Disruption - Good for Business, Bad for Humans? (Part 1)
Are we really equipped to meet the challenges presented by new technology?
Photo by Cara Shelton on Unsplash
The advent of ChatGPT and other AI tools are causing huge consternation in the creative and professional industries, one aspect of which I covered in last week’s newsletter. Technological change has been a constant in human history, but are we getting to a point where the speed and scale of disruption is having a detrimental effect on human life?
At the moment, it feels like it to me because I can see the work I do changing, but is that argument justified at a wider level? Let’s have a look and come back to that question at the end. In Part 2 next week, we’ll look at some of the implications for business strategy as a result of the answer.
What is Disruption?
Disruption has two definitions.
1. disturbance or problems which interrupt an event, activity, or process.
"the scheme was planned to minimise disruption"
2. radical change to an existing industry or market due to technological innovation.
"no industry is immune to digital disruption"
The first is traditional and unambiguously bad. We do not like our train journey to work disrupted by leaves on the line. The second is a more modern definition, referring to innovation. Coined by Clayton Christensen, it describes a process by ‘which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.’
Whether the process is good or bad depends on whether you are the disruptor or the disrupted. As someone who has been on both sides, it’s a vastly different scenario to face. Losing your livelihood is not only a financial problem. As many ex Google and Twitter staff have pointed out in the last few weeks, there’s a loss of identity and purpose associated with work that puts a great deal of stress on individuals and their families.
With the pandemic and huge rapid technological change, we’re clearly living in a rapidly changing world. However, is this disruption any different to what has happened in the past?
Same As It Ever Was (Maybe?)
The most obvious response is that change is inevitable, constant, mainly for the better and it has always been resisted. The term ‘Luddite’, applied to those who don’t want to accept change, comes from a secret group of English textile workers in the 19th century which destroyed new industrial machinery to try to save their jobs. The change happened anyway. ‘Resistance is futile’ to quote the Borg.
In the Industrial revolution, the use of water and steam powered machinery led to the mass manufacture of handmade products. The railways replaced the canals and eventually the horse drawn carriage was replaced by the car. A good read on this idea of change and a focus on satisfying customer needs through innovation is Theordore Levitt’s 1965 ‘Marketing Myopia’ which is possibly the best, and certainly the shortest, classic marketing text.
However compared to the agricultural economy that preceded it, the Industrial Revolution enabled a much greater rate of population and economic growth.(Figure 1).
Figure 1: GDP in England since the Industrial Revolution
Although workers were displaced, there were plenty of other jobs available. These require some limited retraining, but generally this represented a shift of relatively unskilled labour. The computing age would appear to just signal a continuation of this trend but there are subtle changes, which are becoming more important and noticeable as we progress.
The Boiling Frog
The advent of computing, in its broadest sense, has seen the level of skill being displaced start to creep upwards at an increasing rate. In the car industry, assembly workers were replaced by robots for simpler manual tasks with humans being retained for more dexterous and complicated tasks (needless to say that these tasks reduce in number as the technology develops). An engineering design office, which once had 20 people in it will now have one or two people with a CADCAM system.
However, while innovation has been a constant within industries, more recent innovations in computing have greater agency across industries. It’s becoming easier in recent years to see the effect of technology at scale. The arrival of ChatGPT in recent weeks is one such example. There are hundreds of millions of us who are looking at AI and wondering how that will displace workers in many spheres of work, ourselves included!
Good For Businesses, Bad For Humans?
If we didn’t really think about it much when it was happening to other people, why should anyone care about it now it’s us? After all, studies have found that computers have not to date created significant net technological unemployment. Technology improves the productivity of workers and is the foundation of whole new industries and companies. However, there are two main reasons to be concerned.
Firstly, the level of skill now being replaced routinely is not just weeks but years. If you’re a radiographer, twenty years of experience may see you to the end of your career but it’s a more precarious position if you only have just one or two years under your belt!
Can a human keep up with the pace of learning and development of an AI system? If not, what does one retrain in? How do you sustain the ability to finance those studies during prolonged periods of unemployment? Do these new roles have a sufficient level of human skill to hold out against the technology for a length of time to make that study viable?
However, what we do know is that if workers are unemployed, economically inactive, unable to plan the future etc, then they are likely to spend less money and that shrinks the market for goods and services. As more affluent people who buy a wider range of things are affected, we can see that this could be a growing problem.
Secondly, we are starting to become constrained by the artefacts and legacy of the industrial era. Our education system is still very much geared to the needs of an industrial society, still turning out young people for roles that either no longer exist or for which demand in the future will be minimal. Our health systems are ill health systems focussed on the treatment of disease vs the maintenance of health required to work longer into life. Our ways of working, despite Covid, are still predicated towards commuting to a place of work for a ‘shift’.
More significantly, that industrial legacy, and the population growth required to sustain it, has created existential challenges, namely climate change and an increasing strain on natural resources. Furthermore, our current system of capitalism is geared to maximising shareholder value at the expense of ‘fluffy stuff’ i.e. longer term considerations e.g. people and community.
Therefore combinations of these factors (and I’m sure you can think of a few more) are starting to limit our ability to fuel indefinite economic growth in the way we have come to think about it. This, in turn, affects our ability to innovate and the lack of expansion limits our ability to absorb the displacement of workers. So while companies are maximising shareholder value individually, they’re degrading their customer base collectively.
Utopia or Dystopia
There’s a huge range of possible outcomes between technological utopia and dystopia but there’s increasingly a feeling amongst economists and strategists that things are not working as they should and a laissez faire attitude to these developments is the wrong approach. I share that view.
In short, we’re sitting at an inflection point as technologies such as the Internet of Things, AI, cloud computing, virtual reality etc assert themselves and become more significant in their relevance to the shape of our society in the next 20 years than the internet technology of the last 20 years. The rise in GDP may well continue, or even accelerate through innovation, but does that mean that we will see increased prosperity at a population level?
The expectation at present is that the generation entering the workforce now will not enjoy the same standards of living as their parents. We have seen in history that societal unhappiness can lead to unexpected and undesirable consequences. So, coming back to the question I posed at the beginning, there’s some justification for worrying about the speed and scale of technology. If the change is not making people better off, then it’s something we need to consider carefully.
Are we going to? Going on history probably not; at least not unless the problem is too big to ignore. However, we, as a society, are pretty good at ignoring stuff. A global pandemic was top of the UK National Risk Register for 20 years. We managed to be grossly underprepared for that and we seem destined to repeat the experience at some point! Don’t expect the cavalry anytime soon.
So, if we aren’t really set up as a society to meet the challenges presented by new technologies, how do we navigate through it as businesses and individuals? We’ll cover that next week.
Until then
Pete
Here are some links to things referred to in the article that I came across and might be of interest.
‘Marketing Myopia’ - Theodore Levitt. Seminal text. Every home should have a copy.
‘UK ‘no better prepared for the next pandemic’ with ‘dangerous gaps’ in its health security’, Telegraph, October 2022’ - We learn nothing from history
‘Artificial Intelligence Model Accurately Detects Pneumothorax on Chest Radiographs’, Pulmonology Advisor, January 31, 2023 - No wonder both my radiographer friends are taking early retirement!
THIS CONTENT IS CHATGPT FREE! NO BOTS WERE USED IN THE MAKING OF THIS SUBSTACK.