This isn’t science fiction. In the last few weeks, Brazilian aerospace giant Embraer has signed an agreement with Uber to explore the manufacture of flying taxis between now and 2020. One of the world’s greatest experts on artificial intelligence, Howard Gardner, has claimed that “once one cedes high level decisions to digital creations, or these artificially intelligent entities cease to follow the instructions that have been programmed into them and rewrite their own processes, our species will no longer be dominant on this planet.”
Amidst such dizzying changes, Latin America cannot hide from the question of whether robots could perform our work more efficiently than we do. One particularly bleak prediction, which is based on a study commissioned by the IDB, suggests that 64.1% of jobs in Argentina and 66.4% of jobs in Uruguay run the risk of being automated. Other estimations indicate that at least 30% of the tasks that make up 60% of the jobs in the world may be replaced by robots. How should we take on the challenge of intelligent machines that are increasingly cheap and versatile?
The Institute for the Integration of Latin America and the Caribbean (INTAL), part of the Integration and Trade Sector at the Inter-American Development Bank (IDB), has brought together over 40 global experts in its latest publication, Robotlution: The Future of Work in Latin American Integration 4.0, to analyze the opportunities and challenges that new technologies are bringing, with a view to building an agenda that will allow us to successfully transition to a digital economy. The report is available for free download here.
A SOCIOTECHNOLOGICAL CONTRACT
Changes are happening at the speed of light. Disruptions are allowing us to create new markets out of thin air, making goods and professions obsolete as they are replaced by state-of-the-art tools through which the supply of services is multiplying at a marginal cost of close to zero.
In 2017, over 1.3 million industrial robots are operating in factories around the world, spearheaded by the automotive, electronic, and metallurgy industries. Some 75% of these industrial robots are concentrated in just five developed countries: South Korea, Germany, Sweden, Singapore, and Japan, which have the highest concentrations of robots per industrial worker (more than two robots per 100 workers). Only 27,700 of these are in Latin America and the Caribbean, where Mexico and Brazil are at the forefront of the robotization process.
What can we do to mitigate the negative effect of these changes and leverage the opportunities that are opening up? Latin America needs to build a sociotechnological contract that provides intelligent answers to these questions.
Some of the issues analyzed by the experts brought together by IDB/INTAL are:
- Cobotization. We are entering an era that will no longer distinguish between blue-collar (industrial) work and white-collar (professional) work but will instead center on the rise of so-called gray-collar work. This will entail a hybrid of hard and soft professional skills that workers will need to compete in an economy that is itself a digital/physical hybrid. Gray-collar workers will need empathy, emotional intelligence, and programming skills. Productivity increases will be predicated on the coexistence of robots and workers in the physical or virtual workspaces of the future, and they may not necessarily perform routine activities as their counterparts did during the earlier industrial revolutions. What will be paramount in making a socially significant difference will not be machines but human beings. As Oxford University expert Daniel Susskind points out in this publication, this will imply revolutionizing the education system by moving it away from the classic professional training paths we are still following.
- Reshoring? Low salaries will no longer be a necessary condition for competing in global value chains. Premature deindustrialization means that automation is a cheaper way to replace workers. When business owners were interviewed regarding the impact of 3D printers on production processes, 72% said that they thought this innovation would imply some degree of reshoring of the labor force. This points to the need for us to look at collective bargaining processes more imaginatively, such as by arguing for the inclusion of innovation clauses in contracts between business owners and workers. Another major challenge will be how we approach platforms for online, freelance work (which more than 50 million people throughout the world are now engaged in) and global services, which need to be combined with different ways of financing social security programs.
- Big Data + Precision Governments. Just 18 countries in the world have GDPs that are greater than the market value of big tech firms, which are currently promoting strategic partnerships between traditional industry and data companies: Ford is working with Google to produce driverless cars while Caterpillar and Airware are working on drone technology for mining. To successfully negotiate regulations, standards, and resource use with companies like these that are the driving forces behind exponential change, countries will need to develop new forms of innovation-oriented diplomacy and a civil service that is literate in the handling, analysis, and use of massive databases. Next-generation trade agreements (such as the ones signed by Canada in the European Union or Uruguay and Chile) are reinforcing the idea that intelligent, public–private integration tools could become drivers for a fairer distribution of digital dividends.
- Sharing and Collaborative Economies. So far in 2017, more than 100 million people have booked accommodation for short stays through Airbnb or other similar platforms. This is 100 times higher than all the rooms available through the largest hotel chain in the world, which has one million rooms. The ridesharing platform BlaBlaCar, which focuses on city-to-city transportation, now has 35 million members in 22 countries, and its daily operations are comparable to those of a national transportation network. Over half the operations of e-commerce giant Alibaba are mobile transactions. In Robotlution, Arun Sundararajan, an expert on the sharing economy at New York University, describes the need to reshape the social contract to agree on laws and regulations that take new forms of trade and employment into account.
- Made in China 2025: The new normal for the Chinese economy will be based on innovation and breakthrough technology. China is already manufacturing one out of every five robots that are built in the world. The annual growth rate for robot sales in the country is averaging 12% and it is estimated that figures will reach 130,000 units per year in late 2017. The Chinese government has launched two official plans for leading Chinese industry into the future: Made in China 2025, which focuses on the new manufacturing industry, and the Guidelines on Artificial Intelligence, which seeks to build an AI market worth US$150 billion by 2030. The country has even rolled out regional tech plans, such as Zhejiang Province’s 555 Plan, which establishes that 500 billion yuan will be invested every year for the next five years to implement 5,000 robotization projects. Other governments will have to create strategies of their own to ensure that they don’t miss the robotization boat and become less competitive.
- An Ethics of Inclusion. Latin America is the global region that has seen the lowest labor productivity growth over the last 50 years, with an annual average of just 0.4%. Almost one out of every five young people are not in education, employment, or training, 30% of the population live in poverty, and 47% of the labor market is informal, cash-in-hand employment with no social security benefits. The Gini coefficient for the region stands at around 0.48 (on a scale where 1 represents absolute equality in income distribution and 0 is total equality), so the automation of employment is prompting new debates around which public policies would best promote greater social inclusion. The menu of available options includes everything from taxes on robots to universal basic income, which, according to initial estimates, would cost an equivalent of approximately 17% of GDP. This is a key issue that needs to be part of the public agenda. It cannot be separated from ethical matters, as can be seen in the European Parliament report European Civil Law Rules in Robotics, which sets out value frameworks for developing industry 4.0 in Europe and warns of the dangers of social ties disintegrating while also promoting equal access to the progress that robotics is bringing.
According to the experts who contributed to Robotlution, the transition ahead will not be easy. We need to prepare for it by acting creatively and decisively. Somewhere on the spectrum between techno-utopianism and technoscepticism, there is a sweet spot where Latin America could develop an intelligent global role in exponential technological change.