---

Transcript of the video

Let me list for you the six headwinds that I think are particularly problematic today. Each of them is long-term, it’s intergenerational and therefore requires pragmatic long-term solutions to resolve.

In no particular order and then I’ll go through each of them, technology and the risk of a jobless underclass. Second, demographic shifts. Third, income inequality. Fourth, natural resource scarcity. Fifth, debt and number six, productivity.

So let me walk through each of these just to give you a bit of flavour. With respect to technology and the jobless underclass a report by Oxford Martin School in 2013 projected that by 2033, which is just a little while from now, 47 per cent of jobs in the United States will have been disintermediated. In fact, approximately three to four million jobs in the United States today are somehow linked to some kind of delivery vehicle, automated vehicle. And the risk as reported in this report and has been subsequently reported very often is that we may see those jobs go away.

We are ill-prepared for a model or for a world where those jobs are taken away and it’s not just about lowly skilled workers more and more because of AI and robotics there’s a real threat and concern about what this might do for even skilled workers. But let me take a step back and give you a reminder in history of how it is the world has evolved in previous incarnations where technology has evolved.

In 1900, so at the turn of the last century, 60 per cent of Americans were involved in agriculture. Today, that number is less than two per cent and we know what happened, people moved out of agriculture into manufacturing and from manufacturing into the service sector. Today, over 80 per cent of Americans are involved in the service sector and roughly 20 per cent are involved in the manufacturing sector.

The world today is now facing a new trend which more and more countries are moving to R&D and science and technology sectors. We could sit here and say well, what’s the big deal? In every era we’ve actually seen an improvement or a transition of people out of one sector into another. The challenge to public policy makers today is there does not seem at the moment to be a sector which is big enough to absorb the population of unskilled workers that we have around the world today.

According to the ILO, the International Labour Organization there are approximately 100 million young people between the ages of 18 and 25 who are out of work. In Europe they call them NEETS, no education, employment or training. And if you think about this in the context of really trying to stabilize economies but offer opportunities for people longer term, this is where the real concern is.

[00:03:21]

John Maynard Keynes, the British economist in 1930s, predicted that by 2030 we would actually see a 15 hour work week. I usually get people cheering at that time when I say that. He did ask the question or he posed the question, what will people be doing if they’re working only 15 hours a week?

And his answer was he hoped that we’d be contemplating God, but for now, the role of a pessimistic politician and economist is to say, well what happens in a world where there is not another sector to emerge and absorb this population?

[4.07 minutes]

---

This video was filmed as part of the Big Ideas Speaker series at Rotman on April 23, 2018.