East London Business Place, Heron Quays in London Borough of Tower Hamlets, London. Wikicommons/Chmee2. Some rights reserved.For a long time, we have let our societies and economies become little more than engines of GDP growth. The base assumptions of most economists today remain grounded in early twentieth century theories, espoused by predecessors who yearned for their profession to be viewed as an exact science like physics or chemistry.
Free markets, the theory went, provided the most efficient means for distributing resources across societies, with supply and demand creating a natural equilibrium to drive overall output, or GDP. Therefore, GDP per capita could be seen as a proxy for the health of an economy. In this model, people are reduced to individual units of production denominated in dollars.
But despite this orthodoxy becoming pervasive, we now understand that markets are imperfect and that average levels of GDP mask huge inequalities. In the US, for example, income disparities have become so pronounced that America’s top 10 per cent now average nearly nine times as much income as the bottom 90 per cent.
We desperately need a rethink of our approach to economics and how individuals fit within the economy. Automation and the casualisation of work could combine to seriously lower peoples’ prospects for secure, prosperous lives if we don’t venture from our current path.
Changing notions of work
Boston Consulting Group predicts that the share of tasks performed by robots will rise from a global average of around 10% across all manufacturing industries today to around 25% by 2025. This outlook is relatively consistent across industrialised economies – 47% of American jobs, 49% of Japanese and 35% of British jobs are at “high risk of automation”.
Automation raises the prospect of largescale technological unemployment. In an economy that always drives for higher margins and greater efficiency, it would be foolish to think that with every shift in the economy, new jobs are created. When automated cars replace taxis, there won’t be a secondary role for the former drivers. Those jobs will be gone for good.
Simultaneously, the tide of casualisation is rising, and it risks washing away the security and stability a good job can provide.
In the UK alone, over 900,000 people are now on zero-hour contracts. This means their employer’s commitment to them in terms of providing work and benefits is minimal. There has also been a sharp increase in the number of people claiming to be self-employed – now over 4.6 million. However there are some serious concerns that too many self-employed people are not getting by. Some estimates have suggested that 80% of self-employed people live below the poverty line.
Engaging citizens in the debate
At UCL’s Institute for Global Prosperity (IGP), we believe that engaging citizens in debates around the future of work as a component of wider prosperity is crucial.
For example, one of our most significant pieces of work last year was the development of a new Prosperity Index, based on an innovative fieldwork process in East London. We recruited 10 local ‘citizen scientists’ to join with IGP researchers to gather and interpret data by interviewing over 600 individuals, business owners and community groups. This led to the creation of a new indicator model for measuring prosperity that sees us taking account both of official statistics on, say, median income levels as well as local residents’ personal sense of purpose, their ideas about work-life balance and feelings of financial stress.
The key thing here is that the IGP wasn’t prescriptive about this: we created an environment where it was possible to crowdsource ideas and views.
The co-creation of the new Prosperity Index shows how a collaborative approach that harnesses the skills and experiences of a diverse group of people can lead to better research. But it also proves to me that you can start to get people thinking about interconnected problems in completely different ways. But let’s be clear: our real challenge lies in having powerful decision-makers break away from their dogmatic approach to our economy, where growth is the only barometer of success.
Rather than reducing human experience to a series of objective, quantitative metrics (usually drawn from official national statistics), we’ve come up with a hybrid model that brings in subjective, qualitative information about real lives. This is really the only way you can address the angst many of us feel, that boils down to the rhetorical questions: Is what I’m doing worthwhile? and What kind of a good life can I hope for? This is at the very heart of the idea of prosperity: a sense of flourishing. And central to that is the self-perception that what you do – in work, in life – adds some value, creates some meaning.
This is the standpoint we need to get to as we tackle the future issues around work that are going to confront us. This means engaging citizens in a discussion about the alternatives, consequences and benefits of the big issues weighing down on traditional norms – whether that be automation, the changing expectations people have of what constitutes a job or a workplace, or the intergenerational disparities that have emerged when it comes to job security or pension entitlements.
The cry cannot simply be: ‘Automation is coming! How do we get people displaced by automation into other jobs?’ Instead, we need to move beyond growth to putting people’s prosperity – in the widest sense – at the heart of policies and moving beyond the bogeyman of automation to engaging citizens in focused foresight about how to make lives more liveable and worthwhile.
Many businesses have already recognised the need to prioritise the creation of environmental and social value, as well as financial value. Some businesses are reacting to the challenge set out by the Sustainable Development Goals to change the way we currently think of our economies – as the way to create value rather than simply growth for its own sake. The Institute for Global Prosperity has set up Fast Forward 2030 as a platform and network for such businesses in order to raise the profile of a better way of doing things.
But relying on a proportion of well-intentioned businesses is no substitute for the right kind of politics. If we surrender control of our economy to those who believe only in economic growth, we risk creating even more of a two-tiered society, where more and more people compete for a shrinking number of poor-quality jobs. We need to form clearer ideas of alternatives to this.
People have been talking about how we might deal with these issues for a while. In these conversations, solutions once thought unthinkably radical have become part of mainstream conversation. Bill Gates has even called for a tax on robots that take peoples’ jobs, allowing us to fund the care economy.
But let’s be clear: our real challenge lies in having powerful decision-makers break away from their dogmatic approach to our economy, where growth is the only barometer of success.