Innovation and automation fail to excite Joe Average

The hubbub surrounding the successful and technically aware parts of society as we head into a world of automation is failing to resonate with the wider public.
Written by Chris Duckett, Contributor

There are few places in the world that are currently without concern over the prospects of the global and national economy; whether it is markets addicted to quantitative easing, record low-interest rates, or governments cutting and trying to squeeze the last drop of money out of public services, the spectre of another market jolt sending economies into recession is very real.

Politicians are not prepared to take unpopular decisions, central banks have used all the levers they can, and out of the dearth of ideas arrives the concept of allowing technology, agility, innovation, and all other manner of buzzwords to be the piper that we must all follow.

Australia has had a box seat to seeing how the wider public engages with a clarion call to embrace the uncertainty and become more entrepreneurial, thanks to the installation of former merchant banker and ISP owner Malcolm Turnbull as Prime Minister in September last year, who took the job with a call for Australia to leave its rock-digging past behind and head towards a future transformed by technology.

"If we want to remain a prosperous, first-world economy with a generous social welfare safety net, we must be more competitive, we must be more productive. Above all, we must be more innovative," Turnbull said soon after getting the top job in the land.

"Now, a lot of this change is cultural. It is really important for leaders, for prime ministers, for ministers, for people in the media to talk about the importance of change, to talk about the importance of science, to talk about the importance of technology. We are living in the 21st century."

Over the subsequent nine months, Turnbull's government wrestled the opposition parties, and itself, to more or less a standstill. One of the few new initiatives to appear from Canberra was a AU$1.1 billion commitment to an Innovation and Science Agenda. In the short amount of time it had to make a difference, the Innovation Agenda changed little, other than tax breaks for startups and doling out the money to incubator programs.

When Turnbull took the country to an election on July 2, his government suffered a near-death experience, and the recriminations began.

A widely held view among the commentariat is that Turnbull's talk of innovation is scary to regular voters, particularly to those outside the big cities.

"If I'm sitting in my car from Cranbourne, three kids, mortgage, 70 grand a year, driving to work, what does 'innovation' mean to me?" broadcaster Neil Mitchell is reported as having said to succinctly sum up the situation.

"Turnbull was going out and telling people in western Sydney and Queensland they needed to be agile and disruptive. Well, they don't want to be agile, and they don't want to be disruptive. They are worried about being disrupted," the AFR reports one of its sources as saying.

It's not hard to see why people are concerned with being displaced by technology and the automation it will bring, former Treasury Secretary Ken Henry said last year; in the last recession Australia experienced in the early '90s, a large proportion of those aged over 45 who lost their jobs never worked again, ever.

Have a large cup of the startup kool-aid, and you may argue that those who are displaced should retrain and get back into the workforce -- but you cannot take a 55-year-old truck driver and turn them into a critical-thinking, problem-solving, app-making IT whizz with a couple of classes and well wishes, especially into an industry where ageism is entrenched.

The standard retort to reports that over 40 percent of jobs will disappear thanks to automation is to claim that products will be lower priced as a result, and new jobs will be created further up the value chain. But in absolute terms, the number of new jobs created is typically lower than the number lost.

Sit through a number of scripted speeches from politicians and business leaders on the impact technology is having on the economy -- such as this one from former Australian Treasurer Joe Hockey -- and you'll usually hear the following spiel: "Facebook is now the biggest media company in the world and doesn't employ a journalist. Uber is the biggest taxi company in the world and doesn't own one car. Airbnb is the largest hotel chain in the world and doesn't own one hotel room. And Alibaba is the most diverse retailer in the world and doesn't have one traditional shopfront."

We can already see the first impacts of the disruption that politicians are now so fond of on the taxi industry. Uber has woken up a lackadaisical and protected industry, and allowed users to book car rides for cheaper than ever, but it comes at a cost.

Take a ride in an Uber, and you are unlikely to meet a budding entrepreneur raking in the cash in the new economy. It is far more likely to be someone working a second job, between jobs, or just struggling to get by.

It's little wonder why drivers get angry when Uber unilaterally decides to take cut rates or take a larger slice of the pie -- in this case, the new boss is more powerful and centralised than the old boss, and should Uber's plans for self-driving cars come to fruition, the new boss wants its workers to be out of a job.

The recent political insurgencies across the developed world have often targeted international trade as a harbinger of doom, but as Turnbull said last month, it is automation that is often to blame.

"It's pretty clear that the pace of change is very unsettling for many people. There's no doubt that the rising tide of prosperity has not lifted all boats to the same extent, and some people feel and some industries feel they have been left behind," he said.

"It's important to remember, however, that job losses, particularly in areas like manufacturing, are not driven by trade as much as they are by technology. So it's the pace of technological advancement as much as anything else that is causing these disruptions."

The rhetoric in this instance is far ahead of the reality, should Turnbull actually believe his own utterances, as the idea-cupboard is bare besides a couple of notes with "Embrace It" written on them.

Automation and technical disruption are not new concepts, but this time around we are woefully unprepared for it. There needs to be a plan and support for those affected. Teaching students to understand the basics of programming is a worthy thing to do, but it doesn't help those already in the workforce who feel as though they have been consigned to the dustbin of history.

To expect average workers to get excited about the current wave of innovation when they cannot see a rosy future for themselves is insular, inside-the-beltway thinking.

It doesn't matter to those impacted by technology when the latest automation can cut the cost of a product by 25 percent, if an income is reduced by 80 percent, or even disappears completely.

Until the downside of disruption is expressed in a better format than "an economy in transition", politicians should continue to expect a lukewarm reception when the innovation buzzwords are bandied about.

ZDNet Monday Morning Opener

The Monday Morning Opener is our opening salvo for the week in tech. Since we run a global site, this editorial publishes on Monday at 8:00am AEST in Sydney, Australia, which is 6:00pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

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