The moral quandaries of technological change

By Ryan Weeks, editor of AltFi.com and author of Pimple

Last year, a report predicted that by 2030, as many as 800 million jobs could be lost worldwide to automation and the advancement of new technologies.

But developments in artificial intelligence, robotics and smart apps could do far more than that, warns the leading tech journalist, industry insider and author Ryan Weeks – it could disrupt the world in a similar way to previous industrial revolutions. 

It’s nothing new to point out that technological change benefits some people while causing problems for others. But it may never have been truer than today.

As technological advancement races forwards, with technologies like blockchain, artificial intelligence (AI) and machine learning coming to the fore, many now suggest that we are on the brink if not in the midst of a fourth industrial revolution.

It’s not just a handful of Twitter quacks who believe this. Mark Carney, governor of the Bank of England, recently used the very same phrase in a speech at Mansion House – a speech in which he also said that data is ‘the new oil’.

Some have suggested that this fourth industrial revolution will be by far the toughest to stomach for the world’s workers, because this time round it will be cognitive – rather than physical – function that machines will replace.

The prospect of replacement is at the heart of technology-based tension. More or less every new app, every new website, every new gadget, brings with it the possibility of vastly improving the lives and experiences of its customers – while simultaneously threatening the livelihoods of people in jobs that have been performed by humans since time immemorial.

In the UK today, we see this quandary in action across a range of industries. Take, for example, finance. Flashy app-banks like Monzo and Revolut are becoming increasingly popular. Many a Londoner will have seen folks tapping in and out of the Tube using a hot coral-coloured card.

These ‘neo-banks’, as they are called, offer users an undeniably superior banking experience. They record spending instantly and can send payment notifications, if desired. Accounts may be opened in a matter of minutes. They are mobile-only. They allow for budgeting, provide savings prompts, and seamless access to a range of intelligently selected third-party services, rather than simply pushing their own products (as old-school banks do). Cards can be paused if lost. Customer support is a different beast in this sector – on occasion even featuring chatbots.

Furthermore, these banks – besides simply being capable of doing more with customer data, thanks to superior tech – seem genuinely to have their customers’ backs. For evidence of this, see the lengths gone to by Monzo to protect users (and even the users of other banks!) from a data breach at Ticketmaster.

This is a far from exhaustive summary of the boons of digital banking, but you get the idea. On the flip side, however, is what happens to the many thousands of people employed by incumbent UK banks.

In June, Lloyds Banking Group announced that it would be cutting another 450 jobs as part of an ongoing digitisation strategy that has also seen a large number of bank branches closed. All told, Lloyds has slashed more than 30,000 jobs since Antonio Horta-Osório took charge in 2011.

App-banks have no bank branches, and though they employ an increasingly large number of people, they are inherently and significantly ‘leaner’ than their incumbent rivals. As Ricky Knox, founder and CEO of Tandem (an app-bank), told me in June: “We try very hard not to over-hire, and indeed to solve problems with technology whenever we can. So I’m not going to be creating 40,000 jobs any time soon sadly.”

Are Tandem and Monzo and other banks like it directly responsible for those jobs losses? Of course not. But they are at least partly responsible for bringing about a step change in what customers expect from their bank. And in that, they are unquestionably a force for bad in the lives of many people working for big banks.

We see similar predicaments playing out across the tech sector. Take ride-hailing app Uber and movie streaming service Netflix.

Uber has been embroiled in a lengthy struggle with Transport for London, which for a while retracted the massive start-up’s licence to operate in the city. Uber now has its London licence back, much to the displeasure, no doubt, of the London Taxi Drivers’ Association – a trade body bent on making sure the London taxi trade remains ‘the best in the world’.

Drawing a less direct yet often-drawn-anyway comparison, Netflix is today worth a staggering $157bn (at the time of writing) and is the tenth largest internet company by revenue. And former film rental store giant Blockbuster? More or less faded into obscurity.

And how different it could have been, bearing in mind reports that Blockbuster once passed up the chance to acquire Netflix for a paltry $50m.

The big unknown about technological disruption is how far-reaching its effects will be. Are we destined to live in a world where mammoth, category-defining technology firms have perfected processes to the extent that few jobs will remain for humans? Or will the workforce re-tool, re-train, and find new roles in amongst the machines?

Ryan Weeks is the editor of AltFi.com, one of the leading news and intelligence resources for fintech in the UK. His new novel, Pimple, explores the dramatic consequences of technological disruption. It is out now through Amazon UK priced £10.99 in paperback and 99p in ebook.