Q&A with Ryan Avent, Senior Editor, The Economist
The digital revolution, like the industrial revolution before it, will unleash massive social upheaval, warns Ryan Avent in his new book, The Wealth of Humans. In it, he describes how automation and globalisation have already produced a glut of labour. This has depressed wages, raised inequality and fuelled fear of immigration, says Avent, pointing out that worse is to come unless we find ways of redistributing the fruits of this revolution.
Q: How does the digital revolution increase inequality?
RA: It turns industries into winner-takes-all (or most) competitions, enabling top players employing relatively few workers to capture an outsized share of the returns. Firms are finding it ever-easier to replace those asking for pay rises — by outsourcing or automating their jobs, for instance.
Q: Won’t automation allow us all to enjoy more leisure?
RA: It certainly should. But if people work less, they either need to earn more money per hour or wealth has to be redistributed to top up their incomes. Rising inequality means the first is not happening, and for now there is little interest in the idea of generous wage subsidies to enable people to work fewer hours.
Q: Will companies still need to exist in the digital era?
RA: Yes, although their boundaries are already shifting as many jobs once done in-house move outside. But businesses provide an environment where particular cultures thrive. When work is knowledge-based, these cultures are critical, creating a shared understanding of the firm’s mission. The more complicated technology and the economy become, the more important those cultures are, and the more important the companies themselves become, as a result.
Q: What will it take to achieve what you call “mass digital prosperity”?
RA: It will involve redistributing resources from the people, firms and countries that are able to capture a large share of the gains from growth to those that are not. This will require social consensus that redistribution is both necessary and just. It will also need political movements with the power to implement the necessary reforms. Those things will not happen quickly or easily. So the main thing it will take to achieve mass digital prosperity is time.
This interview was first published in the Winter 2016 issue of CIPD’s Work. magazine.