The Globotics Upheaval: Globalisation, Robotics, and the Future of Work

By Richard Baldwin

Globalisation guru Richard Baldwin’s earlier book on the Great Convergence was especially good on how global value chains offer new opportunities in manufacturing for developing countries. This is because IT enables companies to share expertise and management across large distances, so that they can benefit simultaneously from the high skills in rich countries and the low wages in poor ones. Thus, competition between Honda, say, and BMW, is not between Japan and Germany, but a global tussle between the Honda-led Global Value Chain and the BMW-led Global Value Chain.

Baldwin’s new book on The Globotics Upheaval: Globalisation, Robotics, and the Future of Work, deals with the world of services, and is mainly focused on developed countries. Its messages for developing countries are more ambivalent than in the previous book: on the one hand, new openings in the field of ‘telemigration’, delivering services remotely; on the other, a general threat to employment associated with robotisation and re-shoring.

In one sentence, the argument of the book is that a tsunami of job losses is coming in developed country services, triggered by explosive growth in Remote Intelligence (RI) and Artificial Intelligence (AI). Telemigration is a new phase of globalisation: ‘an international talent tidal wave coming for the good, stable jobs that have been the foundation of middle-class prosperity in the US and Europe’. In addition, the same jobs are facing new competition from ‘remote intelligence’: white-collar robots offer zero-wage competition from thinking computers – specifically to white collar, service sector and professional jobs. ‘RI and AI’, Baldwin says, ‘are coming for the same jobs, at the same time, and driven by the same digital technologies’. The size of the challenge is because globalisation and automation are happening at the same time: ‘globalisation and robotics are now Siamese twins, - driven by the same technology and at the same pace’. This is ‘globotics’ – the combination of Remote intelligence (RI) and Artificial Intelligence (AI) – advancing at ‘explosive pace’: estimates of job displacement range from big (10%) to enormous (60%).

The key drivers of explosive change and ‘holy cow’ moments are: (a) Moore’s Law (processing speed doubles every 18 months); (b) Gilder’s Law (data transmission rates grow three times faster than computer power (which turned out to be an overestimate)); (c) Metcalf’s Law (being connected to a network grows more valuable as the network grows); and (d) Varian’s Law (disruption happens when different elements combine together – digital products made of free components are often insanely valuable). A ‘holy cow’ moment is when you suddenly realise, for example, how much your smart phone can do, compared to five years ago, and how indispensable it has become.

Telemigration is one outcome of new technology: highly competitive, and giving access to a huge pool of talent. It is facilitated by new online platforms, like Slack, Yammer, GitHub and Box. So far, most telemigrants are English-speaking (India, Philippines), but machine translation has improved enormously and is leading to a ‘talent tsunami’. The quality of interactions is transformed by augmented reality and new techniques, like projecting holograms, using telepresence robots, and new collaborative software (replacing email). This leads to the ‘dissolving office’ and creation of a new ‘liquid workforce’.

The development of white collar robots is the other transformation: Robotic Process Automation (RPA), operating for both routine tasks and at high level, for example in legal offices. These new machines eliminate tasks and jobs, not occupations, because robots can’t (yet!) handle all human skills (e.g. natural language understanding, creativity, social and emotional reasoning, social and emotional sensing). Still, there is significant concern for:  office jobs; sales in retail; construction; security guards; food preparation; transport; healthcare; pharmacies; journalism; legal; finance. Robots like Amelia, Erica, Nadia and Nia are increasingly managing the interface between clients and organisations, including in public service delivery.

New jobs will of course be created: working with white collar robots on difficult cases; new industries which exploit free services; re-shoring of back office jobs. Nevertheless, it is not obvious that new jobs will be created fast enough to replace all these.

More important, change itself is highly disruptive. The evidence of history shows that change has four steps: transformation, upheaval, backlash and resolution. These phases can be tracked in the industrial revolution of the nineteenth and twentieth centuries, and the services transformation, which kicked off at the end of the twentieth century, with a shift ‘from things to thoughts’.  Baldwin reviews each of these at length.

This time round, change does not come at identifiable moments, like with a plant closure. It infiltrates, like incremental upgrades to the iPhone, until something really radical has happened. So, we should look not for the ‘Jonesville moment’ but the ‘iphone infiltration’.

Either way, many think job displacement is coming too fast for the economy to absorb and if left unchecked will cause economic, social and political upheaval. In fact, job displacement is by design:  ’job destruction is the business model’. ‘The sad reality is that it is a lot easier and faster to make money by eliminating jobs than it is to make money by creating jobs’.

Those affected will regard the extent and speed of change as deeply unfair, leading to outrage. Globots will undermine the implicit social solidarity, leading to anomie, building cumulative disadvantage between those who are not affected and those who are. The backlash will unite disparate groups and interests, in particular attacking large data companies. There will be (is) a populist surge, calling for ‘shelterism’, e.g. regulations to stop displacement, limits on free movement of labour (in Europe, the Posted Workers Directive), or labour market regulation to e.g. make it harder to sack people. In this connection, there are 38 references to  President Trump, and 14 to Brexit.

In the best outcome, managed well, the globotics resolution will mean a more human, more local future, where humanity has an edge. Some activities will naturally be sheltered from the globotics revolution: where humanity has an edge in soft skills, and where physical proximity is required, so that telemigration is not an option: managing people looks safe, as do care-giving, social services, scientific research, most education, most professions, the arts.

In preparing for the new world, ‘get more skills’ is too blunt. Instead, there are three rules: first, seek jobs that do not compete directly with white collar robots; second, build soft skills that allow you to avoid direct competition with RIRevenue Inspector and AI; third, realise that humanity is an edge not a handicap.

Baldwin argues that it will be important to protect workers not jobs. He admires policies which support workers through long periods of unemployment and also provide constant retraining. Right at the end of the book, however, he also flirts with shelterism:

‘Things are moving much faster this time. My guess is that it will all work out well in the long run, but only if we make sure globotics advances at a human pace, and the disruption can be seen by many as a decent development. This is why it is critical to realize that the pace of progress is not set by some abstract law of nature. We can control the speed of disruption; we have the tools. It’s our choice’.

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It will not be surprising to learn that I enjoyed this book. It engages with two of the three heads of Cerberus, globalisation and automation. The writing is lively. Who knew, for example, that a year’s worth of internet traffic would amount to 1.2 zettabytes, and, if stored on DVD, would require a pile 80 times as high as the distance from the earth to the sun. And that was in 2016. The core argument seems sound, that work is already being transformed by new technology, and will be further: Baldwin is appropriately cautious about the precise timing and impact, but certain that change will come. He is also surely right to say that there can be no certainty that new jobs will be created at the right speed and in the right places to replace lost tasks or jobs. And in arguing that disruption will cause, is causing, political upheaval, ‘putting the ‘rage’ into ‘outrage’’, and creating unexpected alliances of activists. The historical analysis is a useful reminder that we have been here before, albeit perhaps at slower speed. When I lecture on Cerberus, I usually end with E.P. Thompson’s The Making of the English Working Class, which is about how worker rights and welfare became central during the first of Baldwin’s great transformations.

There are gaps. It is a pity that there is not more on the third head of Cerberus, climate change. There is more to new technology than ICT: medical advances, materials science, agricultural research, many others, may also be disruptive. It would have been good to explore more who will be making all the new robots. And it really would have been good to think through more the implications for different kinds of developing country.

The biggest beef, however, is that the policy cupboard is almost bare. Surely, Baldwin can do better than a few platitudes about training people in soft skills, better than an unresolved flirtation with ‘shelterism’ and the need to slow the pace of change. Many others are grappling with the problems he identifies, including not just the problem of professions, but also the problems of place. For the UK, the recent report of the IPPR Commission on Economic Justice is a good example, with 67 recommendations in 10 different policy areas, ranging from a new definition of the ‘good economy’ to an active industrial policy and a new approach to taxation. On the specific topic of the book, the report of ‘Pathways for Prosperity: Commission on Technology and Inclusive Development’ identifies five different pathways for developing countries, including in agriculture (and is incidentally critical of job loss figures). The World Development Report for 2019 was on the Changing Nature of Work, emphasising the need for countries to be ready for digital. Shanta Devarajan, involved in both reports, stresses the shared optimism of their conclusions.