Everyone wants more of the digital pie, but what will it take to provide a bigger slice for all?
- Summary:
- Let's take the skills shortage as read; so what are we going to do about it? Some answers - and some more questions.
There’s a skills shortage that is fuelling the long term digital divide. That’s one of the ideas that has met with universal acknowledgement at the World Economic Forum Annual Meeting in Davos this week. That said, what can be done to address this problem and what will be the consequences of not succeeding?
Those questions were tackled in a panel of CEOs and experts looking at how to encourage digital inclusivity against a backdrop of globalization. The scale of the problem was starkly articulated by Gayle Smith, CEO of ONE, an organization of over 9 million people taking action to end extreme poverty & preventable disease:
Rising income inequality is dangerous. Sharp and acute digital inequality will prove very dangerous. You can have any point of entry. It may be a moral point of view that it is simply wrong that millions and millions have no access and no hope of access. It may an economic argument that the sustainability of small businesses, medium-sized businesses and indeed some big companies may not be viable if we have that acute level of digital inequality. And it may be a security argument, where the tensions that we are seeing around the world that are revolving around the [economic] pie are going to grow more acute when it’s about the digital pie.
‘Share of pie’ was a theme picked up by Erik Brynjolfsson, Director, MIT Initiative on the Digital Economy:
We shouldn’t lose the message that we need more technology and we need to grow the pie bigger. There are some challenges that are getting in the way and I think will slow down tech progress if we don’t address them. A lot of them have to do with inequality. While technology makes the pie bigger, there’s no economic law that says that everyone is going to get a share of that or even that everyone is going to benefit.
The challenge I’ve been worrying about a lot is that median income has stagnated. About half of the population of the US and other developed countries has not been participating in the bounty that digitization has created. That’s visible not only in the economic statistics…We need to work harder not only to make the pie bigger, but to make sure that in principle everybody could be getting better off…It’s not the technology that’s doing this; it’s the way we’re using technology. Technology is a tool that can be used in lots of different ways. I don’t think we have been using it as effectively as we could be to make sure there’s more shared prosperity.
Not a tech problem
For his part, Keith Block, co-CEO at Salesforce, was also keen to make the case that the current situation shouldn’t be seen as a tech issue:
What I think about is not so much technology; it’s society - government, public sector, private sector, working together hand-in-glove, to effectively absorb those technologies. Not just to provide access to technology, which is of course important because that will drive opportunity and equality and how do we eliminate the [digital] divide. How do we absorb this technology so that we make sure that people are reskilled in the workforce, are able to embrace that technology, that we don’t have massive job loss without massive job creation. So that transition, that’s the sort of thing that keeps me up at night. It’s not any one technology, because there will always be new technologies. I think we’ve learned that.
What’s needed, according to Block, is a new model of partnership between business and government to get to grips with the skills issue:
I don’t think this falls just on the private sector and I don’t think it falls just on the government. There has to be this hand-in-glove, this partnership between both parts of society to make this work. As CEOs and leaders, we are keenly focused on reskilling the workforce. Certainly in the United States and other parts of the world, we’re trying to focus on STEM education.
We also have to think about people who are already in the workforce. In the US in the last few weeks we’ve had a large automotive manufacturer who’s announced they’re laying off thousands of people. You have to ask yourself and wonder what part did the government play in terms of providing an environment, a process, providing programs and economic incentives to reskill those workforces who have been displaced, as opposed to just going, ‘Those jobs are being eliminated’…As we take our customers through digital transformation, we offer them retraining programs as well. It’s not just the digital transformation, it’s also about those people who may be displaced.
Michael Dell, CEO of DELL Technologies, wasn’t convinced by the pessimism about jobs being displaced by technology:
If robots-per-capita were your measurement, it seems to me that the countries that are most robotised actually have the lowest unemployment rates. I’m not convinced that technology is necessarily a big part of the problem.
But he conceded:
We do need to develop skills. Companies play a big role here… It’s going to require lots of new skills, lots of new capabilities. From our perspective, we see a shortage of talent and a shortage of skills. The only answer to that is, not to take them from other companies. That math for that just doesn’t work. You have to train them, grow them within the company and you have to retrain and reskill the existing workforce.
To which argument Block added the point that:
The problem isn’t the availability of jobs, it’s matching the skill sets to those jobs. We have to make sure those skills are there because the jobs are there. We have to get into a motion where both public sector and private sector are getting used to [the fact that] this new technology is coming and coming and coming, so we have to be reskilling and reskilling and reskilling. This is not one-and-done.
Ongoing issue
The ongoing nature of up-skilling is something that requires a mindset shift, said Michael Froman, President Strategic Growth, Mastercard
The historic model we’ve had of people being trained for 20 years and working for one company for 40 years, then retiring for 20 years is somewhat outdated. We need platforms that allow for life-long learning. It’s great if you work for a company that provides that training. But for those who are holding down 2 or 3 part-time jobs, gig economy jobs, none of which are providing benefits…having some platform that allows for portable benefits, whether coming from the government or employers or philanthropists, and allows for life-long learning is critical.
Froman raised the question of how skilled government and policy makers are however:
The gap I’m most focused on is the emerging gap between the data capabilities of the private sector, which are immense and growing exponentially, and the lack of those capabilities in the public, civic and non-profit sectors.
That’s an argument that might be extended to academia, suggested C Vijayakumar, CEO, HCL Technologies:
Technology is changing at such a pace that it’s hard to get the skills that we need for cybersecurity, analytics and data and so on…I think the emphasis is on continuous learning. As businesses we are doing a lot of things to enable and train our employees to upskill and learn new things. The biggest opportunity is the people who are getting into the workforce are really not well-trained on some of the new skills that are required. Academics need to focus much more on making graduates employable and well-trained.
That all comes back to Block’s argument for a partnership between private and public sector to collaborate on policy. He argued:
Typically experience dictates policy and that can be very reactive. I think this is one [situation] where we have to get ahead of it. That means working very, very closely with government, making them aware, making them understand. We all as citizens have a hard time keeping up with technology. Now think about how we have to do that to educate policy-makers. If we’re not working closely together, corporations with government decision-makers, we will find ourselves in a position where innovation could be stifled. That’s not going to be good for anybody.
We have to get ahead of this. It starts with education, it starts with awareness. It’s [about] responsible leaders in our government, responsible leaders in the private sector, talking about policy together, as opposed to being reactive and lashing out and trying to ‘band aid’ solutions…We have to be proactive. The private sector can’t just wait and the public sector can’t just sit back and pass judgement.
My take
This isn’t an issue that’s going to solved overnight - and it’s certain to be on the agenda at the 2020 Davos gathering. And in reality there’s a case to be made that things are only likely to become more complicated. MIT’s Brynjolfsson provided a good summation:
This is the essence of the mismatch - you simultaneously have people who are finding their jobs automated, at the same time as technology is creating other new jobs. Over the past 20 years a lot of that has happened in the routine, information-processing jobs. A lot of those are middle-skilled, middle-waged kinds of jobs that start disappearing. The types of tasks that machine learning affects is, for better or worse, a broad spectrum of jobs.
But he did provide a more upbeat thesis as well:
We are very far from Artificial General Intelligence of the kind you see in Hollywood, where machines can do everything. That’s many decades away. The folks who are talking about a massively jobless future, that is not the relevant question for now, if it ever will be.