Economy

The “Fourth Industrial Revolution”: Queue Chaos And Disarray

Rhett Schwichtenberg, MJLST Staffer

We are all familiar with Hollywood’s drastic miscalculations when predicting the future. In Timecop, which took place in 2004, time-travel was the conventional means of transportation. In the world of Marty McFly, 2015 marked the year where hoverboards were the standard means of transportation. In 2001: A Space Odyssey, the moon was colonized by 2001. The list goes on. While we [unfortunately] see none of this today, perhaps Hollywood was not too far off.

Today, robots are shaping the way we live and have contributed a world of good to society. While Google Glass might have been an utter failure, Google’s Self-Driving Car Project is making fast advances to provide the world with hand-free, piece-of-mind driving. Taxi giant, Uber, has also entered the self-driving market with the implementation of self-driving Uber vehicles in the Pittsburgh market. Self-driving technology has the ability to eliminate the extreme and unnecessary amount of traffic deaths occurring every day in addition to providing a reliable mode of transportation for individuals that cannot operate a vehicle. Apart from the transportation industry, robots are growing rapidly in nearly every industry including the agriculture, food service, manufacturing, military, and rehabilitation industries.

Earlier this year, the EU made a proposal calling for the classification of autonomous  robots as “electronic persons.” If codified, this proposal could bestow legal rights upon robots, require companies to pay a social security tax for using them, and impose a liability insurance upon companies using robots in order to protect against any harm they might cause. While ridiculed by many, is there no merit in this proposal?

The age of robotics that is currently among us is being referred to as the “fourth industrial revolution” by economists. The first industrial revolution introduced steam power, the second, electric power, and the third, electronics and information technology. While the past three industrial revolutions have advanced at a linear rate (occurring approximately one-hundred years apart) the current revolution is advancing exponentially. Previous technology has threatened blue-collar jobs, but has never caused us to question whether jobs will even exist in the near future. With the implementation of quantum computing looming, the professionals in scientific and medical fields might experience issues of job security.

Alan Manning, leading author in labor economics and professor at the London School of Economics, seems to remain calm, cool, and collected when tasked with answering the question of how autonomy will affect the labor market. He strongly opines that such technology should not be taxed. Implementing the proposed tax will slow the advancement and use of such technology. Instead, Manning expects investment in modern technology to increase productivity and, at worst, leave the labor market where it currently stands. Manning believes the expert prediction that 47% of jobs will be threatened by autonomic robots is just that, a mere prediction. He retorts that such a prediction is grounded in ignorance rather than educated measures. Manning states that the entire job market must be looked at, not just the specific occupations that will see job reduction. Looking at the job market as a whole, Manning admits that jobs will be lost in some areas, but trusts that new jobs will arise due to an increase in companies’ spending power through the use of autonomic robotics.

So given that autonomic robotics and advanced computing technology is already written in our future, what are the implications of such technology? The simple answer is: we must wait and see.


Regulating the Sharing Economy: Fostering Innovation and Safety

Steven Groschen, MJLST Managing Editor

The sharing economy is a marketplace for individuals to exchange goods and services directly with one another. In the past, sharing economy participants, whom wished to lend their property and time directly to others, had the challenge of finding a way to connect with individuals seeking to borrow property and services. The internet and other modern communication systems have provided opportunities for overcoming this barrier. Consequently, the cost of matching a particular individual’s demand with another individual’s supply (i.e. transaction costs) within the sharing economy has been greatly reduced. As a result, sharing is quickly becoming a cost-effective and environmentally friendly option for ordinary consumers.

Not everyone is fond of the sharing economy movement. Long-established institutions and industries are experiencing increased competition by competitors whom are not always required to play by the same rules. For instance, the increasingly popular ride sharing system, Uber, has received scrutiny from players in the current taxi system. They argue that Uber is unfairly competing because it is not subject to the same regulations as traditional taxi drivers.

Regulators are challenged to find the optimal method of regulating the emerging sharing economy. Enacting regulations that are too strict will impede the innovation generated by sharing economy startup companies. On the other hand, regulations that are too lenient may threaten another core value: protecting the safety of consumers. Unregulated and non-centrally controlled systems of transportation run the risk of having a wide variance in outcomes. One Uber taxi driver may be perfectly safe, whereas another creates a hazard on the streets. Some are concerned there should be more government oversight and regulation addressing these risky drivers.

Professor Sofia Ranchordás suggests “establishing, broader, principle-based regulation[s]” is the answer to the legal problems created by the sharing economy. The use of principles rather than specific regulations acknowledges that technology is constantly changing. Broad regulations are designed to be more adaptable to changes in technology. As a result, this method of regulation protects two of the important goals of the sharing economy. First, bottom-up innovation is not stifled by rigid regulations that prohibit experimentation. Startup companies in the sharing economy are free to experiment so long as they stay within the boundaries of the broad principles. Second, there is more flexibility to create regulations addressing concerns for safety and general consumer protection. Regulators are not restricted to a narrow definition of what is “safe,” thus technology changes affecting safety are more easily managed.