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Ideas Made to Matter

Innovation

It’s time to rechart the course of technology. Here are 4 ways to start

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In 18th century Britain, technical improvements in textile production generated great wealth for factory owners but created horrible working and living conditions for textile workers, who did not see their incomes rise for almost 100 years.

Today, artificial intelligence and other digital technologies mesmerize the business elite while threatening to undermine jobs and democracy through excessive automation, massive data collection, and intrusive surveillance.

In their new book, “Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity,” MIT economists  and  decry the economic and social damage caused by the concentrated power of business and show how the tremendous computing advances of the past half century can become empowering and democratizing tools.

In this excerpt, the authors call for the development of a powerful new narrative about shared prosperity and offer four ways to rechart the course of technology so it complements human capabilities.

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Our current problems are rooted in the enormous economic, political, and social power of corporations, especially in the tech industry. The concentrated power of business undercuts shared prosperity because it limits the sharing of gains from technological change. But its most pernicious impact is via the direction of technology, which is moving excessively toward automation, surveillance, data collection, and advertising.

To regain shared prosperity, we must redirect technology, and this means activating a version of the same approach that worked more than a century ago for the Progressives.

This can start only by altering the narrative and the norms.

The necessary steps are truly fundamental. Society and its powerful gatekeepers need to stop being mesmerized by tech billionaires and their agenda. Debates on new technology ought to center not just on the brilliance of new products and algorithms but also on whether they are working for the people or against the people. Whether digital technologies should be used for automating work and empowering large companies and nondemocratic governments must not be the sole decision of a handful of entrepreneurs and engineers. One does not need to be an AI expert to have a say about the direction of progress and the future of our society forged by these technologies. One does not need to be a tech investor or venture capitalist to hold tech entrepreneurs and engineers accountable for what their inventions do.

Choices over the direction of technology should be part of the criteria that investors use for evaluating companies and their effects. Large investors can demand transparency on whether new technologies will automate work or create new tasks, whether they will monitor or empower workers, and how they will affect political discourse and other social outcomes.

These are not decisions investors should care about only because of the profits they generate. A two-tiered society with a small elite and a dwindling middle class is not a foundation for prosperity or democracy.

Nevertheless, it is possible to make digital technologies useful to humans and boost productivity so that investing in technologies that help humans can also be good business.

As with the Progressive Era reforms and redirection in the energy sector, a new narrative is critical for building countervailing powers in the digital age. Such a narrative and public pressure can trigger more responsible behavior among some decision makers.

For example, managers with business-school educations tend to reduce wages and cut labor costs, presumably because of the lingering influence of the Friedman doctrine — the idea that the only purpose and responsibility of business is to make profits.

A powerful new narrative about shared prosperity can be a counterweight, influencing the priorities of some managers and even swaying the prevailing paradigm in business schools. Equally, it can help reshape the thinking of tens of thousands of bright young people wishing to work in the tech sector — even if it is unlikely to have much impact on tech tycoons.

More fundamentally, these efforts must formulate and support specific policies to rechart the course of technology. Digital technologies can complement humans by:

  • Improving the productivity of workers in their current jobs.
  • Creating new tasks with the help of machine intelligence augmenting human capabilities.
  • Providing better, more usable information for human decision-making.
  • Building new platforms that bring together people with different skills and needs.

For example, digital and AI technologies can increase effectiveness of classroom instruction by providing new tools and better information to teachers. They can enable personalized instruction by identifying in real time areas of difficulty or strength for each student, thus generating a plethora of new, productive tasks for teachers. They can also build platforms that bring teachers and teaching resources more effectively together. Similar avenues are open in health care, entertainment, and production work.

An approach that complements workers, rather than sidelining and attempting to eliminate them, is more likely when diverse human skills, based on the situational and social aspects of human cognition, are recognized. Yet such diverse objectives for technological change necessitate a plurality of innovation strategies, and they become less likely to be realized when a few tech firms dominate the future of technology.

Diverse innovation strategies are also important because automation is not harmful in and of itself. Technologies that replace tasks performed by people with machines and algorithms are as old as industry itself, and they will continue to be part of our future. Similarly, data collection is not bad per se, but it becomes inconsistent both with shared prosperity and democratic governance when it is centralized in the hands of unaccountable companies and governments that use these data to disempower people.

The problem is an unbalanced portfolio of innovations that excessively prioritize automation and surveillance, failing to create new tasks and opportunities for workers. Redirecting technology need not involve the blocking of automation or banning data collection; it can instead encourage the development of technologies that complement and help human capabilities.

Society and government must work together to achieve this objective. Pressure from civil society, as in the case of successful major reforms of the past, is key. Government regulation and incentives are critical too, as they were in the case of energy.

However, the government cannot be the nerve center of innovation, and bureaucrats are not going to design algorithms or come up with new products. What is needed is the right institutional framework and incentives shaped by government policies, bolstered by a constructive narrative, to induce the private sector to move away from excessive automation and surveillance and toward more worker-friendly technologies.

From “Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity,” by Daron Acemoglu and Simon Johnson. © 2023 PublicAffairs, a member of the Hachette Book Group.

For more info Tracy Mayor Senior Associate Director, Editorial (617) 253-0065