Big banks, since the halcyon days of the Great Recession, have had a long sit in the naughty chair — widely maligned as the bad guys from Main Street to the annual World Economic forum in Davos.
But this year — though much at Davos is as it has always been (plus a few concerns about the Brexit and a heavily protectionist U.S. president) — a new villain seems to have been sent by central casting.
New to the naughty chair — big tech.
Called “corporate states” by Professor Mary Cummings from Duke University on account of their mounting power (and small accountability), tech companies took hit after hit, mostly because of their chilling effect on jobs. Former United States Secretary of State John Kerry noted in his remarks that although globalization takes a lot of blame for working class woes worldwide, the culprit is actually to be found in the fast pace of technological change.
“Trade is not to blame for job losses,” Kerry stated during his Davos appearance, before noting that automation is the actual culprit.
And the data backs up that claim — according to research out of Ball State, four out of every five jobs lost in the US have been the result of technological advances.
“I can’t wait to see how the incoming administration deals with AI [artificial intelligence],” said Mr Kerry.
Tech executives found themselves in an unfamiliar position at Davos this year — defending themselves like they ran big banks.
“Artificial intelligence is about the augmentation of people, not the replacement of people,” said Ginni Rometty, the chief executive of IBM — repeatedly. “You have to think about how you develop trust for any new technology,” she added. “There are some things that machines can do that perhaps they shouldn’t do,” conceded Satya Nadella, the chief executive of Microsoft.
Other execs, like Meg Whitman, boss of Hewlett Packard Enterprises, noted that for all of tech’s big wonders, it also brings with it big problems.
“Technology has changed everything,” she said. “It can be a huge force for good in areas such as climate change, agriculture, food, and medicine, but it has also meant changes for jobs. We need to manage technological change better. We need to understand how we got here. There is a distrust of institutions and the changes brought about by technological change…it is a far bigger cause of job losses than globalization.”
Delegates favored education as a potential solution, with many delegates talking about the need for educational overhaul.
“Skills is the issue of our time,” said IBM’s Rometty. “When I weigh the pros and cons, I believe the benefits will outweigh the downsides.”