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EmTech: Does IT Cost More Jobs than It Creates?

An academic says the past decade has brought mixed blessings.
October 20, 2011

Were the loom-destroying Luddites simply ahead of their time?

The traditional view holds that, overall, new technology generates at least as many jobs (and whole industries) as it displaces. But yesterday, Andrew McAfee, principal researcher at MIT’s Center for Digital Business, invoked the ongoing national protests while suggesting this may no longer be the case. At least, McAfee reported, the phenomena has not been in evidence over the past decade.

McAfee is co-author, with his colleague Erik Brynjolfsson, of the forthcoming e-book Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy. (The employment arguments will be spelled out in greater detail in that text, which comes out next Monday.) “Technology grows the overall economic pie,” McAfee said yesterday at Technology Review’s EmTech conference, but “that’s different than saying it will leave everyone unambiguously better off.”

While the 2000s ushered in a rapid expansion of e-commerce, social media, and vast improvements in computing hardware and software applications of all kinds, “the 2000s were the first decade we are aware of where net job growth was negative. The economy as a whole was a lot bigger at the end of the decade, and the population was a lot bigger, but people with jobs was not.”

McAfee added: “When I see the protests and the 99 percent, I see people saying they feel like they are being left behind. Technology is not the story, but technology progress is part of the story there.”

McAfee said recent studies suggest that the level of entrepreneurship in the United States has not diminished. “What’s changed is you can have a startup that employs fewer people than it did a decade ago. And guess what I think the culprit is?” He did not answer the question but has argued in Technology Review and elsewhere that many jobs–such as automated telephone operators and trouble-shooters, and document analysts—can now be done competently by computers. In addition, the growth of the global Internet has allowed more office jobs to be done offshore. And future technological advances promise to continue this trend.

McAfee stopped short of specifying whose looms we should smash—or that we should smash anything at all. Instead he ended on an “hugely optimistic note,” contending that “by most measures, the average American today lives better than Rockefeller did in the gilded era. The stuff we have access to would blow away those plutocrats. Our best days are ahead of us. Overall, things are going to get a lot better.”

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