Tom Watson: Speech to Changeboard Future Challenge Conference

As you all know, I’m a Labour politician and deputy leader of my party. But I’m not here today because I’m politician. Or not only for that reason. 

In fact, I’m here because I’m a former member of the Hull University Rugby Club. Our most accomplished player was Porteur Keane, founder of the Change Board organisation. It was Porteur who asked me to be here today. So Porteur, and Jim, thanks for asking me to speak.

But I know why you really invited me. And that’s because I’m a nerd.

That’s the real reason I’m here. I was the first MP to blog. I was the first Minister for Digital Engagement, under Gordon Brown. I had an iPod when digitising your music library involved spending at least two days burning your CD collection onto iTunes. The point is – I’m instinctively positive about technology and the opportunities it creates.

So when it comes to robots, artificial intelligence, big data – the conglomeration of change that’s been dubbed the Fourth Industrial Revolution – I honestly can’t wait to see it unfold. I can’t wait to see what we humans invent next.

But I also know there can be a downside to technological innovation, especially in the short-term. History shows there is usually a human price to pay for rapid industrial change. The last industrial revolution ushered in the age of the railways, bringing towns and cities closer together and creating new industries and new jobs. It changed our great conurbations forever in ways that are still visible today.

A combination of private enterprise and municipal know-how created new buildings, civic spaces, libraries and universities. But industrialisation also caused a dramatic rise in the urban population. Overcrowding, poverty and hardship became synonymous with the great Victorian cities that grew wealthy on the back of these new industries and trades. Next to every new chimney stack, a slum and in every factory, children who had no choice but to work.

It was only through the intervention of the state, often working hand in hand with social reformers and enlightened industrialists, that the excesses of the industrial age were reined in. The point I’m making is that we can’t stand in the way of change, but we can manage it.

The same is true of the technological revolution that is underway today. The gains of automation are potentially huge, but the downsides cannot not be under-estimated. Many of you in this room will be familiar with a 2015 Bank of America report that warned up to 35 per cent of British workers were at risk of “displacement” by technology over the next 20 years.

Just last week, research from PricewaterhouseCoopers echoed those figures – it said 30 percent of job will be put at risk by the 2030s. And in some sectors – like manufacturing, wholesale and retail – PwC said the figure is more likely to be fifty percent.

Other estimates are less apocalyptic. But even the most conservative forecasts say millions of manufacturing jobs are likely to disappear worldwide and that entire professions are likely to be rendered obsolete.

This is not just about robots assembling cars. A recently invented robot radiographer analyses x-rays more accurately and efficiently than its human counterparts. That’s good news for everyone – apart from radiographers.

Stanford academic Jerry Kaplan has said that automation is ‘blind to the colour of your collar’. For the first time last year, more Americans filed their tax returns using computer software than an accountant. Middle class professionals in conveyancing or law face redundancy by algorithm.

Some of the potential applications of new technology sound like they’ve been lifted straight from the pages of a dystopian sci-fi novel. On Wednesday I read that South African tech billionaire Elon Musk plans to implant electrodes into human brains and connect them to computers. Musk believes this might be the only way to ensure we aren’t left behind by advances in artificial intelligence that will make robots infinitely more powerful than humans.

That may sound far-fetched, but in one sense, technology is already merging man and machine. Monitoring devices mean that for many delivery drivers, every journey is tracked and every route mapped out. They are unable to choose their own without running the risk of being censured by management.

Driverless cars may render that a problem of the past, of course, assuming Uber and other manufactures iron out the teething problems that caused one car to crash dramatically in Arizona this week.

The American Trucking Association says there are currently 3.5million truck drivers in America. They could all be out of a job in a generation’s time – along with the people who own or run the roadside cafes that cater to them.

And if drones deliver as many goods in the future as vehicles do today, it could be that entire fleets of driverless delivery vans disappear a few years after they’ve become a familiar site on our roads.

Daniel Susskind, a member of our Future of Work Commission, and his father Richard have argued that it’s the traditional professions which will bear the immediate impact of the rise of the machines. Doctors, lawyers, pharmacists, engineers, academics, managers. Why will we need a GP, when a robot can read precisely the complexities of our physiologies and prescribe, manufacture and distribute the exact blends of medications we need?

Why pay an accountant to do your taxes or run your accounts, when a personalised software package can do it for you? We know that the roles of engineers and architects will change, as computer-aided engineering systems create, and test prototypes within seconds.

It’s possible that in 50 years, even management consultancy won’t exist as a profession. So it’s not all bad news.

And so the question for us today, is how to master this change, how to avoid the fate of previous generations, how to make change our ally, not our foe. We can’t predict with any certainty what changes automation will usher in, or how quickly they will take effect. But I would argue that we can be reasonably sure about the impact it will have on our economy and our society.

My fear is that the digital revolution of the last twenty years, which concentrated power and wealth in the hands of a few – many of them in Silicon Valley – could be repeated on a far larger scale when automation and artificial intelligence become commonplace.

The behemoths of the digital age – Apple, Google, Facebook – make many billions in profits, but employ a tiny number of people compared to the industrial giants of the past. Ford employs around 200,000 people worldwide. It has a market value of just over $45 billion. Snapchat, which is currently valued at $25 billion, has fewer than four hundred. Uber employs an army of drivers, but it enriches a tiny number of San Franisco based executives, along with the handful of investors who own the company.

The risk is the widespread adoption of automation and artificial intelligence creates a ‘winner takes all’ economy in which the gains accumulate to those who create or own technology, but the financial losses are borne by the people who lose their jobs – or have to work for less money.

We’ve seen that over the last 20 years with globalisation. Globalisation has done wonders for economic growth, but not everyone has seen the benefits. That's one reason why people have voted for change recently - and not always for the kind of change that I, as a politician of the left, would welcome.

The Prime Minister finally triggered article 50 yesterday. In this country, many people who felt the system wasn't working for them voted for Brexit. In the United States, many people who felt the system wasn't working voted for Donald Trump.

We have to ensure that the benefits of technological change are enjoyed by everyone – not just a privileged few.

Our society is starting to resemble an hour-glass, with room at the top for those with existing wealth and access to capital, and a wide, flat base of lower paid jobs. There is hollowing out of the middle — the jobs in retail, or high street banking for example. A society of affluent leaders, and struggling workers, but little room in the middle and few chances for movement.

There are too many people who think they are powerless to act. They wrap their powerlessness up in economic and political libertarianism, and pray to the gods of the free market, and hope for the best. They eschew any role for government, reject any notion of an Industrial Strategy, or support for companies to innovate and grow. Some of those who hold this view even serve as Ministers of the Crown.  

I have a different view. A very different view. There is a fundamental distinction I would like to draw, between the interests of Business and the interests of Capital. Enterprise and hard work grow businesses that become employers, and contribute to the fabric of society in many ways, social and cultural, as well as through taxation.

Capital is a necessary element in economic activity, but slavish devotion to the re-creation of money for money’s sake will lead to a very dislocated and dysfunctional society when automated systems are doing most of the work. We need to concentrate on how we grow an economy in which the value created and time saved by automation is shared more equally, and not used to enrich an already very wealthy and powerful elite.

One of my predecessors, Jennie Lee, the first ever Minister for the Arts, was responsible for the first ever Arts White Paper in 1965. She was interested in automation too. She wrote that "in an age of increasing automation bringing more leisure to more people than ever before, both young and old will increasingly need the stimulus and refreshment that the arts can bring".

The fear then was that automation would lead to so much leisure time that people wouldn’t have enough to do. The fear now is that it will put people out of work. The opportunities for leisure and cultural enrichment are enormous with all the time saved through automation, but will be lost if the fundamental model of the economy is not changed.

Here is a lesson my party needs to learn. I am determined to make sure we do. Labour needs to be on the side of the ownermanaged business, the small and medium sized enterprises that form the lifeblood of the real economy, and mean it.

Just as the great capitalists of the last industrial revolution realised they needed to build homes and provide healthcare to their workers, so too will the business owners of the future have to adapt to a world where productivity is dramatically improved through automation. And they’ll need the empowering state by their side, in partnership, to deal with the challenges.

That’s why I set up a Future of Work Commission last year to examine the effects of the Fourth Industrial revolution on the workplace. It will help the Labour party assess what the future public policy challenges. I hope it will allow policy makers to make informed decision based on the latest available evidence.

My co-chair Helen Mountfield QC is a high court judge and expert in employment and public law. Other commissioners include Harvard University’s professor of Government Theory Michael Sandel; Naomi Climer, former president of the Institute of Engineering and Technology; Claire McCarthy, general secretary of the Cooperative Party and Daniel Susskind, who I mentioned earlier.

We’re halfway through the process of gathering evidence. It’s been a fascinating experience. We heard recently about the new tracking technology used in many warehouses. Watch-scanners monitor how long employees take in the loo, or whether they've stopped to talk to another worker. Algorithms set targets for people to meet, regardless of age, or ability. And computer programs decide how best to meet those targets, deciding routes and planning schedules.

Computers – not even very clever ones – are doing away with meaningful choice on the part of the worker. Like the delivery drivers I mentioned, who are reluctant to choose the quickest route because their journeys are monitored by tracking devices. They are extracting every last drop of effort from workers in a way that hasn’t previously been possible. It’s intrusive, and it’s dehumanising. It may be good for productivity. But it’s bad for job satisfaction and bad for mental health.

As I said at the start of this speech, I am instinctively optimistic about technology. It is worth remembering that the authors of the Bank of America report I mentioned pointed out that humans have always nearly always benefited from technological advances. In its own work on automation, consultancy firm Deloitte pointed out that technology has historically created more jobs than it destroyed.

But to harness the benefits we may need to fundamentally overhaul how we educate our children. When my young daughter was born less than a decade ago, I expected her to learn how to write code at school. But now it is computers, rather than humans who are writing code. 

The pace of change is so rapid that we may need to teach children new ways of learning as well as giving them the knowledge they need to get on in life. If the machines of the future are carrying out many of the jobs humans do today, it could be that schools need to teach collaborative working or team building skills.

It could be that there needs to be a greater emphasis on emotional intelligence as well as learning by rote. We may need to measure and test our children differently and more effectively. And it seems certain that in a world where work is changing rapidly and in unpredictable ways, lifelong learning is something most advanced countries will have to introduce on a far bigger scale.

Schools and universities need to turn out resilient, adaptable individuals for this new world; lifelong learners who can cope with change and are happy returning to education to re-skill. We need to develop pupils’ creativity and emotional intelligence, because those are hard to automate, they're key human skills. 

The Commission has also heard about how Artificial Intelligence could transform education. One witness told us about how an AI system could accurately monitor students’ progress, recognise their achievements and where they need extra help in a way our current system will never be able to. And not just that, but how it could connect with the jobs market to identify skills gaps – how it could then tailor students’ education and training to produce workers who meet those gaps.

We heard the biggest obstacle to making that kind of agile responsive system a reality isn't money, but is the hearts and minds of teachers, pupils and parents.Because it would involve interaction with technology – data collection – on a massive scale, and people are very wary about that. That UK hasn't – yet – had a big public conversation about technology.

About how we regulate it, what we want it to do, what we’ll allow – and what we won’t allow. We need to do that.

Currently we’re dealing with things piecemeal, but soon that’s not going to be good enough. Because the rate of innovation – and here I’m quoting from that Bank of America report – ‘has gone from linear to parabolic’.

Our existing systems just won’t be able to absorb change at that pace. There are going to be more new business models that use new technology – like Uber, and Amazon, and Upwork – and that challenge and sidestep existing employment law.

Driverless vehicles aren’t just going to slot neatly into existing car safety regulations. Our tax system is going to come under strain. What do we do when a robot starts doing the job a human previously earned 40k for doing? Do we tax that robot? Bill Gates thinks we should – and then use that money to retrain the displaced person. I’m not persuaded by that particular argument, but I am persuaded that he’s doing the right thing – identifying problems, and considering radical solutions.

The only way to allay anxiety about these and many other changes – and in so doing to allow them to reach their full potential – is to set out a persuasive, evidence-based, positive vision for the future and the future of work. Being who I am, I am evidently not going to attempt to stand in the way of progress. But I do believe in choosing what counts as progress.

The public need to be reassured that technology can be - that is going to be - used in ways that benefit us all. That is what the Future of Work Commission is aiming to do. I know your conference is concentrating on the fourth industrial revolution next year. I’d love to come back then and discuss its recommendations with you. 

Automation has the potential to liberate us from the more mundane aspects of work. It could mean many of us can spend less time doing jobs we don’t like. It could make the gains that have historically accrued to the few available to the many. 

It could mean wealth and opportunity are shared and toil is reduced. It could, in short, lead to a fairer, healthier, more informed, and kinder society.

That’s the sort of society which Labour was founded to help create. Thank you