The productivity paradox

two people at a tech startup productively working in a quiet space

Armchair arguments around the future of work usually go something like this: 

“The machines are going to take all of our jobs!”

“Yes, but who’s going to make those machines?”

There’s understandably a lot of interest in—and a lot of research about—the socioeconomic impact of technologies like 5G, machine learning, artificial intelligence and augmented reality. And it’s hard to think of any time since the dawn of the Industrial Revolution when technology has had such a huge impact on the world of work. 

We can think about this impact in three ways: how technology can augment what we do; how it will make us more productive; and, related to this, how it will give us more time. Better, faster, more (more or less). 

Economists see productivity as the single most indicator of progress; of a country’s ability to improve living standards. The accepted theory is that increased productivity decreases costs and then prices; the increased profits lead to higher wages, which leads to more disposable income; this increases demand in the economy, which stimulates employment. But enough with Economics 101. 

Unsurprisingly, perhaps, digital industries are at the forefront of applying technology to enhance productivity. From 1996 to 2016, digital industries grew their employment by 29 percent, while physical industries grew theirs by only 20 percent1. Why haven’t we seen similar gains in physical industries? The answer appears to lie in their more cautious approach to technology. 

By adopting an incremental approach to automation, physical industries don’t appear to be generating enough of a productivity gain to create the knock-on effects. That implies some kind of tipping point that has to be reached or a minimum scale of automation for it to be able to reap dividends. But is that about to change? There are strong indications that it will. 

Industrial productivity

Two people printing prototype models using a 3D printer

Let’s acknowledge that automating an industrial process isn’t easy. You really need to understand the dynamics of the process, have the technology to monitor those changing dynamics, and the technical wherewithal to adapt in real-time. That’s much easier to do in a digital environment than a physical one.

However, emerging into the mainstream is a wave of hybrid digital/physical technologies that can provide the breakthrough we need: things like robotics, autonomous vehicles, 3D printing, Industrial IoT, and augmented/virtual/mixed reality solutions. Combine them with machine learning and 5G and you have the ability to automate and remotely control a vast array of processes. This confluence of technologies is unique in the history of humankind. 

Working hours

Across all walks of life, advances in technology have allowed us to do things more quickly, theoretically giving us more time for other things. The reason this doesn’t always translate into increased leisure is more to do with traditional practices and societal norms. But generally speaking, the working week has been continuously decreasing for the last 200 years or so as more technology finds its place in the workplace. 

When massive-scale automation finally delivers the promised breakthrough in physical productivity, economic theory dictates that work hours will reduce to maintain employment rates. There’s also a growing body of evidence2 showing that shorter working weeks stimulate an increase in productivity, including several high-profile trials of 4-day working weeks. 

Old dogs, new tricks

A sand mining terminal facility with conveyer belts and silos

So technology makes us faster and more productive at what we do. It also has a positive impact on working lives. 

In the more developed economies, we’ve seen declining employment over decades in sectors like manufacturing, mining and utilities. This stems not from technology but from the difficulty in finding skilled workers, a situation that is worsening as the population ages and skillsets retire. In addition, the education sector is not really geared to helping employees adapt to a fast-changing workplace. That requires continuous learning through employers, with technology again providing an answer. 

Augmentation technology is a new domain where machines and human-machine interfaces are explicitly designed to augment people with skills, knowledge and intelligence to perform new tasks. This has huge implications. The specialist workforce that is so hard to find can be replaced with a different skillset. Adaptability, dexterity, quick thinking and common sense will replace domain-specific expertise. Imagine a worker wearing a headset that overlays augmented reality visuals that guide them through a task.

These workers will be just as valued as those with domain-specific expertise as they will be able to move easily across a wide range of jobs. The potential talent pool for employers will be much larger, meaning the time and cost spent looking for specific skills will be reduced. And employees with varied jobs are generally more engaged and productive than one-trick ponies. That doesn’t mean we’ll no longer need experts. They too will benefit from augmented intelligence to conceive the as-yet inconceivable. And there are many critical cognitive and bespoke physical tasks where human instinct, judgment, and emotions will simply never be replaced by machines. 

Work-tech balance

The work-life balance widely prized by many has been joined by a work-tech balance where a perfect blend of human and machine can bring much more reward to people, societies and economies than either can alone.

Read the Future of Work whitepaper by Nokia Bell Labs here.

Further reading

  1. Data source: Michael Mandel and Bret Swanson
  2. McGregor, 2019; Glaveski, 2018; Collewet & Sauermann, 2017

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