Embrace big data and robots — they’re the future of work

President Donald Trump’s July 19 executive order establishing the President’s National Council for the American Worker is directed at preparing Americans for the workplace of the future. Although short on specifics, the order sends a powerful message about the need for revitalizing educational opportunities if Americans are to thrive in the era of big data, robots and artificial intelligence.

The president’s intent is to lay the groundwork for tackling a national “skills crisis.” His order accepts that Americans need additional skills to fill the current 6.7 million job vacancies. In fact, the executive order gives official imprimatur to what many in industry and academia have feared for some time: “The economy is changing at a rapid pace because of the technology, automation, and artificial intelligence,” and existing programs have “prepared Americans for the economy of the past.” Further, the order recognizes the folly of one-shot education and suggests fostering lifelong learning.

{mosads}he National Council for the American Worker will be co-chaired by the secretaries of the Departments of Commerce and Labor, the assistant to the president for domestic policy, and the president’s adviser overseeing the Office of Economic Initiatives. The council is charged with developing recommendations for policy and strategy — specifically, how the federal government can work with private employers and educational institutions to create and promote workforce development strategies; foster close coordination, cooperation and information exchange; and ensure consistency in implementing policies and actions.

The council is mandated to do certain things within 180 days. These include drafting plans for increasing “the use of industry‑recognized, portable credentials”; increasing apprenticeships and work-integrated learning; promoting greater use of e-learning; fostering partnerships between educational institutions and businesses; and increasing transparency in educational programs. The president also established the American Workforce Policy Advisory Board, and tapped the  Department of Commerce to provide necessary support to both the council and the advisory board.

President Trump is responding to a real problem. Research has established the potential for automation and potential redundancy of humans in the workplace. For example, Carl Frey and Michael Osborne identified the potential for jobs to be automated by assessing tasks performed by 702 U.S. occupations and concluded that 47 percent of occupations could be automated by 2030. The McKinsey Global Institute’s report in December 2017 determined that 50 percent of paid work activities are technically automatable, based on existing technologies. McKinsey’s research revealed that one-third of constituent activities in 60 percent of occupations are capable of automation by 2030.

In March 2018, the Organisation for Economic Co-operation and Development issued a report showing that 14 percent of all jobs in 32 countries are highly automatable, and another 32 percent of all jobs are likely to undergo significant change. That report also found that workers most vulnerable to redundancy — older, lower-skilled, and non-university educated  — are least likely to receive help to upgrade their skills.

Some might respond that previous waves of automation actually have created jobs, not destroyed them. While that was true in the past, things might be different now because modern machines can process vast amounts of data very efficiently. And that is being supplemented by machine learning (AI). So, machines are able to perform not just routine tasks but also to learn from programmed tasks to perform new ones.  

Clearly, for a profit-maximizing corporation, machines are ideal workers: they’re tireless; willing to work 24/7; have perfect memories; and make fewer mistakes. They also don’t join unions, demand health insurance, or complain about their bosses.

We should expect that companies will continue to push hard for automation. And rather than resist it, America should embrace this future of work and identify areas where humans can work alongside machines more efficiently. This will require retraining at-risk workers before they become redundant. Logically, advance knowledge about redundancy is closely guarded by employers, but if employers have incentives to be transparent and retrain their workers, rather than tossing them out, there will be a net welfare gain. Tax reform is one avenue to achieve this, by providing a tax credit for training costs.

The executive order’s recognition of credentials is sound policy. Many university programs are rigid bundles — students have to commit to a costly, four-year investment and take courses for which they may have little interest or need. Unbundling these programs and allowing students to complete shorter credentials that are portable will be more efficient. It may also expand the demand for courses from mature students.

Equally, the emphasis on online education is smart — it is cheaper, more flexible, and accords with contemporary student expectations. The university sector needs to overcome its snobbery and accept that quality online education is possible. If online education is supplemented by experiential learning supported by employers, the cost of university education can be drastically reduced while enhancing employment outcomes. This will yield new income, internationalize the learning experience for American students, disperse American ideas, build valuable networks and reduce skills deficits globally.

Still, President Trump needs to do more than create a council to prepare America for the changing workplace. He must employ the power of the purse — through funding and tax policy — to supply the disruptive innovation that’s necessary in higher education. And he must push his deregulation agenda into higher ed (a notable omission in this executive order) if true change is to happen. Otherwise, Americans will not just lose jobs, they will lose the race to the future to China.

Sandeep Gopalan is a professor of law and pro vice chancellor for academic innovation at Deakin University in Melbourne, Australia. He previously was co-chairman or vice chairman of American Bar Association committees on aerospace/defense and international transactions, a member of the ABA’s immigration commission, and dean of three law schools in Ireland and Australia. He has taught law in four countries and served as a visiting scholar at universities in France and Germany.