A book review: The Technology Trap

27 November 2020 11:24

A book review: The Technology Trap

Are you interested in the economic impact of digital and AI, in particular on jobs? Read how Michael Osborne is highlighting the vulnerability of many jobs to automation in the next couple of decades.

Front cover of the book
The Technology Trap: Capital, Labor, and Power in the Age of Automation Book by Carl Benedikt Frey, ISBN: 9780691172798

Anybody interested in the economic impact of digital and AI, in particular on jobs, will want to read Carl Frey’s book, The Technology Trap: Capital, Labor and Power in the Age of Automation. He is probably best known for his rather gloomy work with Michael Osborne highlighting the vulnerability of many jobs – almost half in the US – to automation in the next couple of decades. The book expands on the issues that will determine the actual outcomes and is – as the title indicates – still quite pessimistic.

The structure of the book is historical, with sections on pre-industrial technologies, the Industrial Revolution (which saw widening inequalities), the mass production era (which reduced inequalities and created an affluent middle class), the recent polarization in the era of globalization and digital, and prospects. The key distinction Frey draws in between technologies that substitute for labor and those which complement it. Whereas the 19th century and the present seem to involve the replacement of people with machines, the 20th-century innovations needed increasingly skilled labor to work with them.

One question Frey keeps raising is: were the Luddites right? History has proved them wrong - so far. The BIG question now is whether AI will impact tasks and jobs in such a way that people will find it hard to make it back into the labor force again. Drivers, as an example, are exposed to autonomous vehicles which will leave numerous drivers (e.g., taxi drivers, bus drivers, truck drivers, etc.) unemployed. Some drivers will be asked to take on new tasks (e.g., Security on board for example school busses, or be the lead driver of a convoy of trucks) since driving is taken care of by AI. 

 

Will we be able to retrain unemployed drivers into other jobs with similar pay or will they have to take a lower-paid job? One thing is for sure: there will be a period of friction in the economy as we transition from the current economy to an economy where AI is more prevalent.

AI is by many considered a general-purpose technology transforming or impacting all parts of society. For this reason alone, we must have a qualified opinion and understanding of how AI works and how it may impact what is important to us: our jobs. Frey’s book is an excellent place to start building your understanding.

OTHER REVIEWS FROM DIG and THE HUB@NHH:

The Price of Peace

How Keynes came to realize that imperialism promoted inequality rather than spreading humanitarian values. See the review written by Tor W. Andreassen

A World Without Work

Will jobs for humans follow the same path that jobs for horses did in the early 20th century?

Competing in the Age of AI

Do you need to better understand how to manage, transform, grow and control your business in an area of virtually unbounded potential impact? Please read book review written by Professor Tor W. Andreassen.

Analytics of Life

Postdoc Le Quang’s book recommendation gives concrete ideas about how machine learning techniques and deep learning algorithms are applied in real-world situations.

Prophet of Innovation

Having read this book, one sentence came to mind: While business leaders plan for eternal life, markets are a brutal destructor of firms!