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Home / Business / Economy / Employment

Liam Dann: Robot revolution? Our economy could use the boost.

Liam Dann
By Liam Dann
Business Editor at Large·Herald on Sunday·
30 Sep, 2017 04:00 PM5 mins to read

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Blade Runner starring Harrison Ford offered a dysttopian picture of the world in 2019. Picture supplied.

Blade Runner starring Harrison Ford offered a dysttopian picture of the world in 2019. Picture supplied.

Liam Dann
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
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I'm a big fan of the future. When I was a kid it couldn't come fast enough.

I wasn't even that optimistic about it. I grew up in the golden age of dystopian sci-fi.

In the 1980s it seemed more likely that the future would be post-apocalyptic: Mad Max style, with roving gangs of mohawked road warriors or controlled by robots as per The Terminator or Matrix.

There were also rosier versions, like Back to the Future's 21st century America.

But Blade Runner seemed like the most realistic prospect. It was set in dark urban landscape ruled by a giant monopolistic tech company.

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It was a privatised Orwellian world, divided between pristine corporate towers and steamy Third World back streets.

The fears that Blade Runner and Terminator tapped into still ring true in 2017.

It not surprising we now see both films being revisited by their original directors.

We still worry a lot about robots taking our jobs and there's no shortage of tech giants on the corporate landscape, threatening to play the part of Blade Runner's heartless Tyrell Corporation.

But it's worth remembering that Terminator's judgment day (when the machines took over and nuked us) was due in 1997.

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Blade Runner was set in 2019 and Back to The Future 2 had us on hover boards by 2015.

2001: A Space Odyssey, Space 1999 and 2000AD comics? Great stuff, but the titles haven't aged well.

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However, prescient sci-fi maybe the future usually takes longer to arrive than we expect.

Our fear of the future - robots taking our jobs or artificial intelligence turning us into mindless zombies - runs in stark contrast to our most pressing economic problem. That is lack of productivity improvement in the economy.

It was refreshing this week to see tech magazine Wired tackle the dilemma.

I've written my fair share of "robots will take our jobs" articles, but the Wired article by James Surowiecki argues that, like the sci-fi writers, we are getting ahead of ourselves.

Automation has been an employment issue for at least 200 years. But it has also been the great driver of productivity growth and wealth creation.

Apart from brief periods where the system stalled, mass unemployed has not emerged.

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Surowiecki argues we are "afraid of two contradictory futures at once".

Our current obsession with wage stagnation and lack of productivity suggests that it is the more pressing issue.

Robots, he argues, aren't coming to take our jobs fast enough.

In New Zealand the lack of investment in technology is often cited as one of the reasons for our low productivity growth.

We are currently, as JBWere strategist Bernard Doyle pointed out recently, in a productivity recession.

GDP has grown steadily but it has been propped up by immigration and record population growth.

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Between March 2000 and March this year GDP grew 52 per cent - an impressive average rate of 2.29 per cent a year.

On a per capita basis GDP growth averaged just 1.23 - still pretty good considering we've been through a dot.com crash and a GFC in that period.

But, Doyle's research shows, if we look at GDP per hours worked then the average growth rate has been just 0.72 per cent.

That is a depressing stat that will ring true for many Kiwis whose improved standard of living has been achieved through hours over-time or over-commitment to their salaried position.

We've been working harder not smarter.

It's easy to beat up the Government for this trend but it is important to note that it is a global problem.

The US leads the world in tech innovation. Despite the rise of Japan, Korea and China, US companies like Apple, Microsoft, Google, Facebook, Amazon and Uber still look most likely to deliver revolutionary technologies.

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Yet productivity in the US has also stalled.

Surowiecki notes that US labour productivity grew at nearly 3 per cent a year between 1947 and 1973.

Since 2007 it has grown at just 1.2 per cent and in the past two years it has 0.6 per cent.

That simply doesn't suggest a world where a robot workforce is replacing humans on any significant scale.

Beneath the bluster and theatrics of the New Zealand election campaign it was pleasing to see that productivity growth did get a look in.

It is something we can be sure that our next finance minister has thought a lot about - whether that be Steven Joyce or Grant Robertson.

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They have different ideological views on the role of government in driving it. And the pace at which we can afford to invest.

But both have argued that investment in technology as well as skills and education as crucial to New Zealand's future prosperity.

Whoever forms the next government, improving productivity growth will need to be near the top of the economic agenda. But it won't be easy.

To meet the expectations that have been raised during the election campaign New Zealand will need to lead the world on innovative and effective policy.

If we don't, then we can expect to see our streets looking more like those in Blade Runner as wealth creation continues to be the preserve of those who already own assets.

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