TECHNOLOGY AT WORK

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Citi GPS: Global Perspectives & Solutions February 2015
which has closed down its Spanish operations entirely. Another related obstacle to
technological deployment is found in software patent "trolls", whose claims on illdefined
patents are estimated to have directly cost firms $29 billion in 2011. 135
Predictions on the influence of technologies
yet undeveloped are difficult
In casting our minds ahead to the influence of technologies yet undeveloped, we
face the difficulties 136 associated with forecasting technological progress. These
difficulties are particularly profound in speculating about the development of
machine intelligence competitive with human labour: the field of Artificial Intelligence
(AI) has a poor record in predicting when human-level intelligence may be
algorithmically possible. Examples of unsuccessful predictions range from the
expectation that AI could be solved during a 2 month, 10 man, summer project in
Dartmouth in 1956, to AI pioneer Marvin Minsky's claim in 1970 that "in from three
to eight years we will have a machine with the general intelligence of an average
human being''. The question of when human-level AI will arrive features many
characteristics of problems that are difficult to predict. 137 Feedback on the success
of prediction is largely unavailable; the problem is difficult to decompose; and
progress in AI is, to some extent, dependent on surprising insights. Despite these
difficulties, we can, nonetheless, reasonably expect that human-level AI is not
impossibly remote. The most recent and comprehensive survey of AI experts 138
concludes that we will probably (with over 50% probability) reach overall human
ability in machine intelligence by 2040-50, and very likely (with 90% probability) by
2075.
Clearly, however, we will not need to wait for these forecasts to be tested to see the
employment impact due to intelligent machines. In particular, just as the typing pool
was replaced by word-processing software unable to understand what was being
typed, technology will continue to substitute for human labour by simplifying the task
to be performed. A recent example is found in Kiva Systems, which automated the
moving of objects around a warehouse by simplifying the navigation task: bar code
stickers were placed on the floor to inform robots of their precise location. 139 At all
stages en-route to true human-level AI, we expect to see technologies that will
radically alter the nature of work. For governments to adequately respond to these
trends, a shift in mindset, investment and policies is needed. As around 47% of jobs
are at risk of displacement by technologies that are largely already available that
shift needs to happen sooner rather than later.
Tax Wedges and Active Labour Market Policies
Ebrahim Rahbari
European & Global Economics Teams
Joe Seydl
Global Economics Team
Tax wedges — the difference between the
gross labour costs and ‘take-home pay’ —
can be very large
The fast-changing world of employment increases the risk that more and more
workers would be left behind over time, which is at the heart of some of the risks
and negative implications of the digital revolution. But there are a number of labour
market policies that could potentially limit some of those negative implications. We
can think of them in two broad categories: first, policies that reduce the cost of
labour, or, conversely increase labour income. And second, policies that make it
easier to find jobs.
We highlighted earlier in the report that the number of workers on low wages will
likely increase as a result of ‘job polarisation’ – in fact, in some countries, such as
the UK, it has already increased noticeably in recent years. If wages are already
low, it would make sense to at least make sure that most of the cost of labour ends
135 Bessen, J., & Meurer, M. J. (2014).
136 Armstrong, Sotala, and Ó hÉigeartaigh (2014).
137 Armstrong, Sotala, and Ó hÉigeartaigh (2014).
138 Müller and Bostrom (2015)
139 Guizzo, 2008.
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