Goldman Sachs Isn't That Worried About Technology Destroying Your Job
Don't fear the robots.
While new technologies are giving rise to a "jobs gap" – or a mismatch between the jobs people want and the ones that are available – they're also affording new opportunities for workers, Goldman Sachs Group Inc. argues in a new report.
The rise of automation, online tools, and big data echoes industrial revolutions of the past, with occupations and businesses following a "natural evolution" as technology advances, the bank argues. While the transition can be painful, it can also be helped along by new policies seeking to better share the temporary discomfort of rapid tech-driven change.
"The fact that technological change and innovation affects everybody across the political spectrum and the social spectrum means that there is a lot of focus on finding new approaches to bear the risk and to help people adapt," Sandra Lawson, director of Goldman Sachs Markets Institute, said in an internal interview last week to discuss the report.
It's not just that there's a lot of effort is going into solving the problem — technology is constantly evolving, which Goldman argues can make adapting easier. In the meantime, workers are already responding to the new employment landscape by taking on "adaptive occupations" that are better insulated from the rise of the machines. Such occupations include nurses and web developers but can also extend to more traditional vocations such as carpenters, plumbers, and tailors.
"The fact that it's a series of steps as opposed to one or two giant steps also makes it much easier to make adjustments to," said Steve Strongin, head of Goldman Sachs Research, who co-authored the report.
The bank notes that the technology-driven shift from farming to manufacturing beginning in the late 1800s meant the loss of millions of agricultural jobs but also "allowed the country to move into a new phase of economic growth." Similarly, the shift away from manufacturing in the 20th century has increased the importance of education, with the Bureau of Labor Statistics suggesting that six of the 10 occupations expected to show the fastest job growth by 2024 require at least two years of education beyond high school.
Still, managing the jobs gap can have benefits, argues Goldman. Since the risks are often too big for individuals to bear, institutions and governments should play a more active role in smoothing out the bumps created by a rapidly-changing jobs market. That could include offering tax credits for corporate job training or creating regulations that support the growth of the so-called "freelance economy."
"We need to understand the size of that decision, the notion that an individual doing it on their own is probably not reasonable. So we have to find ways of bringing corporations and the government into that risk sharing," said Strongin.