 On jobs and the Fourth Industrial Revolution, my name is Sadia Zahidi. I manage the forum's work on education, gender, and employment. Welcome. Welcome also to our two speakers today. Eric Brynjofsen is director of the MIT Initiative on the Digital Economy at MIT Sloan School of Management and co-author of The Second Machine Age. And Suzanne Fortier is principal and vice chancellor of McGill University in Canada. Welcome to both of you. This is a topic that has generated a lot of debate over the last year and certainly here at Davos. And I think we're all keen to understand where things might be heading and also keen to understand how we should react to it, how we should adapt, what we should be doing to ensure that we can manage this transition that's underway. There's a lot of very different views on what the impact of technology will be on jobs and of course how that will interact with so many other trends that are underway, whether that's aging or migration or climate change, some of these other big changes that are happening in the world. Some of the data is quite negative. So there are predictions that up to 47% of jobs may be automated away. Others are more nuanced. There are predictions that say it's probably only about 9%, but either way we are in the midst of a transition. Some of the World Economic Forum's own work has found that regardless of whether the jobs disappear or not, even those that are here to stay, at least 30% of the core skills that are required for them, on average, will be completely different in just three years time by 2020. So the pace of change has certainly accelerated even for jobs that remain. So we're going to try to find out today where the truth lies, whether we know what some of the forecasts really mean. And to kick us off, Eric, give us the tour of both the good news and the bad news and where you think things will head in the next three to five years and then into the long future. Sure. Sadia, well, as you said, there's been a real sea change in the public discussion, especially here in Davos and in the World Economic Forum about how we're thinking about this. Two or three years ago, we were relatively lonely voices when we started talking about self-driving cars. People thought we were a little wacky and it was sort of science fiction-y. But now, of course, we see them increasingly driving around the streets in Boston, Singapore, Pittsburgh elsewhere. And the machine learning revolution has really kicked in. There was hype in previous waves, but now machines really are beginning to able to see better than humans can read street signs, diagnose cancer from medical images, understand speech almost as well. Really, all five senses are beginning to have systems that are very good at it and do more and more analytical reasoning. And it's because of a revolution in machine learning, especially this category of deep learning and deep neural nets, where the machines absorb lots and lots of data and then on their own make inferences and start understanding how to process that. And that is allowing them to affect many, many more kinds of jobs. Mostly, I think this is good news. You asked for the good news. I think it's having been a ways of helping our health care and really creating literally billions and billions of dollars of demonstrable value in many, many businesses. And I think it'll be trillions of dollars going forward. One of the biggest revolutions in human history. But it's not all good news. And the other reason people are talking about it is not because of these wondrous technological developments, but it's because of the political backlash that we've seen, because many people are not participating in this revolution. The reality is that there's no economic law that says that everyone's going to benefit from a technological advance. It's possible for some people, even a majority of people, to be left behind. Through most of history, that's not what happened. But in the past revolution, especially the past 10, 20 years, there have been so many people left behind. The shocking statistics are that the median income, the person at the 50th percentile in the United States and other countries, is lower now than it was 15 years ago. And furthermore, over 80%, according to a recent McKinsey study, over 80% of households have not seen any real income gains. And so you can understand why they feel upset. They feel disillusioned. They feel angry. And some of the election results show that they want to change. They don't feel the system is working for them. Now, there's a lot of other forces that work there. I don't want to pin that all on the fourth industrial revolution or the second machine age. But my own view is the core of it is that there's a tectonic change happening in the underlying technology of our economy. And that's playing out in terms of the economics, the kinds of jobs that can be affected. I actually think it's less a matter of the employment levels, despite some of those numbers that you mentioned. And it shows up more in wages and stagnating compensation. That's the nature of actually a well-functioning economic system when demand falls for any input, whether it's horses or humans, you tend to see lower prices first or lower wages. But people aren't happy when they see that. And ultimately, I'm sure we'll get into this in discussion, we're going to have to rethink some of our educational policies and some of our other policies, so we do have shared prosperity. Great. Thank you, Eric. Suzanne, let's stick with the forecast. What do you think will happen in the next five years, in particular, and then out into the longer future? Well, I think our radars are really giving us the right signal. We're going to see quite a large number of jobs disappearing or changing significantly, obviously, lower-skills job initially. But with the increased capacity of a sensorial capacity of many of the algorithms right now, we're going to see even a higher-skill job in the future disappearing. I think our radars have been giving us the right signals, at least for the short term. And maybe what is most surprising is that we haven't acted as rapidly as we should have, because we certainly could see it coming. I had the opportunity last summer to visit the car plant, the BMW. And it's impressive to see all the robotics. And of course, all the jobs have changed there in the car industry. So we knew that, that it was coming. I think we're fairly good at predicting three, four, five years ahead. It's the long term that is really the tough one for me. Tell us a little bit about the long term. Well, I think I'm the head of a university. We have students arriving at our university. They'll graduate in four years for their first degree. So five years is a short, short term for me. What I need to think about is what is the learning experience they must have to be prepared for the world ahead, a world that we cannot even predict yet. So it's not a matter for us to have students who are job-ready. They have to be future-ready. And we need to think about that, because it is going to be part of their lives. So if you were to think about a change that you would want to make looking out into the future at your university, or what you would broadly recommend to institutions of higher education, what would that be? Well, what I think we're doing and what many universities are doing is including different modes of learning experience. And it is important to have some modes that are really in deep, deep learning for our students, deep reflection, modes that nurture their creativity, entrepreneurial innovation. But it is also important, and our students demand that today, that they have the ability to use right from day one what they're learning. And that is often what triggers their own creativity and innovation. So it is a matter of integrating different modes of learning and putting them also in that digital world of the future, which is now in our campuses, in our laboratories, the Fort Industrial Revolution is not tomorrow. It is in the laboratories of our university. We can show students what it looks like. Okay, so that's universities. Not everyone goes to university. And of course, Eric, you already mentioned lifelong learning. So how do we need to put in place broader reforms to education systems and who needs to do it? Yeah, I think we certainly need greater investment in education, but more fundamentally, we need to reinvent how education is done. The sad reality is much of our education today, and I speak as an educator myself, is really geared towards an industrial economy. We have people sit in rows of desks quietly and say, please follow the instructions. Don't get out of sync with everyone else. Memorize these facts, but let's face it, following instructions, memorizing facts, that's what machines do well. What humans have a comparative advantage in is in a couple of areas, let me highlight them. One is in creativity and thinking outside of the box, large-scale problem solving. And the second is in interpersonal relations, emotional intelligence, connecting with other people. Right now our universities don't do much to foster those. I think they are teachable skills, teamwork. We certainly try to teach creativity and entrepreneurship at MIT. We also have something called Charm School. I don't know how well it works to try to teach some of the interpersonal skills. We need it, we certainly do. So I think that there's gonna have to be a reinvention. And actually I think that machine learning and artificial intelligence can help with this. We can develop skills maps of the kinds of skills that are in the economy today, the kinds that are being demanded by employers that we think will be demanded going forward, and a mapping from one to the other so that we can do that. And machine learning can help speed that up. We're talking to some of the people like Andrew Wang and Sebastian Thrun that have developed the leading courses in these areas or programs in these areas. And they think we can get a 5x or 10x improvement in shifting the skill mix in the economy. So who is doing some of these changes? And this is to both of you. Who is putting in place these changes and how do they need to be collaborating with each other? Suzanne, do you wanna start? Yes, I will say on our university campus, and I think in many university campuses, the students are doing these changes. They are themselves reinventing the way that they have a learning experience on our campuses. They are taking an active role in their own learning. I see students all the time launching all sorts of initiatives in social innovation, for example, in participating in the life of the community, locally and globally. I see them arranging their curriculum so that they can have different types of activities. And so they are themselves doing it. And I think inspiring us, I must say, to think about the changes that we must bring to our learning environment. And one thing I would add, and I see that almost all students I see, they are seeking mentorships. They want to see people, they're bright enough to know that they've got a lot to learn. And so they're seeking people from other generations to be mentors. They integrate themself into networks of diverse people. It's coming from them. I'm constantly amazed about how in a way, aware they are of what it is they need for the future. So that's great. That gives us a lot of hope for the future in the next generation. But there are three billion plus people that are already part of the world's workforce. So Eric, could you talk a little bit about what type of adult training and skilling systems need to be put in place? And again, who needs to do it? Sure. And I agree very much with Suzanne that you see this demand pull from the students, but there's two other groups that are really falling dramatically short. And those are governments and companies. Data, there's recently a study by the National Bureau of Economic Research that showed that a 10% increase in education investment led to more than a 10% increase in the lifelong wages of people. And there's uplift was especially high at the low end of the scale. So there's a huge return on investment from this. But unfortunately, governments aren't making the kinds of investment. They aren't doing the reinvention. And businesses, a lot of them, but frankly, are free riding. They figure, well, if we invest in reeducation and training our workforce, then that employee will leave and go elsewhere. But I want to ask them the question, you know what's even worse than that? What if you don't invest in them and then they end up staying? Then you have a mismatched workforce. So you've got to make the investments and we need to have a way of coordinating and partnerships for doing this. As you mentioned, there are billions of people around the globe that potentially can get access to these systems. And the way I think we're going to do it is with the digital technologies. Almost everyone has a mobile phone now. I was just hearing from one of the other sessions here in Davos that even 70% of the refugees, they have mobile phones. So this can be a device for reaching out to people not just with static one-way lectures that people listen to, although those can be valuable, but with a true coaching and dialogue and interaction. And as people develop curricula that are based on this new kind of platform, we can at very low marginal cost reach a much larger set of the world's population. That's great, Dan. So we've talked a bit about skilling, about education. What about some of the other policy changes that need to be put in place? Do we need to be planning for a future where people will have less work and how will we then ensure that everybody is able to fulfill their potential, is able to live? Yeah. Well, I think we have to plan for a future where people will live very long lives. We're talking now about living to a 100-year-old. A future where study, work, leisure will be blended. It will be a blended environment of those three types of activities. We have to plan for a future where we provide people with what they need or people are able to provide themself what they will need for this long life that will be one that will challenge them in some ways to lead a productive, a contributing life for the very long term. So we need to think about not only the changes in jobs, but longevity as well, which is, I think, coming. So there's a big challenge in front of us, I think. But in many ways also, I think this is a very optimistic view of our future, but of course, and I think Eric has talked about that quite a bit, what I'm describing here is not what we see now or the possibilities that people might see around the world. And you know, at the forum, we are hearing that we need to have a rider and a compass. So we have the rider, I think, we know some of these things. We know that we have this opportunity to have very long lives with the technologies and the medical advances, but it's not distributed evenly. So will our compass tell us that one way to really fill your life with great things, great accomplishments, is to work in, is to work in spreading all of these positive things, positive view of what we see here more around the world. Eric? Yeah, let me build on what Suzanne was saying and make a distinction between the long-term and the short-term, and very much in sync with what she was saying. In the long run, I think we have really the best thing that humanity ever hoped for, which is a world with vastly more wealth, vastly less work, and we read about it in science fiction as machines are able to take on more and more of our tasks, and we will eventually get to that kind of society. But I think it's a mistake to focus too much on that far future that we read about in science fiction because the problem we have today is quite different. Right now, there is so much work that needs to be done. We have no shortage of problems in healthcare, in education, in cleaning the environment, and the fact is that most of those tasks require human labor right now. Machines are not good enough to handle so many of those different tasks, and it would be a mistake to focus too much on the distant future. I've come up with a way of phrasing this. I call it technological presbyopia. Presbyopia is that when you can see far away, but you can't see close, I see some people here with glasses like I do, and we need glasses because we can no longer see what's up close. I think we're making the same mistake with technology. We see this vision in the future of a world without work and people are seduced by it, but the reality is right now we have so much work that needs to be done, and let's focus on solving the world's real problems today that cannot all be done by machines. They're generally gonna require a human machine partnership to solve things that we've never been able to take on before, and if we do that, I think we're gonna have a much smoother path to that eventual world of increased leisure. One of our participants yesterday was saying that we've been focusing so much on the word disruption and we need to start looking at it instead as responsible disruption and to manage this process that is underway. So we've had a conversation that's been fairly focused on the advanced economies. What do things look like in the rest of the world? What do you think some of the changes will be in emerging markets and the developing world? Sure, why don't I touch on that? And we heard from Premier Xi Jinping was he yesterday, the day before, and I thought his comments were very, very thoughtful, but having spent some time visiting the factories in China there, I came away feeling like if anything, many of those developing countries are even more in the bullseye of this revolution than the advanced countries. And the reason is, as you go to those factories, there's a lot of people still doing a lot of routine, repetitive kinds of work, and they do it at lower wages than they do in Switzerland or Germany or Canada, and so they're very competitive, but the fact is that no matter how low the wages are, they're not gonna be able to compete with the next generation of robots, so that workforce is gonna have to be transformed just like it is in the advanced countries, but they start, on average, with less educated, fewer people in the service sector, fewer people in the education and R&D sectors, so they have an even bigger transformation ahead of them, and I think it's gonna hit them really hard. They've been very successful the past couple of decades competing against humans in the advanced world and creating a lot of wealth for themselves and for the world in general, but going forward, the technological revolution is going to affect the entire globe. If we handle it right, it will create broadly shared wealth, but the disruption that you refer to, I hope it will be responsible disruption is gonna hit globally. So there's some people who predict that we're going to go towards seeing the rise of digital sweatshops, and there are others who talk about how some of the changes that are underway are going to lead to a leapfrogging opportunity for a lot of developing countries, again, if handled right. Where do you think things are heading at the moment? Who's doing it well? So I see both those things happening going forward, and I think the last part of your question is really the key, depending on how you handle it, if you handle it well, and one of the things that I, in a panel like this, is the temptation is to make predictions, and the thing that I keep reminding myself, and I wanna remind all of you, is the technology is a tool. It's a tool that we can use to change the world. It's a more powerful tool than any tool we've had before, which means we actually have more influence over the future, and we can use those same tools to create a very good society or a very bad society. Neither of them is inevitable. So I disagree with the optimists, I disagree with the pessimists, because both of them have this implicit assumption that something's going to happen to us, and the reality is that we get to choose and decide, so there will be countries and societies and companies that create digital sweatshops, there will be others that create a vastly broader, shared prosperity, and we've seen countries in the past take both of those paths, and I would encourage everyone in this room, and everyone who's watching, to think about how they can take an active role in shaping the future rather than a passive role in guessing what it's going to be. Thanks, Eric. Suzanne, let me get back to an earlier point that you made, which is really the human aspect of this, and so where should the focus of education systems be? Is it on the, we hear a lot about STEM education, ICT education, if the world is moving into a more technologically driven world, and that's what we should be preparing for, and there are others who say it's the creativity, it's the human aspect. Where do you think the balance should lie? I think the challenge for us is to return to the renaissance education, and particularly if generations of students now on our campuses are gonna live a long life, I think they would benefit most from a renaissance type of education. So of course, STEM, I think you cannot easily navigate this world if you have no understanding of science, technology, mathematics. It's an essential component, but I don't think it's sufficient. I don't think a person who's limited to very good education in these areas will necessarily be having a happy and productive life. I think that they need to also be exposed and learn how to enjoy all of the arts, humanities, and enjoy that learning. I think we need to think of a broader education rather than a narrower one, and that is actually, I think the challenge, because it is the challenge between an education that gets you job ready and an education that gets you future ready, and that's the big challenge. I couldn't agree more with that, and I think there's a great session yesterday where Alan Blue, the co-founder of LinkedIn, made exactly this point that there's this distinction between the harder skills and the softer skills. There's a temptation to get focused too much just on the hard skills, which are certainly essential, and coming from MIT, I see the value of them, but in the long run, being able to learn, being able to connect with other people, those are the things that carry over for long-term value creation. Thank you. We have time for a couple of brief questions from the audience. Sir. Thank you very much. I'm John Semeler, working for Ahol de Les and supermarket company with 350,000 people, so this topic is relevant for us, being a rather traditional industry. What I'm really worried about, although agreeing a lot to what has been said, is when is the reality check coming in between education and work, and I think we do this too late. University graduates will find their way, we go to smart people, but the majority of the people we work with are less educated, and I think there's an obligation for the private sector to do this reality check. Did we train now properly for demand? So the heat map of what demand will be, I think is very helpful, so that you know what to focus on, and I think the public and private sector have an obligation to check the reality as from elementary school, already much earlier if we are now training for the future or training for jobs. And if you see the number of people, youth graduates who are without a job, youth unemployment is a disastrous development, very demotivating for both parents and the youth themselves. So I would plead for a much earlier reality check, creating experience, creating jobs in retail as from 15 years. It's easy, the other industry is a little bit more difficult, but I think we have to make the reality much, much, much faster, earlier. Thank you, that's a helpful comment. Is there anybody who has a question? Birgen Mitnacht from Paris. I have a very, very practical question. If you would have teenage kids, what kind of curriculum, what kind of education would you advise to them to get them future ready and top ready? Because we are being asked this question quite often, and actually I don't have the right answer, but now I have the experts here, and thank you. That's a great question, a really important one. I'm glad you asked. Let me touch on three categories in particular that are very important. And the general principle is you want to do things that machines don't do well. Don't want to be competing with machines, you want to compliment them. So the first career, I think I touched on these a little bit, one is creative activity and large problem solving. These are teachable skills. And the sad thing is that if anything, schools have been almost designed to stamp it out, to discourage creativity. If you had a teenager now, you once had a three-year-old and you probably watched them play with blocks, they can't resist building things. They just, it's something in humans that we love to create things. And we need to allow that to flourish rather than discourage it. Secondly, and this is one that can affect a lot more people, is interpersonal skills. So many of the people at the supermarket or elsewhere, the checkout register, that's going to be increasingly automated. But connecting with other people, that is something that's going to be lasting for a long time. Teamwork, leadership, coaching people, motivating people. It doesn't work to have a robot give you a pep talk and try to motivate. That has to be a personal connection. And there are many people that may not have advanced degrees, but they have a lot of emotional intelligence and we can bring that out as well. And then the third thing I would say is that we are increasingly in a superstar economy and increasingly it's a winner-take-all economy. And the people who win those are the ones who are the very, very best in something. But the good thing is that there are many, many categories that you can be the best in. So that means I would double down on the old advice we always give to our kids, which is follow your passion. The reason you want to do that is because you want to be, you want to put in those extra hours where you really love something and you do it not because you have to do it, but because you enjoy doing it. And that's what you need to get to that really world-class level. And today you can reach not just a few hundred or a few thousand people, you can potentially reach a billion people. And it may be a very narrow particular skill, but if you are a superstar in it, you will find an audience. That's great, thank you. Suzanne, your view on that question. Yes, I will use three letters, R, D and D, anything that requires R, D and D. Anything that a person likes that requires a bit of research, digging deeper into the knowledge in something that you enjoy is a great thing. Of course, development. So the ability, develop your ability to say, okay, now that I find this great idea, how could I possibly be developed? How could we possibly implement it? And design, which is how can we do this in a way that is, in a way that people, with a people-focused attitude. So research, development and design is something that we do in many, many fields. It could be political studies. It could be in chemistry. It could be in any field, actually. Music. But those three types of activities, I think are the ones that will probably not be easily replaceable by computers, by algorithms and so on, that will require the human participation. And so, whatever you like, whatever draws you, but focus on making sure that these elements are part of your education. That's great, thank you. We all have only about a minute left and you asked a great question on what we should be telling kids. So let me turn this back to the people that are here today. The theme of this meeting is Responsible and Responsive Leadership. Leave us with your final thoughts in a sentence each, perhaps, as to what that looks like to ensure that we manage this transition in labor markets. Sure, so I think that there's a huge opportunity for wealth creation, but what we've been missing and the mistake we've been making is it hasn't been inclusive and it needs to be. So I would have a big push for inclusive innovation. At MIT, we've launched something we call the Inclusive Innovation Challenge, where we are challenging companies, not just to build the next generation of amazing technologies, but to build business models and ways of incorporating people into the production process that create widely shared prosperity, value for the many, not just the few. I think that if we make a conscious effort to direct the future in this direction towards inclusive innovation, we can have a much better society and it's a totally achievable goal. There's no one single path for the technology. It's gonna depend on our choices. So my by-words would be inclusive innovation. Thank you, Suzanne. Well, I'm not too far from that either. I think that that is the important thing, really. But inclusive innovation at a planet scale. It's easy, I think, when we live in the cities that we both live, to think of inclusive innovation and see how we can make that happen. It's a big, big, big challenge for our world to see that happening at the level of the planet. Okay, so globally inclusive innovation. Yes. Thank you for that. Eric Milneos and Suzanne Fortier. Thank you for joining us. My pleasure. Thank you.