Discussion paper

As machines become increasingly capable of performing tasks once thought to be the sole preserve of people, some commentators have raised the spectre of mass unemployment and profound economic disruption. Yet despite the growing capability of robots and artificial intelligence (AI), we are not on the cusp of a ‘post-human’ economy. Automation will produce significant productivity gains that will reshape specific sectors and occupations. In aggregate, however, these gains are likely to be recirculated, with jobs reallocated rather than eliminated, economic output increased, and new sources of wealth created.

The critical challenge of automation is likely to be in distribution rather than production. If the benefits are fairly shared, automation can help build an economy where prosperity is underpinned by justice, with a more equitable distribution of wealth, income and working time. But there is no guarantee that this will occur. Managed poorly, automation could create a ‘paradox of plenty’: society would be far richer in aggregate, but, for many individuals and communities, technological change could reinforce inequalities of power and reward.

The pace, extent, and distributional effects of automation will be determined by our collective choices and institutional arrangements, and the broader distribution of economic power in society. The future will not be technologically determined; it will be what we choose to create. Public policy should therefore actively shape the direction and outcome of automation to ensure its benefits are fairly shared. Three broad steps can help achieve this.

First, realising the benefits of technological advances will require the managed acceleration of automation and the adoption of digital technologies throughout the economy. Government needs to provide greater support for firms in all sectors and parts of the country to integrate new technologies, improve management, achieve higher rates of investment, and enable a stronger voice for employees in shaping the use of technology at work. The skills system also needs to be reformed to ensure people can thrive in an era of greater human-machine collaboration.

Second, new public institutions are needed to inform and regulate how automating technologies are used and to ensure that society responds proactively to the profound ethical issues raised by robotics and artificial intelligence.

Third, new models of collective ownership are required to ensure that everyone has a claim on the dividends of technological change, to enable automation to work for the common good.

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