Technology to eliminate half of world’s four billion jobs in a decade or two

In a decade or two, half of the world’s four billion jobs will be eliminated by technology. Thankfully, Australia is prepared.

French President Emmanuel Macron has inspired a new wave of optimism in Europe. Photo: AFP

Two stunning global facts emerged at the Australian Leadership Retreat at the weekend.

The first was that in a decade or two, half the world’s four billion jobs will be eliminated by technology. That means that today’s conventional employment will be decimated but the next generation will develop entrepreneurial skills and create their own jobs.

Many of the delegates said their children were already deep into contracting rather than conventional employment.

In this new era there will be obvious disruptions and pain but out of it will come a very exciting society.

In preparation for the transformation, Australia is surprisingly advanced, with the world’s first unfair contracts legislation, the effects test bill, the drive for large companies to pay in one month and the new franchise protection legislation. But we have a major weakness in the tax system with small enterprises having very limited rights for a fair appeal. Entrenched vested interests fight the necessary measures to prepare the society for the transformation at every turn. But that’s no surprise.

The new technologies that will drive part of the transformation include the ability to gather far more data than has ever been possible and use that data for better decision making. Quantum computing will take data gathering to new dimensions. Large companies and the public service will need to break down their department and silo walls to allow these new aids to better decision making that take into account unintended side effects of, say, a new agricultural practice. And agriculture is a big beneficiary of this trend as markets can be incorporated into farm practice.

Secondly in 2015, the wealth of the top one per cent of the world exceeded the other 99 per cent. The current systems of globalisation are creating a great wealth divide and are leading to a complete loss faith in the political system by a majority of people in western nations. Longer term, huge wealth differential is not sustainable in western democracies.

While I knew these two basic facts they led me to list 10 other facts or situations that emerged at the retreat that either surprised or caught me off guard.

1. China has 20 per cent of the world’s population but only 7 per cent of the world’s fresh water and 60 per cent of that water is polluted. The one belt, one road network initiative has many aims but one of them is to secure China’s food supply. It also helps explain why China is so active in Australian agriculture investment and the Chinese requirement under pins long term demand.

2. A new wave of optimism is sweeping Europe. The election of Emmanuel Macron as French president has ignited European believers. France will need to withstand the strikes that will accompany labour practice changes but, if they do, it will inspire Italy and other countries to follow. Europe will also have to overcome any rise in Islamic terrorism, high youth unemployment, and that the fact that its banks are still hiding vast amounts of under performing loans. Europeans at the retreat dared to say their systems might be better than the US.

3. Some of the great educational institutions in the US like Harvard have been captured either by extreme left wingers or extreme feminists and this is influencing what is politically correct to teach. At least one attendee at the retreat will cancel his regular donations.

4. Many thousands of young Africans are now attending Chinese universities and are being educated in English. China is making it very easy for African entrepreneurs to buy goods made in China as well and developing African infrastructure and resources. Over time much of African commerce will be linked to China. But India is also becoming active in Africa but is well behind China.

5. Quantitative easing in the US did not greatly stimulate the US or cause inflation as expected because the big banks merely swapped their bonds for bank reserves. Those reserves could have been used to back loans to the community but after the GFC Americans had no appetite to borrow.

6. The new technologies, including quantum computing, will enable drugs to be tailored to the individual’s requirements as analysed from DNA. Unintended side effects will be greatly reduced. That’s exciting but the technology will also enable people to have inserted in their brain chips that connect to computing power than enhances their abilities. That’s frightening.

7. The greatest long term threats to markets and economies, particularly in the US, are the enormous long term and unfunded pension promises made to government, including local government employees. In the case of US cities, the pensions will be paid at the expense of people who have loaned the local governments money.

8. Australian universities continue to have difficulty transferring their considerable research knowledge and abilities into the private sector. Companies say that the university cultures are too often incompatible with the way the private sector operates.

9. While artificial intelligence will be a big long term driver of change, a much earlier change agent will be drones which are set to transform deliveries, security, agriculture, mapping, electrical tower inspection and many other areas.

10. An even greater disruption will be created by driverless vehicles, including trucks.