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New Waves of Tech Innovation Could Boost Economy
How the Internet of Everything can help unlock the human potential of unemployed and underemployed workers.
October 21 , 2013
The U.S. and other developed countries are struggling with slow growth, leading to stagnant living standards and large pools of unemployed and underemployed workers. But as in the past, new waves of technological innovation have the potential to lift growth. One such innovation wave is the Internet of Everything.
In the September (2103) policy memo I did for the Progressive Policy Institute, “Will the Internet of Everything Bring Back the High-Growth Economy?”, I reviewed several recent studies, and concluded that the Internet of Everything:
….could raise the level of U.S. gross domestic product by 2%-5% by 2025. This gain from the IoE, if realized, would boost the annual U.S. GDP growth rate by 0.2-0.4 percentage points over this period, bringing growth closer to 3% per year. This would go a long way toward regaining the output—and jobs—lost in the Great Recession.
The policy memo was picked up by the widely read economics blog Marginal Revolution, by Inc.com, which explained how “The Internet of Everything Could Boost the Economy," and by Venture Beat.
Especially important was the possibility of using the Internet of Everything to make worker training more efficient. The report noted that:
The Internet of Everything also has the potential to completely transform the training of workers. Because one essential feature of IoE is better feedback loops between things and people, it becomes easier to build worker training right into the equipment itself.
Picking up on this idea, the thoughtful Reihan Salam wrote a piece for National Review Online entitled The Internet of Everything and On-the-Job-Training. Salam observed that “[t]he idea of technologies that can actively guide us to become more productive is an attractive one.”
For example, imagine a“connected basketball” with sensors built into it. Such a basketball could help players learn the right form for dribbling and shooting, giving them immediate feedback on how to improve.
The gain is that the system could provide the same feedback as a skilled coach, at a fraction of the cost. The net result would be an increase in the number of young players with sound fundamentals.
In a similar way, the IoE can alter the underlying economics of worker training for a wide variety of jobs that need a combination of physical and cognitive skills. The problem now is that on-the-job training is very expensive for companies, since they have to pay experienced trainers as well as the new workers. As the policy memo notes:
If on-the-job training could be made much cheaper and more efficient with the IoE, then it would be easier for companies to justify hiring unskilled and semi-skilled workers. The U.S. would be able to chip away at the pool of unemployed workers and raise the skill level of the workforce.
Some companies are already pursuing a related idea, using games and other tools to assess the aptitude of potential workers (see, for example, a recent article from Bloomberg entitled Machines Gauging Your Star Potential Automate HR Hiring).
This ‘automation’ of the training process is especially important for the long-term personnel needs of the health care system, which requires a large number of skilled workers who can deal with both ever-changing technology and the complicated processes of dealing with people.
The Internet of Everything would release health care workers from rote tasks, while improving their training and productivity. The second part—the use of the IoE to improve training and extend it to more people—is as important as the first.
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