort of how bad can it get and what is the threat and what how do we then think about redistributing wealth in a sort of equitable
way to use or leverage when those what mechanisms no longer kind of work in some sense to start to even think about these issues.
It's important to understand how we've come to where we are and where are we.
As I saying before, this idea of careers and occupations and jobs,
working for an employer, engaging in a transaction that is the employment relationship,
which is literally a contractual relationship legally this perhaps also a psychological relationship as well.
That's a relatively modern phenomenon. And from a societal perspective,
how we operate as democratic Catholic societies relies upon in large extent precisely
that job structure creating industries in which works performed late by labour.
We've come to rely upon that mechanism as a means of distributing income.
So the primary means how we share.
So in the UK, in the US, Western Europe, pretty much across the world is, is how we distribute income is precisely through our employment structures.
So for me know it becomes more than just media interesting and topical when we are
talking about threats to precisely that form of structuring the distribution of income.
It's not just about jobs, it's about societal cohesion, it's about fairness, it's about stability.
It's about how we come together.
It's about the even not just simply the the question of responsibility from the state to its people, but actually how we even think about statehood.
What are we if we are not a system as a nation for fairly sharing economic value?
And the mechanism of how we do that again is employment. So it becomes a really important issue.
And I think generally speaking, you have two camps when you start to think about these really complex issues.
You have optimists and you have pessimists. And the optimists would argue, I think, that particularly with regards to disruption from technology.
If we look at past experience,
technology has created so many more opportunities for economic value creation than it has for people than it has actually replaced.
And in particular, they will talk about the 1922 rather critical piece issued by John Maynard Keynes,
the Cambridge economist who talks about the threat of technological unemployment.
Well, in some respects, Keynes was proved comprehensively wrong because, again, from a societal basis,
the introduction of then industrial technology, such as the move and production line, created far more opportunity for jobs than actually replaced.
But he has a point. He has a point.
And that's where pessimists come into it that they pessimists, I think, would argue, well, you know, in the absence of employment structures,
because we are replacing roles and tasks with particularly routine roles and tasks with technology, what do we do in the future is bleak.
And I think some way how you start to think constructively about both and evaluate both is again by focusing at multiple levels.
And I think if we think at a societal level, I'm an optimist, I am, because I think, again,
the introduction of new technologies needed to make existing industry more efficient or to make it simply more innovative,
particularly the introduction of things like ever more capable technologies will make companies and organisations
that rely upon economic value and just the essential products and services that we we use and consume every day as,
as people. It will simply make our organisations more capable.
And that's, that can only be a good thing. So in that respect, I'm all for this and I think we should rush to embrace these technologies,
understand them the meaning and the implications and how they're best managed, but actually supposed to think because it's progress.
If I think about organisations within that,
the winners organisation will be those that understand the environment and how it's changing and become adaptive and can embrace,
for example, these new technologies, but not just technology. There's a whole lot of other things are changing.
So for example,
the introduction of millennials into the workforce and differing expectations of people in their relationship with the work they perform.
So. It is the case that organisations, I think, will. Some will survive.
Others will thrive in the differences. But quite simply how much they are and how effective they are.
But where I can become potentially pessimistic is if we come down to the individual level,
so not the societal level or even the organisational level at the individual level.
What do we do if people can't or won't adapt to an environment in which the work that they have
perhaps devoted their entire lives towards is no longer abundant or available or even viable.
And I think that's why we need to start thinking about some of the implications of this.
And that's not a hard thing to imagine, because we see that already,
not not even in our industrial story, in our information revolution, but rather in industrial revolution.
If we think about, for example, steelworkers in Sheffield, there is a you know,
there is much post-industrial decline in many of our communities that we built up specifically to set our
manufacturing base in the industrial revolution that have not transitioned to a post-industrial world.
So we're going to have that plus many more communities or individuals who haven't in the future managed
the transition to a post information world or a world in which their work is no longer viable.
It's technically redundant. So that for me, you know, that's the big question.
How do we help those who can't or won't?
Make that transition, who can't share in the opportunities that these changes,
both technological and otherwise, are creating that I think are inevitable.
We can't roll back the tide on that, and we shouldn't.
But it does need to be very carefully thought about, because the implication is is is I think further inequality,
further division, further unrest, which is and nobody's interested.
I mean, one thing that kind of really pushes me towards to ask you, before I came to business school, I used to work for Charlie Watts in schools.
And when I think about the way our schools are organised and the way our system is
organised and even the way kind of all universities and degrees are organised,
it doesn't feel like we're ready. It doesn't feel like we're preparing people to work in this different way.
It requires a different set of skills around leadership, around the way we interact with others, where we build relationships with others.
And it makes me feel quite nervous about who is going to take responsibility for ensuring that everyone is ready,
because that doesn't it feels like there's a void of responsibility between the individual, the state and companies.
And that kind of contract doesn't seem to have been written yet on sort of.
Okay, I'm going to put up my hand and I will take responsibility for making sure people are ready.
Certainly, I feel quite pessimistic when I when I think about that.
I mean, it's certainly true how we organise governments, how we organise the state,
particularly in terms of public services and support, how we organise our universities, how we even organise our business schools.
And specifically I'm based is a direct mirror image of the type of, I'm going to say work society that we create.
It is no accident that the Oxford MBA, like every single MBA on the planet, is organised into verticals like functional subjects,
strategy marketing, operations, organisational behaviour, finance, because that's how our companies work and actually it's the same in government.
So we are organised industrially and we've been extremely successful at it and I really
think that's worth noting is we are victims of our own success and we should celebrate that.
But the question is, is that fit for purpose for how we will work in future?
And by work I simply mean find an enduring occupation that invigorates us as individuals,
but also the means by which we create value economically and otherwise,
societally, as societies across the world, either as one global society or indeed multiple component constituent nations.
And so what that looks like in future, I don't know. And do you?
But I think you're right that we need to start asking these questions and asking them urgently.
We need to think long term. We can't think about the next quarter or the next simply the next year,
because that simply isn't going to help us start to prepare or even be in a position to be open minded.
If and when change does, change does come. You know, in some sense,
I think there is a tension between finding as much as possible and and allowing
things to emerge and actually may be part of the challenge of the 21st century.
The information age and the types of changes we're seeing is that actually we've got to do both.
And that's really hard. We still I think and I think this especially to myself, that I see it in a lot of other people as well.
I certainly see it in terms of our companies that we research here at the business school.
We think in binary terms, we think in black and white.
And then really we do that because that's efficient and it's simple, but the reality is that it's incredibly complex and therefore grey in future.
And, and so then you get into very much a kind of political, ideological perspective, and nobody wants to hear me talk about that because who am I?
But I do think that there is it will be there a fight between those that think that
the answers will come from heroic individuals or indeed individuals themselves,
working it out for themselves and in aggregate all of us just hopefully getting along enough for long enough or finding some collective solution,
which isn't to say something which is towards the socialist end of the political spectrum,
but finding a collective way through, probably some of these collective systemic challenges that we're facing,
which aren't just simply economic or social, but they are every aspect of what it means to be a citizen in a in a health exercise.
After my conversation with Professor Trevor, we caught up with Google's chief economist Hal Varian at the annual Responsible Business Forum,
where he delivered a keynote address on the topic of AI and its impact on the future of work.
Unfortunately, I was unavailable, so two of our producers, Brady and Patrick, dragged him into our studio to have a conversation.
However, it is an optimist. He believes that machines will step in to fill the labour shortage left by a wave of retiring baby boomers.
He also, in the conversation, shed some light on how tech platforms such as Google and YouTube can help bridge the skills gap.
My name is Hal Varian. I am the chief economist at Google.
Welcome to the Oxford Futures podcast. Professor Varian, it's great to have you here.
You were just giving a talk on automation and demography and how the dynamic works there and sort of implied that
while there might be a lot of pessimism about automation and job loss out there in discussion at the moment,
that might actually be a boon. And to sort of replace some of the baby boomers are retiring and they might sort of offset each other.
Could you just run us through that? Right.
So everybody focuses on the demand side for labour and then new technology comes along that can displace labour.
There could be lots of social disruptions associated with that.
Now, what I looked at was what the supply of labour will look like over the next few decades.
There's really only one social science it can forecast ten or 20 years into the future, and that's demography.
And there the patterns are quite clear. If you look at the developing countries, you're seeing ageing society.
And every time a worker retires, they expect to continue consuming.
So the workers that are left behind, that are still working, have to have to be more efficient.
And for that to occur, they have to be more productive. And that effect is really says that we have to invest more in making work more productive.
You know, we've grown up in a period where maybe I've grown up in a period, I should say,
when there's been a pretty loose labour market because of all of the baby boomers coming onto the labour market and women entering the labour market,
it's typically been possible to find workers.
But we're moving into a period where labour is going to be substantially more scarce and there's going to be more competition for workers overall.
That should be a good thing. Pushes wages up and makes it easier to find a job.
What we might what we have to focus on are than these other questions how can we deliver
training more efficiently and how can we assist people in matching up the workers and the jobs?
So following on that point about training,
automation and computing will play a huge role in retraining people to meet demands of the future workforce.
What is Google doing specifically? So we're doing a number of educational and training courses around the U.S. and the world, for that matter.
One thing that I've been particularly interested in is looking at the resources are available on YouTube because there's just so
many diverse sets of education and training videos on YouTube that it's an absolutely remarkable treasure trove of such activities.
So if you want to know how to weld or you want to know how to fix your toilet,
or you want to know how to rewire your thermostat or any of these questions, there it is.
It's available on YouTube. And many, many, many of those educational and training videos are important for learning job related skills.
So you're going to be able to match the that training to sort of the supply and demand requirements of the future workforce.
So it's like some sort of sorting or allocation thing so they know what they need to study or is it?
Well, it's an excellent question, but let me remind you of Google's business.
Oh, we tried to do exactly that. And pretty much every domain, we're matching people with questions to people with answers.
People want to buy things for people want to sell things and people want to
acquire skills and people who can who can provide that training and education.
So I don't care if it's art, if it's music, if it's carpentry, if it's automotive,
we have content there that's going to help people learn to do the things they want to do.
In your talk, you talked about automation, reducing some of the barriers to previously complex tasks.
So yes, means that it's much easier to become a driver.
You don't need to know the streets of your car to be a taxi driver.
Still checking reduces the burden of some of the sort of computer related tasks, for example.
So how does that work? Do you see that developing any further? Is that going to help people get jobs a lot easier?
Yes, of course. What's nice is it's a lot easier writing papers.
And it used to be because you've got all of this assistance in terms of style guides and spelling guides and everything else.
It's a lot easier navigating around town because you have these fantastic geo positioning systems available for free.
When I was a kid, believe it or not, we spent a week or so in arithmetic class learning how to take square roots by hand.
So that's a pretty obsolete task these days. I think there'll be a limit to.
How low that sort of cognitive threshold will go, how how much technology can augment people in the work they do?
Well, the examples that are really fun now are to use Google Lens.
If you take your Google camera and go out and photograph a shrub or a tree or a flower,
it will come back with a result that tells you the name of the shrub,
the tree, the power, and what kind of treatment it needs water, some acid soil or local soil.
So all of those things that you used to have to look up in the gardening manual,
now just come to you immediately via the via the about via your phone.
You also have spoken about some of the sort of manual tasks that people assume
will be the first to be automated or actually made up some very complex,
numerous tasks that you might need one robot to do each individual thing.
Mm hmm. And taken together with sort of that Google lens example you just gave.
Do you think manual roles or sort of cognitive roles will be the most at risk to automation?
Well, I think that we've seen tremendous advance and machine learning, machine learning artificial intelligence areas in the last five years.
And we haven't really seen a comparable explosion on the robotics side.
So let's take something like harvesting crops while we harvest core and we harvest weed using mechanical equipment works just fine.
But if we're trying to harvest apples, peaches, plums, pears, strawberries, raspberries, grapes,
on and on and on, these soft fruits can be so easily damaged that really they still require human touch.
Now, someday we might like that problem, but for now, at least, it's it's still a problem.
Interesting. So understanding. This is where at a business school.
This is a business podcast. It'd be great to get your take on first.
What do you see as the biggest opportunity for the young professionals coming out of business school,
coming out of undergrads with these two looming technology and shortage of labour in developed countries?
And then ultimately, what's the biggest threat and where should we be looking?
Well, in the U.S., I would say health care is going to be employing more and more people,
maybe inefficiently, but they'll certainly be probably they'll be engaging more and more people.
And there's a lot of challenges there to making our system more efficient.
So I think that's probably a good area for people to go into.
But that technology, just kind of high tech that we see in Silicon Valley is doing tremendous things.
Think about the driverless vehicles, autonomous vehicles.
Well, that's $1,000,000,000,000 a year industry worldwide.
And there is intense competition going on among the auto companies and the tech
companies to be able to provide services that really work for ordinary users.
So that's going to be a very exciting business as well. Excellent.
Thanks. And then what do you think are the biggest challenges? Are threats that we face with with the way trends are going?
Yeah. Well,
a lot of there may be cases where some technological change happens so rapidly that people really find it difficult to adjust to the to the change.
So that could happen in trucking, for example, lots and lots of truck drivers.
Right now, there's 50,000 vacant truck driver jobs in the U.S. They can't retain people because it's a terrible job.
Salaries are being pushed up to $80,000 to be a long haul truck driver.
That's a pretty good salary.
But it also means that it's even more incentive to try to replace those human truck drivers working in not very good, but high paying positions.
There's a race to see if we could really improve that job by making it one more user
friendly that is making the task less tedious and to by making the tasks cheaper.
I think they're going to be slow enough that the labour markets can adapt.
But what you ask for the pessimistic view, it could be that something will come on so quickly that it would create a lot of disruption.
So the key is, is more timing than it is. Well, I think phasing things in and when you look at technology in general, it's it's phased in.
You look at, for example, mobile phones, first mobile phone for commercial uses was about $2,000 came out of 1980.
And it was the size and shape of a brick. So things have changed a lot.
The big phones. Yeah, that's exactly right. Yeah.
So it's changed a lot. Things have changed a lot since then.
But then again, it's been nearly 40 years, right?
Thank you for listening to the Oxford Feature Business Podcast presented by say Business School.
Next week I'm in conversation with Nick Howe, vice president of Virgin Hyperloop One,
where we discuss the future of hyper fast transport and what it means for the planet and our cities.
Please subscribe on iTunes and if you want to find out more about what we discuss in today's episode, you can follow the link in the description.
The Feature Business Podcast was created by Brady, Middleton, Patrick, Kyla,
Michael and Paula, Paris Abro and Emily Byrne, MBA students at City Business School.
All.