Silicon Valley has famously provided the public with addictive social media, reliable search engines, and sophisticated software. But its most concerning impact, economists observe, is its development of a new invisible hand in the marketplace: advanced technology.
This innovative California city is either manifesting the national trend, by having one of the country’s most significant wealth gaps, or contributing to it by producing digital technologies that eliminate the need for many middle class jobs. Russell Hancock, president of Joint Venture in Silicon Valley, told Technology Review, “When we used to have booms in the technology sector, it would lift all boats. That’s not how it works anymore. And suddenly, you’re seeing a backlash, and people are upset.” There is no longer a ladder to get into the middle class, and while it didn’t happen suddenly, he said 2014 brought an awakening to this issue.
Erik Brynjolfsson, professor of management at MIT’s Sloan School and co-author of The Second Machine Age, worries that a growing share of the workforce could be left behind, even as digital technologies increase overall income. He said productivity and GDP may be on the rise thanks to progress in this sector, but in this modern technology-driven economy, only the small group of imaginative individuals comes out on top.
It wasn’t always this way. In the 1970s and 80s, new technology was connected to people’s hands and eyes, simply heightening human capabilities, said Brad DeLong, professor at the University of Berkeley and economic historian. But that trend is “edging away.”
“Ten years ago, people in the workplace used to be the muscles and fingers, moving big things around and making fine manipulations. The problem is that the technologies we’re now moving into are things we can substitute for ‘look at the form and put it in the proper pile.’”
As robots and automation replace routine, low-skilled jobs, economists observe that perhaps technology isn’t as responsible for income inequality as it is for the increased demand for creativity and innovation, resulting in little need for uneducated workers. Addressing the disparity in education would be an obvious yet complicated solution to this economic imbalance. But one thing is certain: it’s time to adapt, or get left behind.
Image by elph, licensed under Creative Commons