Editor’s Note: In 2020, an MIT Task Force produced a comprehensive report on the Work of the Future. Since then, the global pandemic has had a significant effect on work and businesses, providing the impetus for The Work of the Future, by the same authors. The book, from which the following excerpt is adapted, will be published by MIT Press on January 25, 2022.
A decade ago, powerful mobile phones were still a novelty, driverless cars were never seen on public roadways, and computers did not listen to conversations or respond to spoken questions. The possibility of robots taking jobs seemed far off, save for an assembly line or two. But as the emerging capabilities of robotics and artificial intelligence began capturing headlines and the popular imagination, researchers and commentators began warning that jobs long thought to be immune to automation—those demanding expertise, judgment, creativity, and seasoned experience—might soon be better accomplished by machines. Citizens of industrialized countries took notice, reacting with mounting trepidation.
Our research did not confirm the dystopian vision of robots ushering workers off factory floors or AI rendering human expertise and judgment superfluous. But it did uncover something equally pernicious: amid a technological ecosystem delivering rising productivity and an economy generating plenty of jobs (at least until the covid-19 crisis), we found a labor market in which the fruits are so unequally distributed, so skewed toward the top, that the majority of workers have tasted only a tiny morsel of a vast harvest.
For most US workers, the trajectory of productivity growth diverged from the trajectory of wage growth four decades ago. This decoupling had baleful economic and social consequences: low-paid, insecure jobs held by non-college-educated workers; low participation rates in the labor force; weak upward mobility across generations; and festering racial disparities in earnings and employment that have not substantially improved in decades. While new technologies have contributed to these poor results, these outcomes were not an inevitable consequence of technological change, or of globalization, or of market forces. Similar pressures from digitalization and globalization affected most industrialized countries, yet their labor markets fared better.
We know that history and economics show no intrinsic conflict among technological change, full employment, and rising earnings. The dynamic interplay of task automation, innovation, and new work creation, while always disruptive, is a primary wellspring of rising productivity. Innovation improves the quantity, quality, and variety of work that a worker can accomplish in a given time. This rising productivity, in turn, enables improving living standards and the flourishing of human endeavors.
When innovation fails to drive opportunity, however, it generates a fear of the future: the suspicion that technological progress, even if it makes the country wealthier, will threaten numerous livelihoods. This fear exacts a high price: political and regional divisions, distrust of institutions, and mistrust of innovation itself. In US politics, a growing gulf between the “haves” and the “have-nots” has driven a deepening national schism over how society should respond to the needs of those at the bottom of the economic ladder.
The central challenge ahead—indeed, the work of the future—is to advance labor market opportunity to meet, complement, and shape technological innovation. This drive will require innovating in our labor market institutions by modernizing the laws, policies, norms, organizations, and enterprises that set the “rules of the game.”
The labor market impacts of technologies like AI and robotics are taking years to unfold. But we have no time to spare in preparing for them. If those technologies are deployed in the labor institutions of today, which were designed for the last century, we will see effects similar to those manifested in recent decades: downward pressure on wages and benefits, and an increasingly bifurcated labor market.
Building a future of work that harvests the dividends of rapidly advancing automation and ever more powerful computers can deliver opportunity and economic security for workers. To do that, we must foster institutional innovations that complement technological change.
The central challenge ahead—indeed, the work of the future—is to advance labor market opportunity to meet, complement, and shape technological innovation.
Long before the pandemic disruption, our research on the work of the future showed how many in our country are failing to thrive in a labor market that generates plenty of jobs but little economic security. The effects of the pandemic have made it even more viscerally and publicly clear: despite the official designation of many low-paid workers as “essential,” they endured the riskiest working conditions in the face of covid-19, since most of their jobs cannot be done remotely.
Some forecast that robots will soon take over those roles, though few have to date. Others see the indispensable role of human flexibility, since it is human, not machine, adaptability that has allowed us to reorganize work on the fly during the pandemic. Still others see covid-19 as an automation-forcing event—a catalytic force that will pull technologies from the future into the present as we learn to deploy machines in jobs that humans cannot safely perform. However it plays out, the effects of covid-19 on technology and work will last long beyond the pandemic, instigating changes that may look quite unlike what anyone envisioned in 2018.
Other forces have also roiled the 2018 visions of the future, including the rupture between the world’s two largest economies and a surge of political turmoil and economic populism that culminated in the violent attack on the US Capitol in the wake of the 2020 election of President Joe Biden. These pressures are reshaping alliances, breaking apart and reorganizing global business relationships, and spurring new forms of cyberwarfare, including disinformation, industrial-scale espionage, and electronic compromising of critical infrastructure. The US and China had friction before, but nothing like the fracture that is now occurring. What began as a trade war has morphed into a technology war. China’s whole-of-government approach to tackling major industrial and technological goals poses a competitive challenge for Western economies, which typically take a decentralized, often business-led approach. It remains to be seen whether China’s focus on government-driven domination of data accumulation yields technological advances beyond creating powerful tools for monitoring and controlling its own population.
The clash with China is rippling through the economy and threatens to hinder innovation, which increasingly emerges from countries around the world as researchers collaborate across borders and time zones. How can we make sure that technological advances, whenever they come, yield prosperity that is widely shared? How can the US and its workers continue to play a leading role in inventing and shaping the technologies and reaping the benefits?
No compelling historical or contemporary evidence suggests that technological advances are driving us toward a jobless future. On the contrary, we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them, and that robotics and automation will play an increasingly crucial role in closing these gaps.
Spectacular advances in computing and communications, robotics and AI, are reshaping industries as diverse as insurance, retail, health care, manufacturing, logistics, and transportation. But we observe substantial time lags, often on the scale of decades, from the birth of an invention to its broad commercialization, assimilation into business processes, widespread adoption, and impacts on the workforce. Novel industrial robots have been slow to move into small and medium-sized firms, for example, and autonomous vehicles have yet to be deployed on a large scale. Indeed, the most profound labor market effects of new technology that we found were due less to robotics and AI than to the continuing diffusion of decades-old (though much improved) technologies like the internet, mobile and cloud computing, and mobile phones.
This time scale of technological change provides the opportunity to craft policies, develop skills, and foment investments to constructively shape the trajectory of change toward the greatest social and economic benefit.
What will be required to reshape and refocus the institutions and policies of the US to create the shared prosperity that is possible if we are willing to make the necessary changes?
We begin by looking at how workers are trained to make their way in a fast-changing economy. Enabling workers to remain productive in a continuously evolving workplace requires empowering them to learn new skills at all stages of life—in primary and secondary schools, in vocational and college programs, and in ongoing adult training programs. The distinctive US system for worker training has shortcomings, but it also has unique virtues. For example, it offers numerous points of entry for workers who may want to reshape their career paths or need to find new work after a layoff. We argue that the US must invest in existing educational and training institutions and innovate to create new training models to make ongoing skills development accessible, engaging, and cost-effective.
But even well-trained and motivated workers need and deserve a sense of basic security. Rising labor productivity has not translated into broad increases in incomes because labor market institutions and policies have fallen into disrepair.
Peer nations from Sweden to Germany to Canada have faced the same economic, technological, and global forces as the US, and have enjoyed equally strong economic growth, but have delivered better results for their workers. What set the US apart are specific institutional changes and policy choices that failed to blunt, and in some cases magnified, the consequences of these pressures on the labor market.
The US has allowed traditional channels for the workers’ voice to atrophy without fostering new institutions or buttressing existing ones. It has permitted the federal minimum wage to recede to near irrelevance, lowering the floor under the labor market for low-paid workers. It has embraced a policy-driven expansion of free trade with the developing world, Mexico and China in particular, that has raised aggregate national income, and yet it has failed to address the resulting employment losses and the retraining needs of workers displaced by these policies.
No evidence suggests that this strategy of embracing growth while ignoring the plight of rank-and-file workers has paid off for the US. US leadership in growth and innovation is long-standing—the country led the world throughout the 20th century, and particularly in the several decades immediately after World War II—while the labor market maladies documented here are recent. These failures do not inevitably follow from innovation or constitute costs worth paying to gain the other economic benefits that they ostensibly deliver. We can do better.
Recognizing the centrality of good jobs to human welfare and the centrality of innovation to the creation of good jobs leads us to ask how we can leverage investments in innovation to drive job creation, speed growth, and meet rising competitive challenges.
Investments in innovation expand the economic pie, which is crucial to meeting challenges posed by a globalized economy marked by fierce technological competition. Throughout our studies, we found technologies that were direct results of US federal investment in research and development over the past century and longer: the internet, advanced semiconductors, AI, robotics, and autonomous vehicles, to name but a few. These new goods and services generate new industries and occupations that demand new skills and offer new earnings opportunities. The US has a stellar record of supporting innovations that inventors, entrepreneurs, and creative capital deploy to support and create new businesses.
Adopting new technology creates winners and losers and will continue to do so. Seeking input from all stakeholders—including workers, businesses, investors, educational and nonprofit organizations, and government—can minimize the harms and maximize the benefits to individuals and communities and help ensure that the labor market of the future offers advantages, opportunity, and a measure of economic security to all.