AI, Resilience and the Future of Work
richard baldwin brings us the buzz from the world economic forum in davos
"Cooperation in a Fragmented World," the topic of this year's World Economic Forum in Davos, marked the end of a "year of shocks and upheaval," as TASC Platform Co-Chair, economist and Professor Richard Baldwin, describes it. Baldwin, who has been a regular attendee at the forum, sat down with the TASC Platform team to share his takeaways from the Annual Meeting in January.
Generative Artificial Intelligence, Machine Learning and the Future of Work
The launch of new generative A.I. programs such as chat GPT in the months before the conference, and their potential impact on work and jobs, was at the core of discussions in corridors and on the formal agenda. “AI is already having a significant impact on various industries, from finance to healthcare, and breakthroughs in generative AI will change jobs very quickly.” This is, of course, linked to Baldwin's concept of "Globotics Upheaval," which refers to the ways in which globalization and automation are changing the nature of work.
“While there is undoubtedly a risk of job displacement due to A.I., it is essential to remember that technology has always had a varied impact on the job market. Different technological breakthroughs have either replaced or complemented workers.”
Baldwin went on to say that, while the impact of A.I. on the job market is still uncertain, “I believe this technology will most likely be a complement to workers, enabling them to to things better and leading to higher pay and better work.” He goes on to explain, “machine learning is canned wisdom. It replaces experience-based pattern recognition, gained from years on the job, with data-based pattern recognition. My prediction is that it will create a new set of middle professionals who don’t have very much experience, but have access to machine learning - for example, between nurse and doctor, draftsman and architect, road chiefs and engineers, and so forth. Less trained people will see their ability to make decisions increase most significantly. It will change every white-collar job, but it is most likely to be equalizing at the middle skills level”.
Ultimately, a year of shocks requires a discussion on how we could prepare for future upheaval, whether in tech, labour, or economies at large. In his own message to the Davos community regarding the changes in the labour market brought about by digital technology, Baldwin says, "There is nothing new with people changing jobs. The difference this time is the speed and scale of change and the shift towards disintegrated labour contracts, with a rise in the share of people working independently. Social welfare systems currently place a lot of burden and taxes on companies. As companies move to freelancing, offshoring and outsourcing, people will need to worry about portable pensions, healthcare, childcare and maternity leave. We have to adapt how social benefits are delivered and paid for. This can be done through active labour market policies, and by moving away from corporate contracts. Protect the workers, not the jobs.”
Evolving Experience: Working in the Metaverse
As a participant in the Forum’s "metaverse experience", Richard Baldwin had a particular insight into a new world of work. The WEF is working with Accenture and Microsoft MESH to create ‘The Global Collaboration Village’ - a new metaverse platform aimed at fostering virtual multistakeholder collaboration.
While this technology is not quite ready for prime time yet, Baldwin is quick to point out the rapid evolution. "Companies are already using this technology for employee onboarding and creating virtual headquarters that are more physical and immersive, allowing for a better understanding of body language and reactions. This is the second time I've done the experience at Davos, and each time it gets a little bit better; you can see people reacting to each other, and you can kind of move around", he says, "but it is still a long way from the headlines."
The core of the conversation: Evolving global value chains and the future of growth
In a year filled with such shocks, reshuffling of global supply chains and their impact on globalization were at the core of the agenda with conversations on De-Globalization or Re-Globalization and Reshuffling Value Chains. These discussions are tending to presume a degree of de-globalization - that global value chains are re-shoring, need to reshore, and that resilience is a frontline issue. This is a position Baldwin does not always agree with: "this is definitely going to happen in a few industries like semiconductors and medical supplies, maybe battery electric batteries. But other than that, I don't think it's really going to take off as it's too expensive and too difficult to change," he says. “But businesses have realized that they are in a different world when it comes to shocks, so they themselves are already starting to setup multiple global hubs.”
However, these are shocks that, according to Baldwin, could and should be contained to strive for stability, vitality, and resilience. An attempt to do this was found in the inception of the new 'Future of Growth Consortium,' which aims to develop and disseminate a new multidimensional framework emphasizing purpose-led growth. “The premise is that growth is necessary to alleviate world poverty and that regression is not the answer. However, this growth cannot keep going in the usual, carbon-intensive, purely profit-driven manner. We must find new ways to grow”. The American economist Larry Summers, who also spoke at this meeting, argues, "we should rely more on technology forcing rather than externality internalizing," which Baldwin translates as “instead of taxing carbon, so people use less of it (internalizing the externality), you force technology which will make say solar cheaper than oil.” A cautiously optimistic take on the future of trade. Baldwin will be contributing to the coalition on the subject of service-led growth, “an area of promise because it is both greener than manufacturing or agriculture-led growth, and gendered - employing a higher share of women than other export-oriented industries.”
Next on the agenda: Topics to watch
Quantum computing, security, and resilience
The potential for imminent breakthroughs in quantum computing is leading to concern for their ability to decrypt security systems. “That would change the world overnight. It’s a big big thing.” Companies are preparing for this by building modularity into their security systems, to allow them to switch systems quickly in the event of a shock. Scenario planning and computing system resilience will be key to preparing for these technological shocks. “Quantum will break all current encryption protocols. That's for sure. The question is when, and whether we're ready for it or not” says Baldwin. “We need to prepare for the once in a century tsunami.”
Impact of open-source intelligence on international relations
Open-source intelligence is becoming an increasingly important aspect of international relations. This shift is reflected by the social media coverage of the war in Ukraine. The capacity for everyone to take photos on the ground and publish them is already a rich source of open data for both sides of the conflict. Baldwin notes that open source intelligence goes beyond sharing photos on social media. “They can immediately geolocate the photo from satellite images to perform bomb damage assessment, for example, which would otherwise be really difficult.” The information is freely available to anyone online and can allow some hobbyists to create remarkable data compilations. Baldwin mentions the twitter user who “plotted the entire Russian trench system that were built over the last few months” and argues this represents a turning point for this and future wars.
A trail-blazer for future cooperation
A significant and optimistic event at Davos was the launch of a Coalition of Trade Ministers on Climate, involving over 50 ministers of trade. The coalition, led by trade ministers from Ecuador, the European Union, Kenya, and New Zealand, seeks to provide high-level leadership and guidance to boost inclusive international cooperation on the nexus of climate, trade, and sustainable development. The Forum on Trade, Environment and the SDGs (TESS), hosted within CTEI’s Geneva Trade Platform (GTP) which Baldwin also chairs, is proud to have been working with the co-leads on the creation of their coalition and that TESS Director, Carolyn Deere Birkbeck, was invited to moderate the landmark launch meeting.
Baldwin emphasizes the importance of the step, noting that the trading system can have massive implications on broader social goals. Not to mention that this example of cooperation could influence other fields. “Could there be a similar coalition for trade and labour in the future?”.
Diversity of voice and representation
The inclusion of indigenous people and their perspectives notably reflected the conscious trend towards broader inclusion and empowerment, with a dedicated session on Indigenous peoples and trade. This is a new vision for trade, driven partly by the project on trade and indigenous peoples and showing hints of diversity in engagement and representation at the event.
The bottom line
Ultimately, the discussions at Davos were a reflection of our current attempts to mediate the effects of shocks that have changed the world in just a few months. Digital technology, including breakthroughs like ChatGPT have justifiably taken centre stage, and will continue to be a source of disruption with a rapid proliferation of apps and approaches to help people use and develop the technology. However, rapid inflation, the reshuffling of global supply chains, and other more familiar topics cannot be ignored as contributors to major shocks in the past year.
Nevertheless, the Davos crowd did not seem fazed by these developments, instead opting to focus on cooperation at every level to maintain stability throughout the uncertain times ahead. With topics becoming increasingly enmeshed, it is clear that broadening the focus, partnerships and perspectives involved in discussions at the Forum and beyond is not only possible but necessary.