The Bank of England may be moving toward an interest-rate increase, but Governor Mark Carney has even more global topics on his mind.
Less than a week after comments that addressed climate change -- albeit from the financial stability point of view -- Carney used a speech in Toronto to address the impact of technology and how workers and the very social structure of the developed world needs to adapt.
He said there are a lot of “routine cognitive jobs,” at risk, in what he termed a “massacre of the Dilberts” -- a reference to the satirical American comic strip about office workers.
Technology and the fourth industrial revolution are having untold impact, he said, and it’s going to take huge efforts to make sure workers ultimately benefit. The effect of automation is just one part of the change and examples of the seismic shift can be seen in finance, where many “unglamorous” data entry jobs have already been transformed.
Drawing examples from his own experience, he said the disruption to the labor force will be intense and could last for some time.
“When I look back 30 years ago, what I used to do it in the City of London when I worked at an investment bank, probably about three-quarters of what I did is now done by machine. It is a relentless process of moving a series of decisions that are made by humans to machines.”
While ultimately there will be a benefit to workers from increased productivity, Carney said that will require imaginative solutions by companies, governments and policy makers in terms of training and social change.
“Get a grip on the scale of the problem. Assess and address,” he said.
Carney added that part of the solution could require major social change, with workers having to extend or return to education in later life to prepare themselves for the new world of labor. He acknowledged that wouldn’t be simple, when many people will have mortgages and other financial responsibilities, and added that up to now not everyone is getting training right.
As for Carney himself, he is set to step down the BOE governor in June 2019. Asked what the future holds for his own future in the workforce, he replied that he too will need to find a job and retrain.