November 13, 2017
Technology and the Future of Work
As a lobbyist whose career has largely been built around the representation of business interests, most particularly those in the service sector, I know first-hand that the technologies you are creating are transforming labor intensive industries. And while this innovation is surely exciting, it is deeply destabilizing to most of America—especially those regions of middle America that feel left behind and all too vulnerable to outside forces. My central thesis is this: your policy agenda—no matter how meritorious and rational—will be greatly affected by how the public perceives the role of technology in affecting economic and social dislocation.
The line from the theme song to the iconic TV show, “Cheers,” seems appropriate here. For most of us, we really do “want to go where everyone knows your name.” We still value human connections and the engagement we have with others shapes our choices. Many of the industry segments that I represent are and will be the beneficiaries of your creative genius. The restaurant, retail, and franchising industries, for example, are leveraging technologies to improve the consumer experience—often by facilitating better quality interaction between the consumer and service professionals.
However, you should not underestimate the difficult “Sophie’s Choice” decisions that your products create for the service industry. When technology allows a quick service restaurant operator to cut his workforce by one third, thus helping to dramatically reduce labor and related overhead costs, that decision carries consequences. As one of America’s largest private sector employers, a core underpinning of the restaurant industry’s public policy agenda is the assertion that they create short-term as well as career opportunities for many of the most economically disenfranchised Americans: young people, minorities, the disabled, ex-offenders, and more. The power of the entrepreneurial dream surges throughout every segment of the industry. For a nation that is in danger of losing its belief in the American Dream, the retail, franchising, and restaurant sectors still offer a means for achieving that goal. Think of the service sector for what it is: the embodiment of a 21st Century American opportunity society.
So, why is this relevant to this conversation? Many if not most service sector employers and jobs creators hold steadfastly to the belief that they can enrich their own lives AND the lives of their employees. The social compact, to the extent that that novel concept still exists today, deeply resonates with business people who understand that their commercial success is largely a tribute to their workers, and for whom job recruitment and retention remain enormous priorities.
Technology can challenge this notion. Ask yourself this: as technology and automation reshape the service sector, which employees are most likely to be affected? If you identified the economically disenfranchised groups that I just enumerated, then you get a gold star. It’s easy for tech to dismiss this concern as another industry’s problem, but remember this point: elected officials may love technology, but at the end of the day they covet jobs creators and the people who work for them. Go to any elected official and tell them that you’re going to bring to their community a business that can employ 1,000 people, many of them at an entry level, and you have their complete attention.
Factory closings; corporate down-sizing; and offshoring have taken a toll on everyone, including politicians. As surely as Congress contemplates the need for potential regulation of social media in the wake of Russian hacking in the 2016 election, so, too, it will turn a wary eye towards the employment and social dislocation caused by your work. Let’s again look at the restaurant industry:
- 81% of all restaurants use POS or electronic cash register systems;
- 80% believe that technology helps to increase sales, make them more productive, and provides a competitive advantage;
- one-third have a smartphone app; and the majority provide Wi-Fi for guests;
- Looking to the future, predictive ordering, menu adjustment technologies, and even drone food delivery, are appealing to the industry.
The challenge then for the technology world will be to focus in on new offerings that enhance efficiency, control costs, and improve the customer experience while not eviscerating its workforce base. Human beings remain a critical component of their success.
The Bureau of Labor Statistics recently released a report with its projections for US employment in 2026. BLS foresees an economy increasingly dominated by the service sector; fewer manufacturing jobs; and greater earnings disparity with geography playing a major role. BLS asserted that amongst the most vulnerable jobs were ones that paid well but didn’t require a college education, precisely the ones likely to be most affected by changing technologies. In a recent article, columnist Eugene Robinson made this observation: “Today’s key fault lines may be between metropolitan areas and the exurbs and small towns strung along the interstates; between those who have gone to college and those who have not; between families that have benefited from the globalized economy and those who have not; and between an anxious and shrinking white majority and the minority groups that within a couple of decades will constitute more than half the population”.
My caution for you is that public policy is never made in a vacuum, and that merit alone rarely carries the day. The more that technology changes the American workplace, the greater the scrutiny it will receive from elected officials as well as from its target business markets. A recent Survey Monkey poll released last week found that fifty-five percent of all Americans believe that, looking ten years ahead, technology will take away more jobs than it creates. Job loss due to globalization and despite low unemployment rates was a major issue in the 2016 Presidential race, and remains a hot-button topic in both political parties. I know that technological change and automation creates new jobs, often through new positions where none existed. But, that’s a data point. Elected officials and business people make decisions driven by other powerful human imperatives. Perception, not factual realities, usually prevail when government engages. Let’s look at an example of where this tension manifests itself. An October 25 story in The Hill discussed the growth in the drone industry and contained this quote “But the industry, which has the potential to create tens of thousands of US jobs, has said that regulatory control over the national airspace has stifled innovation”. Perhaps true, but larger societal concerns about terrorism, privacy, and the ever shrinking boundaries to the way we live our lives, are likely to be more determinative about the evolution of the drone industry than the tens of thousands of jobs it can create.
Increasingly dominant populist voices in both Parties are the cutting edge of the fight to redefine the terms and conditions through which technology and automation will effectuate change. Fear is always a powerful force in life but especially in politics. For all of the reasons that voters hate negative campaigning, the reason it endures is because it works.
Let me close with a personal insight. I’m not a luddite. My personal and professional life has been enormously enriched by new technologies. Since December of last year, my wife and I have been the proud owners of a Tesla. Though I still all too often refer to plugging it into my home charging station as “filling it up,” we drive it each and every day with delight and fascination. It may interest you to know that when we purchased the vehicle, we didn’t buy the autonomous driving capability. Why, you ask? Because while turning control of the vehicle over to a “higher technological power” makes absolute intellectual sense, it still emotionally scares the hell out of me. Describe me as being half pregnant if you will, but as educated, informed consumers who value technology, I’m just not there yet. I think that in many important and all too human ways, the quandary remains how technology and human emotions will align. Most Americans view technological change as being welcome; what it less welcomed and remains largely misunderstood is the social, economic, and human disruptions and perceptions all too often associated with it.