Fourth industrial revolution worse than the first, says economist
Bank of England's chief economist warns digital revolution could bring large scale job losses
The chief economist of the Bank of England has warned that the loss of jobs and social upheaval of the fourth industrial revolution will be at least as bad as the first industrial revolution.
Speaking on the BBC's Today programme, Andy Haldane said that the fourth industrial revolution would see people losing jobs to machines that could ‘think' and ‘do', compared to the simple automation of manual tasks that characterised previous industrial advances.
Haldane said: "Each of those [industrial revolutions] had a wrenching and lengthy impact on the jobs market, on the lives and livelihoods of large swathes of society.
"Jobs were effectively taken by machines of various types, there was a hollowing out of the jobs market, and that left a lot of people for a lengthy period out of work and struggling to make a living.
"That heightened social tensions, it heightened financial tensions, it led to a rise in inequality. This is the dark side of technological revolutions and that dark-side has always been there.
"That hollowing out is going to be potentially on a much greater scale in the future, when we have machines both thinking and doing - replacing both the cognitive and the technical skills of humans."
The first industrial revolution began in the UK in the mid-1700s to mid-1800s, marking the first widescale use of machinery to replace humans. While there were eventual benefits in terms of increased average income and standards of living, the ‘revolution' was also characterised by long periods of mass unemployment in certain sectors, deprivation, starvation, social unrest and rioting.
Haldane said that in the fourth industrial revolution, job losses are likely to be even greater in scale than in previous revolutions, and that there is also a risk of long-term unemployment on a large scale, as people become ‘technologically unemployed'.
While job losses would be compensated for eventually by the creation of new jobs, it is hard to make an accurate estimation of whether the number of new jobs would be adequate to compensate for losses. Haldane said that economies need to learn the lessons of the past and ensure that people are given adequate welfare support and technological training to take on new jobs.
"We will need even greater numbers of new jobs to be created in the future, if we are not to suffer this longer-term feature called technological unemployment," Haldane said.