Credit: John Greenfield/Flickr

By Martin Khor
PENANG, Mar 15 2017 (IPS)

Last year Uber started testing driver-less cars, with humans inside to make corrections in case something goes wrong. If the tests go well, Uber will presumably replace their present army of drivers with fleets of the new cars.

Some personally owned cars can already do automatic parking.   Is it a matter of time before Uber, taxi and personal vehicles will all be smart enough to bring us from A to B without our having to do anything ourselves?

But in this application of “artificial intelligence”, in which machines can have human cognitive functions built into them, what will happen to jobs?   It is estimated that in the US alone, 4 to 5 million drivers of trucks and taxis could be rendered unemployed.

The driver-less vehicle is just one example of the technological revolution that is going to drastically transform the world of work and living.

The risk of automation to jobs in developing countries is estimated to range from 55 to 85 per cent, according to a study in 2016 by Oxford University’s Martin School and Citi. Major emerging economies will be at high risk, including China (77%) and India (69%), higher than the OECD developed countries’ average risk of 57%.
There is concern that the march of automation tied with digital technology will cause dislocation in many factories and offices, and eventually lead to mass unemployment.

Just a day before he left office, former US President Barrack Obama warned in a farewell interview that “jobs are going away because of automation and that’s going to accelerate,” pointing to “driverless Uber” and “displacement that’s going to take place in office buildings across the country.”

Also voicing concern about the social impact of automation, Microsoft founder Bill Gates recently proposed that governments should impose a tax on robots.  Companies using robots should have to pay taxes on the incomes attributed to the use of robotics.

That proposal has caused an uproar, with mainstream economists like Lawrence Summers, a former US treasury secretary, condemning it for putting brakes on technological advancement.  One critic suggested that the first company to pay taxes for causing automation should be Microsoft.

However, the tax on robots idea is one response to growing fears that the automation revolution will increase inequality as many lose their jobs while a few reap the benefits of increased productivity and profitability.

The new technologies will cause uncontrollable disruption and add to the social discontent and political upheaval in the West which had fuelled the anti-establishment votes for Brexit and Donald Trump.

Recent studies are showing that deepening use of automation will cause widespread disruption in many sectors and even whole economies.  Worse, it is the developing countries that are estimated to lose the most, and this will exacerbate the already great global inequalities.

The risk of automation to jobs in developing countries is estimated to range from 55 to 85 per cent, according to a study in 2016 by Oxford University’s Martin School and Citi.  Major emerging economies will be at high risk, including China (77%) and India (69%), higher than the OECD developed countries’ average risk of 57%.

The Oxford-Citi report, “The future is not what it used to be”, provides many reasons why the automation revolution will be particularly disruptive in the developing countries.

First, there is “premature deindustrialisation” taking place as manufacturing is becoming less labour-intensive and many developing countries have reached the peak of their manufacturing jobs.  Manufacturing processes are more automated today, also in low and middle income developing countries.

Martin Khor

Second, while 20^th century technologies allowed companies to shift production abroad to take advantage of cheap labour, recent developments in robotics and additive manufacturing now enable firms to locate production closer to domestic markets in automated factories.

Seventy per cent of clients surveyed believe automation and 3D printing developments will encourage companies to move their manufacturing close to home.  China, ASEAN and Latin America have the most to lose from this relocation, while North America, Europe and Japan are the main winners.

Thirdly, “the impact of automation may be more disruptive for developing countries, due to lower levels of consumer demand and limited social safety nets” as compared to the developed countries, according to a summary of the Oxford Martin School report.

The report warns that developing countries may even have to rethink their overall development models as the old ones that were successful in generating growth in the past will not work anymore.

“In the light of these technological developments, industrialization is likely to yield substantially less manufacturing employment in the next generation of emerging economies than in the countries preceding them.  Hence it will be increasingly difficult for African and South American manufacturing firms to create jobs in the same numbers that Asian countries have done.  In other words, today’s low-income countries will not have the same possibility of achieving rapid growth by shifting workers from farms to higher-paying factory jobs.”

Instead of export-led manufacturing growth, developing countries will need to search for new growth models, said the report.  “Service-led growth constitutes one option, but many low-skill services are now becoming equally automatable.”

It cites a World Bank report showing developing countries are highly susceptible to their workforce being affected by increasing automation, even relative to advanced economies where labour costs are high.

Moreover, countries with lower levels of GDP per capita typically have a higher share of their workforce “at risk”.   “Thus there are reasons to be concerned about the future of income convergence, as low income countries are relatively vulnerable to automation,” concludes the report.

Another series of reports, by McKinsey Global Institute, found that 49% of present work activities can be automated with currently demonstrated technology, and this translates into US$15.8 trillion in wages and 1.1 billion jobs globally.

About 60% of all occupations could see 30% or more of their activities automated and 5% of jobs can be entirely automated.  But more reassuringly an author of the report James Manyika says the changes will take decades.   How automation affects jobs will not be decided simply by what is technically feasible.   Other factors include economics, labour markets, regulations and social attitudes.

Which jobs are most susceptible to be affected?  While most people think they would be in manufacturing, in fact many jobs in services will also be disrupted.   The McKinsey study lists accommodations and food services as the most vulnerable sector in the US, followed by manufacturing and retail business.

In accommodations and food, 73% of activities workers perform can be automated, including preparing, cooking or serving food; cleaning food-preparation areas, preparing beverages and collecting dirty dishes.

In manufacturing, 59% of all activities can be automated, especially physical activities or operating machinery in a predictable environment.  Activities range from packaging products to loading materials on production equipment to welding to maintaining equipment.

For retailing, 53% of activities are automatable.  They include stock management, packing objects, maintaining sales records, gathering customer and product information, and accounting.

A technology specialist writer and consultant, Shelly Palmer, has also listed elite white-collar jobs that are at risk from “robots” which she defines as technologies, such as machine learning algorithms running on purpose-built computer platforms, that have been trained to perform tasks that currently require humans to perform.

Those she assessed would be displaced include middle managers, salespersons, report writers, journalists and announcers, accountants, bookkeepers and doctors.

While some analysts are enthusiastic about the positive effects of the automation revolution, others are alarmed by its adverse effects.

Certainly, the technological trend will improve productivity per worker that remains, and increase the profitability of companies that survive.

While there are benefits at the micro level for those companies and individuals that thrive in the new environment, there are adverse effects at macro level, especially retrenchment for those whose jobs are no longer needed.

What can be done to slow down automation or at least to cope with its adverse effects?

The Bill Gates proposal to tax robots is one of the most radical.   The tax could slow down the technological changes and the funds generated by the tax could be used to mitigate the social effects.

Another radical idea which is generating a lot of debate is to provide “universal income” to everyone irrespective of whether they are working.  The high productivity will allow everybody to be paid a comfortable income, and thus there is no need to worry that automation will displace jobs.

Governments can also take the attitude of “join them if you can’t beat them.”  For example, China is seeing major opportunities in joining the technological revolution and has drawn up plans to invest in robotics and artificial intelligence.

Other more conventional proposals include upgrading the education of students and present employees to take on the new jobs required in managing or working with the automated production process, and training workers to be made redundant with the new skills needed to work in the new environment.

Overall, however, there is likely to be a net loss of employment, at least in the short term, and thus the potential for social discontent.

As for the developing countries in general, there will have to be much thinking of the implications of the new technologies for their immediate and long-term economic prospects, and a major rethinking of economic and development strategies is also called for.

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200 million people worldwide rely on fishing and related industries for their livelihoods. Credit: Christopher Pala/IPS.

By Lyndal Rowlands
UNITED NATIONS, Jan 10 2017 (IPS)

UN member states hope to reach agreement on a diverse range of global issues in 2017, from managing the world’s oceans to banning killer robots to stopping tuberculosis, one of the world’s deadliest diseases.

In recent years the UN has tackled big issues including ebola, the global migration crisis, financing for development and climate change, with varying degrees of success.

Many pressing environmental, humanitarian and development issues continue to fill the UN’s agenda – even as incoming President of the United States has argued that things will be different at the UN after his inauguration on 20 January.

Trump has suggested that the UN “is just a club for people to get together, talk and have a good time.” However UN discussions have led the 71 year old organisation with 193 member states to create more than 560 international treaties.

Oceans and Life Below Water

One of the biggest meetings on the UN’s agenda this year is focused on the oceans or more specifically Sustainable Development Goal 14: Conserve and sustainably use the oceans, seas and marine resources.

“The United Nations has the opportunity to drive profound change for the oceans in 2017,” Elizabeth Wilson, director, international ocean policy at the Pew Charitable Trusts told IPS.

“This event will provide UN member states an opportunity to assess progress on ocean conservation, make new commitments, and create meaningful partnerships,” she said.

The meeting – which will take place in New York from 5 to 9 June – is considered to be of global importance for many reasons. For example, according to a 2016 World Economic Forum report, there will be more plastic than fish in the world’s oceans by the year 2050. Declining fish stocks will effect the more than two billion people worldwide who rely on fish as a source of protein. The UN’s Food and Agricultural Organisation also estimates that 200 million people worldwide rely on fishing or related activities for their livelihoods, the vast majority of whom live in developing countries.

Another important related issue on the UN’s agenda in 2017 will be working towards creating a treaty to protect the high seas, the areas of the global oceans, which fall beyond any country’s sea borders, said Wilson.

Tuberculosis

The UN General Assembly has only ever convened special high-level meetings on two global health threats, HIV/AIDS and antimicrobial resistance. However in 2018, the General Assembly will meet to discuss Tuberculosis.

Although the decision to convene the special meeting has been welcomed, it will not come soon enough for the nearly two million people who will likely die of tuberculosis in 2017.

“The tuberculosis burden is much higher than we expected and the measures to be taken must be much more focused and serious than before,” Lucica Ditiu, Executive Director of the Stop TB Partnership told IPS.

A series of global meetings will be held in 2017, in preparation for the 2018 meeting however, said Ditiu who also noted that these global meetings should not be seen as a silver bullet.

Although tuberculosis is treatable, the emergence of multi-drug resistant tuberculosis in recent years is a major cause for concern. Multi-drug resistant tuberculosis is just one example of antimicrobial resistance – a serious health problem which world leaders addressed at the UN General Assembly in 2016.

Banning Nuclear Weapons and Killer Robots

Possibly the most ambitious item on the UN’s agenda in 2017 will be an attempt to create an international treaty for the abolition of nuclear weapons.

The first session of the UN conference to negotiate a legally-binding instrument to prohibit nuclear weapons, leading towards their total elimination will take place in New York from 27 to 31 March.

The treaty will be a more ambitious iteration of the already existing Treaty on the Non-Proliferation of Nuclear Weapons.

However proponents of total abolition of nuclear weapons will face an even more challenging political context in 2017, with US President-elect Donald Trump appearing to have unpredictable views on nuclear weapons potentially at odds with the existing non-proliferation treaty which bans new countries from acquiring nuclear weapons.

Another, more contemporary issue on the UN’s agenda in 2017 will be killer robots. UN member states have agreed to begin talks to ban killer robots this year. According to the Campaign to Stop Killer Robots the talks will “(bring) the world another step closer towards a prohibition on the weapons.” A similar agreement back in 1995, led to government agreeing to pre-emptively ban lasers that would permanently blind, according to the campaign.

By Roberto Savio
ROME, Jan 27 2016 (IPS)

The rich and the powerful, who meet every year at the World Economic Forum (WEF), were in a gloomy mood this time. Not only because the day they met close to eight trillion dollars has been wiped off global equity markets by a “correction”. But because no leader could be in a buoyant mood.

Roberto Savio

German Chancellor Angela Merkel is losing ground because of the way she handled the refugee crisis. French President Francois Hollande is facing decline in the polls that are favoring Marine Le Pen. Spanish president Mariano Rajoy practically lost the elections. Italian President Matteo Renzi is facing a very serious crisis in the Italian banking system, which could shatter the third economy of Europe. And the leaders from China, Brazil, India, Nigeria and other economies from the emerging countries (as they are called in economic jargon), are all going through a serious economic slowdown, which is affecting also the economies of the North. The absence of the presidents of Brazil and China was a telling sign.

However the last Davos (20-23 January) will remain in the history of the WEF, as the best example of the growing disconnection between the elites and the citizens. The theme of the Forum was “how to master the fourth revolution,” a thesis that Klaus Schwab the founder and CEO of Davos exposed in a book published few weeks before. The theory is that we are now facing a fusion of all technologies, that will completely change the system of production and work.

The First Industrial Revolution was to replace, at beginning of the 19th century, human power with machines. Then at the end of that century came the Second Industrial Revolution, which was to combine science with industry, with a total change of the system of production. Then came the era of computers, at the middle of last century, making the Third Industrial Revolution, the digital one. And now, according Schwab, we are entering the fourth revolution, where workers will be substituted by robots and mechanization.

The Swiss Bank UBS released in the conference a study in which it reports that the Fourth Revolution will “benefit those holding more.” In other words, the rich will become richer…it is important for the uninitiated to know that the money that goes to the superrich, is not printed for them. In other words, it is money that is sucked from the pockets of people.

Davos created two notable reactions: the first came with the creation of the World Social Forum (WSF), in 1991, where 40,000 social activists convened to denounce as illegitimate the gathering of the rich and powerful in Davos. They said it gave the elite a platform for decision making, without anything being mandated by citizens, and directed mainly to interests of the rich.

The WSF declared that “another world is possible,” in opposition to the Washington Consensus, formulated by the International Monetary Fund (IMF), the World Bank, and the Treasury of the United States. The consensus declared that since capitalism triumphed over Communism, the path to follow was to dismantle the state as much as possible, privatize, slash social costs which are by definition unproductive, and eliminate any barrier to the free markets. The problem was that, to avoid political contagion, the WSF established rules which reduced the Forums to internal debating and sharing among the participants, without the ability to act on the political institutions. In 2001, Davos did consider Porto Alegre a dangerous alternative; soon it went out of its radar.

At the last Davos, the WSF was not any point of reference. But it was the other actor, the international aid organization Oxfam, which has been presenting at every WEF a report on Global Wealth.

Those reports have been documenting how fast the concentration of wealth at an obscene level is creating a world of inequality not known since the First Industrial Revolution. In 2010, 388 individuals owned the same wealth as 3.6 billion people, half of humankind. In 2014, just 80 people owned as much as 3.8 billion people. And in 2015, the number came down to 62 individuals. And the concentration of wealth is accelerating. In its report of 2015, Oxfam predicted that the wealth of the top 1 per cent would overtake the rest of the population by 2016: in fact, that was reached within ten months. Twenty years ago, the superrich 1 per cent had the equivalent of 62 per cent of the world population.

It would have been logical to expect that those who run the world, looking at the unprecedented phenomena of a fast growing inequality, would have connected Oxfam report with that of UBS, and consider the new and immense challenge that the present economic and political system is facing. Also because the Fourth Revolution foresees the phasing out of workers from whatever function can be taken by machines. According to Schwab, the use of robots in production will go from the present 12 per cent to 55 per cent in 2050. This will cause obviously a dramatic unemployment, in a society where the social safety net is already in a steep decline.

Instead, the WEF largely ignored the issue of inequality, echoing the present level of lack of interest in the political institutions. We are well ahead in the American presidential campaign, and if it were not for one candidate, Bernie Sanders, the issue would have been ignored or sidestepped by the other 14 candidates. There is no reference to inequality in the European political debate either, apart from ritual declarations: refugees are now a much more pressing issue. It is a sign of the times that the financial institutions, like IMF and the World Bank, are way ahead of political institutions, releasing a number of studies on how inequality is a drag on economic development, and how its social impact has a very negative impact on the central issue of democracy and participation. The United Nations has done of inequality a central issue. Alicia Barcena, the Executive secretary of CEPAL, the Regional Center for Latin America, has also published in time for Davos a very worrying report on the stagnation in which the region is entering, and indicating the issue of inequality as an urgent problem.

But beside inequality, also the very central issue of climate change was largely ignored. All this despite the participants in the Paris Conference on Climate, recognized that the engagements taken by all countries will bring down the temperature of no more than 3.7 degrees, when a safe target would be 1.5 degrees. In spite of this very dangerous failure, the leaders in Paris gave lot of hopeful declarations, stating that the solution will come from the technological development, driven by the markets. It would have been logical to think, that in a large gathering of technological titans, with political leaders, the issue of climate change would have been a clear priority.

So, let us agree on the lesson from Davos. The rich and powerful had all the necessary data for focusing on existential issues for the planet and its inhabitants. Yet they failed to do so. This is a powerful example of the disconnection between the concern of citizens and their elite. The political and financial system is more and more self reverent: but is also fast losing legitimacy in the eyes of many people. Alternative candidates like Donald Trump or Matteo Salvini in Italy, or governments like those of Hungary and Poland, would have never been possible without a massive discontent. What is increasingly at stage is democracy itself? Are we entering in a Weimar stage of the world?

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