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11 January 2020

What Few In The West Talk About

"In future, people who can continuously educate themselves will be needed; people who can cooperate and co-create with artificial intelligence. What will be needed is not just labour but, increasingly, “post-Renaissance men”. In addition, the development of artificial intelligence may redefine both legal capacity and productivity. To put it simply, one of the main questions is whether an advanced intelligence with an artificial neural system will reach the status of slaves in ancient times."

 

 

The Unexplored Relationship between Non-EU Citizens’ Migration and

Robotisation in Europe

 

See what everybody sees,

and think what nobody else has thought.

Albert Szent-Györgyi

 

I consider myself very lucky to have had the opportunity to work in parallel at an EU institution (the Parliament) and in a human rights committee (CRPD) of the United Nations for seven of the past 10 years. I have obtained valuable experience in the fields of migration, the labour market, social policies, technological innovation, rehabilitation and modern health care development, among others. The title of this article may need no explanation, apart from the direct relationship between the future of automation and the need for non-EU citizens’ immigration. This is an issue that has never (officially) been examined by EU institutions.

 

INTERNATIONAL MIGRATION WILL ONLY INCREASE, ALONG WITH PRODUCTIVITY AND AUTOMATION

 

Let us start with migration. A recent analysis published in the Financial Times1 concludes that migration is a major driving force behind globalism, but it is also the most hidden one. In addition, the largest source countries have become (are becoming) interested due to the money sent home by migrants, who transferred over USD 640 billion to their families in developing countries in 2018. According to the OECD,2 this amount was almost four times higher than the USD 146.6 billion that developed countries spent on international aid in 2017. The trend is increasing as the amount of money transferred home by foreign migrants working in various countries of the world increased by almost USD 100 billion between 2012 and 2018. (It should be noted that the international financial system has been fast to react to this trend:3 the costs of fund transfers home have decreased significantly, by almost two per cent, since 2013.)

This is based on a tendency documented by the World Bank and the United Nations: since 1960, the number of people living outside the country of their birth has grown from close to 72 million to more than 245 million. (In the European Union, this ratio is less than four per cent or 17 million people, and the employment ratio of those born in other EU countries is 77 per cent, much higher than among the local population.) Also, according to a projection by the UN, almost 300 million people will migrate from less developed regions to developed countries by the end of the century.

Concerning the spread of “conventional” robotics (that is pre-manufactured and pre-defined, and serves limited purposes with limited flexibility), current analyses can obviously be based on the current top technology only. Still, the analysts of McKinsey projected in 20174 several times faster annual productivity growth (from 0.3 per cent to 1.5 per cent) compared to the rates measured in the 19th and 20th centuries at the peak of the so-called first Industrial Revolution. In PwC’s interpretation5 of the same process, artificial intelligence-based developments are expected to raise global GDP by 14 per cent by 2030, which corresponds to the current total output of China and India (about USD 16 trillion). Specifically in China, AI developments are foreseen to boost GDP by as much as 26 per cent.

OECD data indicates that productivity in newly joined countries (such as Poland, Hungary or Latvia) is much higher than in some old member states (e.g. Italy, Portugal or the United Kingdom). This is primarily attributable to booming high-tech investments in East European countries who face an ageing population but officially reject immigration.

 

DRAMATIC CHANGES IN LABOUR AND THE GLOBAL ECONOMY

 

A comprehensive analysis of the relationship between new technologies and jobs, prepared by the Oxford University and Citi in 2016, points out that demand for people of medium education (so-called routine cognitive and routine manual workers) declined the fastest in the USA between 1984 and 2014.6 According to a forecast prepared by the World Economic Forum in 2018, the need for labour time in production will fall to about 60 per cent by 2022. By 2025, robots and artificial intelligence will “spend” 52 per cent of the work time.7 Even though there is a constant and growing fear of the arrival of mass unemployment, a phenomenon to which Keynes dedicated an article as early as in 1930 (“Economic Possibilities for Our Grandchildren”),8 this issue was already a topical one in America’s left-Marxist discourse in the mid-1960s.9

Nevertheless, according to a 2018 forecast by the World Economic Forum (WEF), 75 million jobs will be eliminated globally, but more than 130 million will be created by 2022. This projection is supported by a book by Carl Benedikt Frey, titled The Technology Trap and published in June 2019.10 The author concludes that an industrial revolution always creates additional jobs because it increases productivity, thus bringing more revenues and lower prices leading to an expanding level of production and growth.

Still, science and European politics are clueless regarding the pace and direction of further automation. According to an analysis published by McKinsey in May 2017, we are only at the beginning of the transition to a fully digital economy, because even in the United States the current digitalisation level is not more than 20 per cent of the overall potential. (This ratio is even lower, 12 per cent, in the EU.11) As to the expected spread of automation, only five per cent of all jobs in the USA are estimated to be fully replaced by machines and algorithms, ranging from sewing machine operators to assembly line workers. On the other hand, it will be possible to partly automate approximately one in three jobs within 60 per cent of all jobs. This means that up to 70 per cent of one in two jobs can be kept. In fact, the past 25 years’ experience shows that 33 per cent of new jobs did not even exist before, especially true in information technology.

According to a fresh projection compiled in 2019 by Tractica, a major think tank, the market of artificial intelligence software will grow from USD 9.5 billion in 2018 to almost USD 120 billion by 2025.12 Using the technology called Industry 4.0, China is now at the frontline of fully automated production and industrial robots, the market value of which is USD 80 billion. Although most of these robots are used in car manufacturing and electronics, prototype design and production will soon be planned virtually, leading to manufacturing errors completely minimised, and robots will eventually work autonomously. Also, with unique access to almost unlimited information and data, the development of robots and software will even start in the very factories (where robots themselves will make robots), with the involvement of workers who use 5G technology and what is called extended reality. It is no coincidence that these developments are led by China and Japan: their populations are decreasing and ageing extremely fast, so they consider robotics as a major tool and solution, besides the recent and radical abolition of China’s single-child policy, and easier employment conditions for women. Automated factories in Industry 4.0 are predicted to expand by 6–7 per cent over five years, robotisation should spread by 14 per cent, and industrial software usage could rocket by up to 30 per cent during the same period.

The global competitiveness of the EU, on the other hand, has been declining continuously since the 1990s. In fact, the reality is even darker: the difference between the per capita GDP of the EU and the USA has increased by as much as 50 per cent to America’s benefit.

The current signs are not promising at all: a 2018 report by the European Investment Bank13 shows that the situation regarding research and development has not improved but in fact deteriorated in relative terms: while R&D expenditures went up between 2005 and 2015, virtually all competitors have left the EU behind, and GDP-proportionate R&D spending is higher in every and each major competitor (South Korea, Japan, USA and China). The number of patents registered in China is significantly higher since it is even larger than the corresponding total figure of the USA, the EU and Japan, even though China’s patents are methodologically debated. Chinese universities are clearly moving up on international lists: the Beijing University is now ranked higher than Oxford.14 So the education and attitude of immigrants, children and young people do matter. It is also telling that most Chinese children want to be astronauts when they grow up, whereas their American peers rather aspire to become celebrities.15

And looking farther into the future, current analyses and projections indicate that the economic ranking of the seven most developed countries (USA, Canada, Germany, United Kingdom, France, Italy, Japan) compared to the top seven emerging (E7) countries (China, India, Brazil, Mexico, Russia, Indonesia and Turkey) will change by 2050: the G7 GDP will be doubled, but the GDP of E7 countries will rocket tenfold. (USD 34.1/18.8 thousand billion to 69.3/138.2 thousand billion.) Unless the trend turns, India will overtake the USA in terms of GDP by 2050, just like Brazil will overtake Japan and Germany.

 

EUROPE’S STRUGGLING MIDDLE CLASS AND AGEING AS A NEW SOCIAL PHENOMENON

 

According to the analysts of McKinsey,16 the current crisis of the West European middle class is partly due to the fact that 65–70 per cent of developed countries’ citizens live in households the income of which did not change, or in fact went down, between 2005 and 2014. This means a significant increase from two per cent to above 60 per cent over 10 years, compared to the previous period (1993–2005). In addition, the Brookings Institute projects that the size of the middle class population of Europe and North America will not change significantly, while the number of their Asian peers should be doubled, reaching 3.5 billion by 2030, i.e. several times more than the whole middle-class population of Europe and the USA altogether.17 According to the general analysts’ consensus, neither Europe’s nor America’s economy will be among the 10 annually fastest-growing economies of the world in the next few decades.

By 2050, at least one quarter of European and American citizens will be over 65 years of age. As the average life expectancy grows, people will not only live longer but will also remain more active and be healthier senior citizens for longer. Moreover, a separate branch of science has appeared, spurred by the renaissance of advanced medical rehabilitation and the revolution of biotechnology. Prosthetic limbs controlled with one’s mobile phone or even mind are now in sight; a prosthetic hand has already been developed that the patient can feel and use to break up even a fragile egg.18 In fact, it leads to that the mechanical part can be more enhanced than the original, and make its owner more competitive.19 The first breakthrough for a direct brain-internet (“brainternet”) connection was achieved in September 2017, which can also open new horizons.20 So, “augmented persons” of developed societies, who will constitute workforce with enhanced skills, will be a new phenomenon to which our current societies or politicians cannot respond yet. This issue may, over the long term, raise questions about disabilities, employees and productivity, and it also involves difficult and urgent legal questions. Who will be considered disabled, and who will be eligible for support? How will employees be prevented from abusing and illegally exhausting their modified bodies and enhanced skills? Mark Zuckerberg used to say that “young people are just smarter”. But recent research indicates that this is not entirely true: it is middle-aged persons who are the most productive, as the average age of the fastest-growing and most successful start-up companies’ managers is 45 years. The results also revealed that a 50-year-old company founder has a 1.8 times higher chance to establish a successful start-up business than a 30-year-old peer.

Where researchers are wrong concerning their demographic and financial support predictions is that they talk about historical tendencies instead of a “changed” future. Neither researchers nor historians nor decision-makers know the long-term effects of an ageing society; we are facing a process that is unknown in human history. This new demographic and productivity process will entirely transform the economic and social structure of the West. This could be a major warning signal concerning the judgement of mass migration, and could also define the future and peace of our continent.

 

2030: THE COMING OF THE POST-RENAISSANCE MAN?

 

In future, people who can continuously educate themselves will be needed; people who can cooperate and co-create with artificial intelligence. What will be needed is not just labour but, increasingly, “post-Renaissance men”. In addition, the development of artificial intelligence may redefine both legal capacity and productivity. To put it simply, one of the main questions is whether an advanced intelligence with an artificial neural system will reach the status of slaves in ancient times. (Algorithms can already conclude legally valid contracts on stock markets; The Economist reports that stock markets’ algorithms now conclude the majority of transactions.21) Questions related to damage caused by a robot are gaining relevance, along with the related liability and insurance issues. This matter was discussed in Orsolya Zara’s article of European Law (Európai Jog, HVG-ORAC) titled Robo Sapiens: a new legal person on the horizon? in 2016.22 According to the futurologists of the renowned think tank National Intelligence Council who write reports to US presidents, one of the main questions after 2030 will be what people will find to do in an environment where the most developed countries now seem to have a meagre chance for economic growth.23

In my opinion, the latest (fourth) industrial revolution could be entirely different from the previous industrial revolutions as it may usher in a truly organic symbiosis between humans and artificial intelligence-based technology in the next decades. Wearable smart devices fortified by AI assistants have already arrived, to be followed by increasingly sophisticated implants like cochlear implants for the deaf, which is just the beginning. Finally, biotechnology (and possibly genetic modifications even in adults) will evidently and eventually slow down ageing according to the newest research, too. (A revolutionary treatment in the field of senolytic to prevent serious old-age related health problems could be available in years.24) These developments will open entirely new horizons for human productivity by challenging the notion of dependency ratio in the future. In fact, the question will arise whether or not this is human productivity at all, in view of the contribution of increasingly autonomous and intelligent robots. Consequently, this area could constitute a key research field in future, which will also be related to the legal and economic judgement of mass migration.

In summary, the current proliferation of automation and the increase in productivity will not only depend on the qualification of the available workforce but also on public opinion. According to Frey, the success of automation always depends on the society in question; the wrong approach may result in a society lagging behind or missing out on innovation and development. It may also have a detrimental effect on employment because higher productivity will threaten existing jobs only without generating new jobs. The more undereducated people there are in the economy, currently the lower the wage-related pressure for innovation; demand for highly trained people goes up with digitalisation, but due to the ample supply of cheap labour, innovation does not spread to jobs that are easier but still expensive to automate. The convergence started in Eastern Europe is based on rising wages and an emerging scarcity of labour – Hungary (15) and its neighbouring countries (Czech Republic: 9, Austria: 10, Slovenia: 12) are among in the TOP15 in terms of economic complexity ranking list (ECI).25 In the interest of our future, these issues should not be addressed via (uncontrolled) immigration but through innovation, and naturally with (artificial) intelligence. The real question is whether Europe is already prepared for these developments.

 

 

NOTES:


1 Cocco, Federica–Wheatley, Jonathan–Pong, Jane–Blood, David–Rininsland, Andrew (2019). “Remittances: the hidden engine of globalisation”. Financial Times. Available at: https://ig.ft.com/ remittances-capital-flow-emerging-markets/.

2 OECD. “Development aid stable in 2017 with more sent to poorest countries”. Available at: https://www.oecd.org/newsroom/development-aid-stable-in-2017-with-more-sent-to-poorest-countries.htm.

3Migration and Remittances. Recent Developments and Outlook (2018)”. Migration and Development Brief 29. World Bank Group–KNOMAD. Available at: https://www.knomad.org/ sites/default/files/2018-04/Migration and Development Brief 29.pdf.

4 Manyika, James–Chui, Michael–Miremadi, Mehdi–Bughin, Jacques–George, Katy–Willmott, Paul–Dewhurst, Martin (2017). “Harnessing automation for a future that works”. McKinsey Global Institute. Available at: https://www.mckinsey.com/featured-insights/digital- disruption/harnessing-automation-for-a-future-that-works.

5 PwC. (2016). “Sizing the prize. What’s the real value of AI for your business and how can you capitalise?” Available at: https://www.pwc.com/gx/en/issues/data-and-analytics/publications/ artificial-intelligence-study.html.

6 Frey, Carl Benedikt–Osborne, Michael A.–Holmes, Craig (2016). “Technology at work v2.0. The Future Is Not What It Used to Be”. Citi - Oxford Martin School. Available at: http://www. oxfordmartin.ox.ac.uk/downloads/reports/Citi_GPS_Technology_Work_2.pdf.

7 World Economic Forum (2018). “The Future of Jobs Report 2018”. Available at: http://www3. weforum.org/docs/WEF_Future_of_Jobs_2018.pdf.

8 Lovaszy, Laszlo. (2016). “Fogyatekossa tesz-e minket a mesterseges intelligencia?” [Does artificial intelligence make us disabled?] Portfolio. Available at: https://www.portfolio.hu/gazdasag/20161203/ fogyatekossa-tesz-e-minket-a-mesterseges-intelligencia-240877.

9The Triple Revolution”. From International Socialist Review, Vol. 24, No. 3, Summer 1964, pp. 85-89. Transcribed & marked up by Einde O’Callaghan for ETOL. Available at: https://www.marxists.org/history/etol/newspape/isr/vol25/no03/adhoc.html.

10 Frey, Carl Benedikt (2019). “The Technology Trap: Capital, Labor, and Power in the Age of Automation”. Available at: https://press.princeton.edu/books/hardcover/9780691172798/the-technology-trap.

11 McKinsey Global Institute. (2016, updated 2017). “Technology, jobs and the future of work”. Available at: https://www.mckinsey.com/~/media/mckinsey/featured per cent20insights/Employment per cent20and per cent20Growth/Technology per cent20jobs per cent20and per cent20the per cent20future per cent20of per cent20work/MGI-Future-of-Work-Briefing-note-May-2017.

12 Tractica (2019). Artificial Intelligence Market Forecasts. Available at: https://www.tractica.com/ research/artificial-intelligence-market-forecasts/.

13 European Investment Bank (2018). “Investment Report 2018/2019: retooling Europe’s economy–Key findings”. Available at: https://www.eib.org/attachments/efs/economic_investment_ report_2018_key_findings_en.pdf.

14 Nature (2019). “The top 10 academic institutions in 2018”. Available at: https://www.nature. com/articles/d41586-019-01923-y.

15 Hoffower, Hillary (2019). “Kids in the US and China have starkly different goals, as revealed by a survey that asked them if they’d rather become astronauts or YouTubers”. Business Insider. Available at: https://www.businessinsider.com/american-kids-dream-of-being-youtube-influencers-instead-of-astronauts-2019-7.

16 McKinsey Global Institute (2016). “Poorer than their parents? Flat or falling incomes in advanced economies”. Available at: https://www.mckinsey.com/~/media/McKinsey/Featured per cent20Insights/Employment per cent20and per cent20Growth/Poorer per cent20than per cent20their per cent20parents per cent20A per cent20new per cent20perspective per cent20on per cent20income per cent20inequality/MGI-Poorer-than-their-parents-Flat-or-falling-incomes-in-advanced-economies-Executive-summary.

17 Kharas, Homi (2017). “The unprecedented expansion of the global middle class”. Global Economy and Development program at the Brookings Institution. Available at: https://www.brookings.edu/ wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf.

18 Futurism (2017). “Bionics: The Astonishing Future of the Human Body”. Available at: https:// futurism.com/images/bionics-the-astonishing-future-of-the-human-body.

19 Lovaszy, Laszlo (2017). “Innovation has changed the meaning of rehabilitation”. EuroScientist Journal. Available at: https://www.euroscientist.com/innovation-has-changed-the-meaning-of-rehabilitation.

20 Medical Xpress (2017). “Biomedical engineers connecting a human brain to the internet in real time”. Available at: https://medicalxpress.com/news/2017-09-biomedical-human-brain-internet-real.html.

21 The Economist (2019). The stockmarket is now run by computers, algorithms and passive managers. Available at: https://www.economist.com/briefing/2019/10/05/the-stockmarket-is-now-run-by- computers-algorithms-and-passive-managers.

22 Zara, Orsolya (2016). “Robo sapiens: A new legal person on the horizon?” EuroScientist. Available at: https://www.euroscientist.com/robo-sapiens-new-legal-person-horizon/.

23 The National Intelligence Council (2017). “Global Trends. Paradox of Progress”. Available at: https://www.dni.gov/files/documents/nic/GT-Full-Report.pdf.

24 Adam, David (2019). “What if aging weren’t inevitable, but a curable disease?” MIT Technology Review. Available at: https://www.technologyreview.com/s/614080/what-if-aging-werent-inevitable-but-a-curable-disease/.

25 OEC. Economic Complexity Rankings (ECI). Available at: https://oec.world/en/rankings/country/eci/.

 


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