brandpassig

Be afraid, be very afraid.

There was a cartoon making the rounds on Facebook a while back. Two pigs are in a barn, and one says to the other: “Isn’t it great that we’re getting all this free food?” Underneath, the caption reads, ominously: “If you’re getting it for free, you’re not the customer, you’re the product.”

That’s what’s happening today with the digital economy. We get free search and social networking and better consumer choice up front, and fail to ask ourselves how we’ll be paying down the line. Last week, I attended a riveting panel at the Herzliya Policy Conference, and if I correctly read between the lines, many of us will be paying with our jobs and livelihoods.

The panel was titled “The Technological Revolution in Higher Education.” It sounds boring enough, and if you didn’t know any better, you might have thought it was a feel-good discussion about futuristic classrooms filled with hologram equipment and 3D printers.

But the panel was about a lot more than that. It was about the winners and losers of our new economy, about high-tech employees and the rest. It was about who will join the wealthy 10 percent, and whose livelihood will be “disrupted,” forcing them into a vast underclass that ekes out a living cooking food for the wealthy or cleaning their hotel rooms.

“Any time an industry is touched by the digital world, it undergoes dramatic rapid innovation,” said Google Israel CEO Meir Brand. “Just name an industry: communications, the media, advertising, retail,” he said. “Education is next.”

Brand is no dummy. He sees what many journalists, and others, are in denial about. My own industry, journalism, has definitely been “disrupted” by high-tech.  According to the Pew State of the Media Report, magazines and newspapers in the U.S. shed 54,000 full-time jobs in the last decade, with online news outlets creating only 5,000 new positions. Newspaper newsrooms have lost 30 percent of their staff since 2000, around the time when news became freely available online.

You may not care about journalists, but the same thing has happened to musicians photographers, translators, filmmakers – and we’re just the canaries in the coalmine. Almost no profession or industry is immune.

“Doesn’t this [innovation] destroy jobs?” the moderator asked Brand.  “Real-estate brokers have been made redundant by the Internet, robots are replacing [low-skilled] workers. And even high-skilled workers are being replaced by outsourcing to distant countries?”

Yes, Brand conceded, technology destroys some jobs. But it creates opportunities for more sophisticated workers, especially those with great educations and top-notch skills in math, computer science and engineering.

In other words, it creates opportunities in high-tech.

Other panelists put it in starker terms.

“Centuries ago,” said futurist David Passig, “societies had a tiny elite and everyone else was miserably poor. The great struggle of the past two hundred years was to create a middle class. We managed to create a society with ten percent wealthy people, 70 percent in the middle, and 20 percent who will always be at the bottom. But now, in the 21st century, this is unsustainable. It looks like we will have 10 percent at the top, and the rest down below.”

IDC Herzliya President Uriel Reichman also said that income inequality is inevitable.

“Unfortunately, in the world of the future, these income gaps will exist. That’s why we are training our students for social responsibility.”

Social responsibility? Is Reichman implying that once his students launch their killer app, one that disrupts the automotive, medical or pharmaceutical industry, they will build soup kitchens for the newly unemployed?

Because that’s what the app economy is about. As high-tech theorist Jaron Lanier puts it, “The terminology of ‘disruption’ has been granted an almost sacred status in tech business circles. It is ordinary for a venture capital firm to advertise that it is seeking to fund business plans that ‘shrink markets.’ …In Silicon Valley, one is always hearing that this or that industry is ripe for disruption.”

Disruption, he says, is always a version of the same game. “Technologists repeatedly apply the extreme efficiencies of digital networks in some area of endeavor in such a way that the sources of value, whatever they may be, are left more off-the-books than they used to be, but we end up in control of the server that runs the scheme.”

Look at any of the most wildly successful apps of recent years and you’ll see what Lanier means. Waze crowdsources traffic information (and the user’s mobile device automatically sends location information to Waze). The information, which is the source of value, is provided by millions of users free of charge, or off-the-books, and Waze earns money being the server that runs the scheme. Google and YouTube sell advertising against content they did not pay to produce, often impoverishing the content producers (writers, musicians, filmmakers) in the process. Airbnb has reached a $10 billion valuation by disrupting the hotel industry, in part because it does not pay taxes or spend money on health, safety and insurance the way regular hotels do. Nor do they have to consistently meet payroll or pay for employee health insurance – reducing someone else’s security is always good for efficiency. There’s even a high-tech sector called fashion tech that aims to disrupt the fashion industry by luring consumers away from brick-and-mortar clothing stores.

If you think your profession or industry is safe, think again.

Driverless cars have advanced to the point where they make fewer errors and have fewer accidents than human drivers. Google’s Sergey Brin thinks they could be on the road in four years. Soon after, cabbies, truck drivers and the millions who make their living behind the wheel could lose their livelihoods.

Or consider this: IBM’s supercomputer Watson, famous for beating the world champion of the TV show Jeopardy, has now “gone to medical school.”  According to Wired Magazine, the computer is already “better at diagnosing cancer than human medical doctors.”

“Watson’s ingestion of more than 600,000 pieces of medical evidence, more than two million pages from medical journals and the further ability to search through up to 1.5 million patient records for further information gives it a breadth of knowledge no human doctor can match.”

As we speak, the computer is being leased to hospitals and cancer centers to help them cut medical costs. What costs, you may ask? Could they mean the comfortable salaries of flesh-and-blood oncologists?

The third example comes from Brand himself. “The very fact that we’re sitting here in a lecture hall,” Brand told the audience, “shows that the revolution hasn’t reached higher education yet. I think in the future academia will be less real-estate intensive.”

At that point, any non-tenured professor in the room must have been shaking in their shoes. Because separating education from real-estate can only mean one thing: online courses. Online, your average professor Riki Cohen from Hadera has no comparative advantage over star lecturers from places like Stanford and Harvard (except maybe language). But why should a student tune in to her when he can learn from the very best? Gradually, Professor Cohen’s pay and benefits will be cut – she will be more like a teaching assistant, providing interactive face time to students who are taking online Stanford courses. Forget about tenure. Riki Cohen will be lucky to pay her rent.

I can feel some readers getting exasperated. “Haven’t you heard of creative destruction?” they’re saying. “Technology has a way of destroying jobs and creating new ones. We’ve been hearing these doom-and-gloom predictions for ages!”

In fact, economists are divided on this question. For much of the 20th century, technological innovation has led to new (good, middle class) jobs. “However, this empirical fact conceals a dirty secret,” write Economists Erik Brynjolfsson and Andrew McAfee in their latest book “The Second Machine Age.”

“There is no economic law that says that everyone, or even most people, automatically benefit from technologicalprogress.” In the past, they write, machines replaced physical human labor, but jobs opened up that required cognitive skills: secretaries, doctors, accountants, air traffic controllers etc. But what do you do when computers can perform all these jobs better than humans? What’s left?

And if technological progress leads to so much upheaval, why is it necessary at all?

According to economists, that’s a stupid question, like asking if the tides are necessary.

“No one planned this. No one saw it coming,” David Passig told the Herzliya Conference. “These are large, impersonal forces.”

In other words, if Google and Meir Brand weren’t driving the changes that lead to income inequality, it would be someone else. Don’t shoot the messenger.

Passig says Israel’s best hope is to educate its citizens so that 30 to 40 percent are part of the high-tech economy. The rest of society can survive on their coattails, providing goods and services to the overclass.

What a depressing thought! Is that the best-case scenario? Who wants to live in a world where only left-brain people are rewarded? Where musicians, journalists and teachers can’t hold their heads up high? Where prosperity and economic hope are for the minority?

These are weighty questions, but in the meantime I have children to feed. That’s why I’m looking for a job in high-tech marketing.

Friends, you’ve been warned. And for those of you who don’t “get it,” who go on with your merry lives or insist on doing the job you love, I say, good for you! I’ll do my best to employ you or your children as a gardener or pool cleaner. Don’t worry, I intend to be a benevolent high-tech overlord. You know, the kind that tips really well!

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