(Welcome to the UCLA Anderson Blog's coverage of TED Week. Our guest blogger for TED Week is Swati Desai, who will be tracking the various TED talks as we live stream them and also taking notes on various panels. For more information on the TED Week schedule, please click here.
Swati is a UCLA alum (Anderson, PhD, 1992) and the link to her website is www.swatidesai.com.
What follow are Desai's notes on the Progress Enigma talks and the panel discussion that followed.)
By Swati Desai
Session 1: PROGRESS ENIGMA followed by Anderson Panel by Management Consulting Association.
If you want to know what TED 2013 moderator Chris Anderson is suggesting by “big progress enigma,” answer the following yes/no questions first.
1) Are we going to make the same accelerated technological progress in the future?
2) Is this going to lead to economic growth?
If you answered NO to these questions, you are in Professor Robert J. Gordon’s camp and with 14% of the TED attendees. If your answer is YES, you are one of the majority of optimists who are attend TED and also agree with part of the ambitious high-achieving Anderson community. Regardless of which camp they belong to, all speakers in the TED session and the associated Anderson panel have strong views on the implications of technological progress and growth to in our lives, especially as related to employment and the quality of life around us.
The Gordon side of this argument declares the death of growth as we know it. Innovation and technological progress will not continue with the same acceleration and it cannot sustain economic growth for a long time in the future.
Professor Gordon argues that the Economic Growth (measured by GDP per capita) in the US, the way we know it, is over. From 1800s till 2007, the U.S. has experienced about 2% growth. In fact, the standard of living doubled in a mere 21 years around the 1950s. Since 2007 the economic growth has slowed down to 1%. Not just that, Professor Gordon predicts that this sluggish growth will continue for most of the century. The brunt of this slowdown will be borne by the bottom 99%of the population. In their case, it will not be just 1%, but it will be less than 0.5%.
Why is he proposing such pessimistic views? He claims that the technological progress or innovation will not have the same impact as it did in the past. Out of our three industrial revolutions (e.g. 1) steam engine, 2) electricity, indoor plumbing, 3) computers), first two had a huge long term impact on our growth and productivity, but the third one fell short after the initial burst in productivity. Starting from a highly inefficient horse buggy, it took us only 80 years to build Boeing commercial jets, but we have hardly made progress in that field since then. This reduced power of innovations is further weakened by four headwinds cutting the growth even more: demographics (hour/person is shrinking), education (high cost, student debts), Debt (over borrowing, federal debt), inequality (bottom 99% has gone down further).
The Innovation proponents in this argument claim that innovations have not only incredibly increased productivity, technological progress is going to provide answers to our problems, economic and quality of life.
Eric Brynjlfsson, the innovation researcher from MIT holds this view. Growth is not dead! In fact, productivity has increased in last 30 years. Innovation is the key to the growth. GDP does not measure all the free stuff available on the internet such as Google, Wiki, and so on. Currently we are in the new machine age which is digital, exponentially growing in ways that our brains are still catching up with, and it is combinatorial in which one innovation leads to another. There are some game changers such as machines that learn like humans. He is amazed at the rate in which Artificial Intelligence is progressing so fast, like in the computers that play chess or jeopardy. Eric proposes “racing with the machine” instead of competing with the machine, implying that humans and machines collaborate to beat any one thing. This is the key to a bright future.
To support this argument, another MIT professor Rodney Brooks, presented his own robot Baxter that can learn mechanical tasks as time goes by, just like humans have a learning curve. Robotics entrepreneur Keller Rinaudo presented his cute little toy that you can drive by using a remote device and it has feelings. He claims that a grandmother can use this to play remote hide and seek with her 8 year old granddaughter. He wants to make personal robots priced for a couple of hundred dollars for use in our daily life.
So these are the two opposing views about progress enigma.
There is a common ground to both these sides agree on! The growth we experience through innovation is not reaching the bottom half of our society. Eric Brynjolfsson and Professor Gordon both contend that the jobs created by technological progress do not cater to the needs of the refrigerator worker who only knows how to work in a refrigerator factory.
How do we fix this?
At least, how do we think about making innovation a source of creating employment?
1) Eric Brynjolfsson proposes shared prosperity and working in collaboration with machines.
2) Professor Gordon does not propose direct answers but he suggests policy changes like immigration reforms to allow technologically trained immigrants to get quick visas and the legalization of drugs to stop spending money on wrong things.
3) Professor Brooks (the Baxter creator) has an interesting argument about how robots can, in fact, fix the unemployment issue. The jobs that require tedious, unpleasant, or dangerous work can be done by robots instead of expensive and unwilling manual labor. This will bring manufacturing back to the US, helping to lower the rate of unemployment.
4) Jennifer Granholm, the ex-governor of Michigan, believes that innovations and their implementations in creating clean energy sources is going to help the US to create good paying jobs in the global economy. Simultaneously it will tackle the problem of global climate change. She proposes that private sector investors create a national competition for the Governors of all States that 80% of the state’s energy should come from clean energy sources by 2030. This will help to create good jobs and a national energy policy. A big idea with possibly a big impact!
5) Nilofer Merchant, the author of 11 Rules for Creating Values in the #SocialEra, believes that creativity (implying innovative thinking) needs to reconcile opposing forces together. For example, health and obligation can be reconciled together by having meetings in which you go for walks together.
6) Bono, the musician activist, who is working towards eradicating extreme poverty and inequality, has a very optimistic view of the future in which he predicts that by 2028 the poverty defined by income less that 25 cents per day could reach zero. He proposes that technological progress will help to fight the obstacles that are in the way of fighting poverty and inequality, for example fighting political corruption by exposing it online and fighting oppression by using social media. Technological innovations can take away the image of the powerless common man.
What does our Anderson panel think about this Progress Enigma?
The Anderson panel by Management Consulting Association consisted of faculty panelist Professor Bob Foster (’65) from DOT Management, alumni panelist Peter Cowen (managing director of MD of Angeles Capita)l, student panelist and author of “The History of Silicon valley” Arun Rao (’13), and student moderator Deepauk Murugesan (//). All of them, without exception, rejected the argument made by Professor Gordon.
The panel presented a very uplifting picture of innovation, productivity, and economic growth, buzzing with optimism about increased quality of life.
Professor Foster strongly objects to Gordon’s use of GDP per capita as the measure of the strength of innovation. The benefits of technology do not get reflected in GDP such as the advances in medicine generated by robots performing surgeries. The quality of life is a more appropriate measure of the impact of innovation.
Cowen thought that Gordon missed the whole point about the renaissance in the activities that have created an incredibly fertile environment to start businesses and to try again even when it fails. He chided Gordon by pointing to the claim that economists see cost of everything and value of none. Innovations in the speed of information retrieval and cloud computing are so ripe and this is the groundwork we are laying for growth. The unique thing about the US is that we allow innovators to fail and they get another chance.
Cowen claims that innovation today happens in a lot of small things and it leads to breakthroughs. We have capability for big data processing which gets reflected into how people use it. For example, during the hurricane Sandy crisis in New York, the WAITS application was used where to send gasoline from the limited supply depending on where the lines were the biggest. He points to the fact that although VC investment is shrinking, the non-VC investment in innovation has gone up tremendously. The innovation is not only about science but it is also about how to make it relevant to our lives. This is what is going to allow people to create companies that do this work.
Rao said that Gordon’s argument is completely flawed because he is focusing on the short term effect of the recession in last 5 years in claiming that the growth has become sluggish. In fact, in last ten years the growth because of innovation has gone up to 6%. He also points to the fact that innovations lead to savings. For example, Google’s driverless cars will save about 100 billion dollars in the costs involved in the traffic-related accidents and deaths.
The panel was animated and convincing. However, the panel did not really address the issue of inequality raised by both Gordon and Brynjolfsson in which they worry about the bottom echelon of the society experiencing unemployment and increased slowdown compared to the upper echelon which consists of the corporate leaders and successful innovators.
Does that answer lie in using technological advances in creating socially conscious businesses, microfinance, the era of high ideals, clean energy sources, and building robots that keep jobs in the country? Is innovation going to be the force not only for economic growth, but force for creating and enforcing a value-based growth: economic and social.
Does that answer lie in using technological advances in creating socially conscious businesses, microfinance, era of high ideals, clean energy sources, and building robots that keep jobs in the country? Is innovation going to be the force not only for economic growth, but force for creating and enforcing a value-based growth: economic and social.
This raises an important question for our Anderson community. How do we balance the burning personal ambition with the social responsibility? If innovation holds this irony of promoting growth and simultaneously creating economic inequality, how do we innovate by holding two goals at the same time, grow and help others to grow! How do we promote the implementation of innovation in a way that helps to share the prosperity?
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