� While technology adoption may be disruptive in the short term, especially to jobs

and
incomes, our library of applications (use cases) highlights a variety of ways in
which
technology itself can help smooth those disruptions and preempt risks. For example,
online
training programs and job-matching digital platforms can help workers improve
skills and
find employment, while mobile payments for financial access and online marketplaces
that
reduce prices of goods and services can positively affect material living
standards. Other
socially beneficial use cases include adaptive-learning applications to better
prepare
young people for the labor market, AI-powered drug discovery and personalized
medicine
for longer and healthier lives, and clean technologies for environmental
sustainability.
� While technology has been a significant contributor to welfare growth in Europe
and
the United States in the past 40 years, our modeling suggests that, for the next
decade,
welfare growth may continue on the same trajectory only to the extent that new
frontier
technology adoption is focused on innovation-led growth rather than purely on labor
reduction and cost savings through automation, and that technology diffusion is
actively
accompanied by transition management that increases workers� mobility and equips
them
with new skills. Other measures may also be needed to ensure a successful
transition,
potentially including support for wages. For all its potential, technology that
enhances
well-being is a tool kit that cannot address all the issues on its own.
� A first attempt to estimate the approximate monetary value of a scenario in which
proactive
management smooths transitions related to technology adoption and innovation-driven
growth suggests that the potential boost to welfare�the sum of GDP and additional
wellbeing components�can be between 0.5 and 1 percent per year in Europe and United
States by 2030. This is as much as double the incremental growth from technology
that we
have modeled under an average scenario. Other scenarios that pay less heed to
managing
transitions or boosting innovation could slow income growth, increase unemployment
risk,
and lead to fewer improvements in leisure, health, and longevity.
� Government and business have important roles to play in ensuring good outcomes.
The
public sector can help drive innovation and improve welfare by supporting research
and
development including in health, spurring technology adoption through procurement
practices and progressive regulation, and ensuring retraining and transition
support for
workers coping with workplace disruption. Business can focus technology deployment
on new products, services, and markets, augment the skills of the workforce
including
with technological solutions, and increase worker mobility by creating new career
paths,
among other steps. They can also prioritize technology solutions that
simultaneously
improve their bottom line and the outcomes for society.
This paper is aimed at stimulating discussion about the opportunities and
challenges
surrounding technology adoption and how technology itself could help mitigate
negative
outcomes. This is a debated area of economics and policy. We hope our efforts and
preliminary
findings will stimulate other research in this field that will spur improvements in
methodology
and refine our insights. We intend to return to the issues raised in more detail in
due course.
Tech for Good: Smoothing disruption, improving well-being 3
1. Technology, for
better and for worse
Technology for centuries has both excited the human imagination and prompted fears
about its effects. Philosophers and political economists from Plato to Karl Marx
and Martin
Heidegger have given technology a central role in worldviews that veer between
benign
optimism and despondent pessimism.1
Today�s technology cycle is no different, provoking a broad spectrum of hopes and
fears. At
one end are the �techno-optimists� who emphasize the benefits to the economy and
society,
and at times promote theories of technology�s �singularity,� under which rapid
growth in
computing power and artificial intelligence accelerates sharply and brings a
cascading series
of improvements through the economy.2
At the other end are �techno-pessimists,� who worry
about the potentially damaging consequences for society, particularly of AI,
sometimes
in apocalyptic terms.3
Opinion surveys suggest people tend to have a nuanced view of
technology but nonetheless worry about the risks: while generally positive about
longer-term
benefits, especially for health, a non-trivial proportion (between 15 and 25
percent) is also
concerned about the immediate impact on their lives, in particular in the areas of
job security,
material living standards, safety, equal opportunities, and trust (Exhibit 1).
Intrinsically, technology is neither good nor bad�it is the use to which it is put
that makes the
difference. Malicious uses include mass disinformation campaigns and cyberattacks
that
seek to jeopardize national security, and cyberfraud targeting consumers.4
Positive uses
include AI applications for early detection and better treatment of cancer and
other diseases
that are a burden on society, such as diabetes.5
Most technology applications can generate
both good and bad outcomes�sometimes for the same person. While automation and
other
technologies may threaten some jobs and the material living standard of displaced
workers,
for example, these technologies can also be a source of new jobs and help people
retrain and
acquire new skills. They could also reduce the costs of basic goods and services
for the same
people as consumers.
This technological duality has always existed. Gutenberg�s printing press could
publish
uplifting masterpieces of world literature and seditious pamphlets alike. A bolt of
electricity can
execute a convict on death row or light up a classroom in rural Africa. Strains of
viruses can be
used in germ warfare or to vaccinate children against diseases that would otherwise
kill them.
1 Plato and Aristotle used technological imagery to express their belief in the
rational design of the universe; for Karl Marx,
technological advances were a key for his analysis of worker alienation under
capitalism; Martin Heidegger�s technopessimistic treatise The Question Concerning
Technology (1954) emphasized that, while technology is not problematic
in itself, human interaction with it is: �everywhere we remain unfree and chained
to technology, whether we passionately
affirm or deny it.� 2 The notion of singularity is often attributed to
mathematician John von Neumann and was popularized in the 1950s
and �60s, including by Herbert Simon (The Shape of Automation for Men and
Management, New York, NY: Harper
and Row, 1965), and featured more recently in futuristic studies including Ray
Kurzweil, The Singularity Is Near: When
Humans Transcend Biology, London, UK: Penguin Books, 2005. For a detailed critique,
see William D. Nordhaus, Are we
approaching an economic singularity? Information technology and the future of
economic growth, NBER working paper
number 21547, September 2015. 3 For example, Stephen Hawking warned that �primitive
forms of artificial intelligence we already have have proved very
useful. But I think the development of full artificial intelligence could spell the
end of the human race.� �Stephen Hawking
warns artificial intelligence could end mankind,� BBC News, December 2, 2014. 4
Miles Brundage et al., The malicious use of artificial intelligence: Forecasting,
prevention, and mitigation, Electronic
Frontier Foundation, February 2018. 5 See, for example, Rob Matheson, �Artificial
intelligence model �learns� from patient data to make cancer treatment less
toxic,� MIT News, August 9, 2018; Ivan Contreras and Josep Vehi, �Artificial
intelligence for diabetes management and
decision support: Literature review,� Journal of Medical Internet Research, May 30,
2018, Volume 20, Number 5.
4 McKinsey Global Institute
In our age, frontier technologies such as the Internet of Things, ledger
technologies, smart
robotics, automation, and artificial intelligence are likely to follow the same
pattern. By
boosting productivity growth, they will raise prosperity and replace mundane or
dangerous
tasks. They have the potential to do good across a wide range of domains, from
healthcare to
education. As in previous periods of technological innovation, these technologies
may have
perverse effects that will require preventive or counteraction, such as AI being
used in warfare
or unethically (see Box 1, �Ethics and frontier technologies: A burgeoning field of
research and
debate�). Other negative outcomes could include accelerated workforce dislocation,
rising
income inequality, and rising pressure on middle-class jobs that used to be
abundant and
relatively well paid.
That being said, technology has perhaps never been so present in our lives (Exhibit
2). Its
ubiquity makes it an extremely powerful tool for delivering change, including
change that is
positive, if we want it to be.