Remote intelligence will be with us before artificial intelligence concludes Richard Baldwin in his book "The Great Convergence".

2017-01-03 21:28:25

Remote intelligence will be with us before artificial intelligence concludes Richard Baldwin in his book "The Great Convergence".

He proposes this future by explaining the present state of global trade in terms of three "separation costs"; transport, knowledge, and people. Transport costs fell with steam about 1820 and shaped the G7 countries as we see them now. Their share of world income diverged from the rest until 1990 when there has been a convergence instead. The graph is striking and explains the great reduction in worĺd poverty in recent decades. The trigger for this convergence was the reduction of the second separation cost of transfer of knowledge. Modern communication technologies make it possible to coordinate manufacturing across international borders, splitting up factories into separate stages of production. With it comes the opportunity to reduce costs with cheaper labour. We know it as offshoring and Baldwin explains the forces and logic within this global value chain revolution. My views on globalization have changed considerably with reading this account.

He goes on to describe what may happen if transport of people costs fall or are made irrelevant with telepresence and telerobotics. There will be a continued disruption of technology with computers assisting those with high skills to do their work but replacing middle and some low skilled jobs.

Governments need to rapidly adjust their policies for the new facts of globalization. Protectionism as threatened by Trump is the wrong answer - those jobs will disappear anyhow. Supporting workers not just their (old) jobs is required. We need more 21st Century skills, working with technology to improve productivity, being part of global value chains, sharing the gains and pains of globalization. This last point - sharing the gains - is something we should take heed of in the UK. The working class vote for Brexit was perhaps led by fear of change and loss of jobs in old industries - a lack of control. Those jobs are going anyway so it is we who have to change and integrate with those overseas. The best places to start are with those who are nearby and already have established cross-border manufacturing processes. Like the EU for example!

Brexit and Trump, I feel have come about because of inequalities in our societies. Inequalities within our countries because the gains of progress have not been shared evenly enough in society. We have lost social capital and become protectionist, inward looking, nationalist, and just a little bit Luddite. Look where it got them.

At his most speculative Bladwin imagines a highly skilled worker in, say the UK, maintaining a machine in a labour-intensive manufacturing stage in a developing country, whilst their garden is being looked after by machines controlled by workers in yet another country. A globalized economy with national borders as well as global value chain technology boundaries.

Service industries are perhaps the nearest to being disrupted. Telepresence could rapidly change those offices in expensive areas, filled with expensive workers, who hold lots of "meetings" so that they get to work better together. Look out publishing. The editorial offices may disappear just as the print shop did.

The book is short but clear. It even manages to be somewhat repetative as though it were a series of workshops strung into a book. However, this was good for me being a rank amateur in economics.

Source: www.amazon.co.uk

jobs globalization convergence costs manufacturing transport gains global

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Remote intelligence will be with us before artificial intelligence concludes Richard Baldwin in his book "The Great Convergence".

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