The Great Decoupling is best illustrated by an economic chart comparing productivity to total employment and increase in wages. Since the 1940s these lines tracked each other showing continuous growth in productivity, employment, and increasing wages. These increases fueled the idea that advances in technology lead to increased productivity and employment while also distributing the increase in wealth to everyone throughout the economy. However, in the early 2000s the lines began deviate showing unprecedented growth in productivity, declining total employment, and declining wages. This separation or decoupling is thought to be caused by increasing technological advancements, or robots replacing people. It seems that digital processes in particular are responsible for killing jobs. Examples of this are seen in automated phone systems and online retail sales.
Advancing automation has even breached the ‘knowledge work’ industries. Knowledge work is defined by the ability to make decisions, is mental not manual, and generally requires at least an undergraduate degree. However, advances in Artificial Intelligence (AI) have allowed this faction of the labor market to be infiltrated. For example, some banks now allow algorithms to decide whether or not a person qualifies for a loan, taking human judgement completely out of the process. This challenge is not only affecting the United States. Other developed countries are also seeing this trend over the last few decades. This trend has led to a shortage of highly skilled workers and an abundance of unemployed and underemployed workers.
Don’t panic though. This theory is a notable one, but is just that…a theory. There are still areas in which human labor is superior to any machine, algorithm, code, or robot.
Machines cannot be creative.
Robots cannot empathize.
Algorithms cannot coach, lead, or motivate.
Coding cannot create a relationship.
And no available technology can move or react the way a person can.
Machines simply follow the codes or orders they are given. Instead, entrepreneurs need to focus on how to augment their workforce to create symbiosis between man and machine. Only through collaboration will we move through this Second Machine Age unscathed. Use technology as a tool, not as the end game.
Harvard Business Review. Spotlight On Man and Machine. The Great Decoupling. June 2015. Pg 69.