INTERVIEW WITH Pippa Malmgren
(American economist, owner of H. Robotics)
“THE ‘DATASPHERE:’ WILL IT HELP US IMPROVE OUR SUSTAINABILITY?"
Technology or not technology is that the question? Today we are with Pippa Malmgren, an American policy analyst. She served as Special Assistant to the President of the United States, George W Bush, for Economic Policy on the National Economic Council and is a former member of the U.S. President's Working Group on Financial Markets. She is also a tech-entrepreneur, founder of H Robotics, which make aerial robotics (industrial drones). We discussed on the economic scenario, its emerging ‘signals, and the role Artificial Intelligence (AI) is going to play in our future: will it help us to overcome some of the most important ecological, economic and social crisis we are facing today?
INTERVIEW - (April 2018)
Subject: Technology, Artificial Intelligence, and their effects on sustainability
Thanks go to Ennio Baratella Gruber, Grazia Giordano
(writer and co-editor at Long Term Economy), Geetha Plackal
(Long Term Economy collaborator; GGA India) and Stephen Saunders
(Long Term Economy collaborator) for collaborating in making questions.
- In news, radio, papers, everywhere we can hear or read about Technology. And yet most of us are afraid of it. Is it a real threat? I do not think so…
- President Putin has said that Artificial Intelligence (AI) is the new frontier of geopolitics: those possessing the greatest AI Technology will dominate the geopolitical landscape.
- Artificial Intelligence (AI) will allow us to do newer and better things. It will not replace us. It will help us create new jobs more suitable to human beings… …Let computers do those boring jobs and let us dedicate ourselves to more creative activities.
- Become literate in technology! That means: use it, experiment with it, build it, understand and speak ‘code,’ the universal language of technology.
- We have ubiquitous sensors almost everywhere, on our floor, on the walls, on our desk, on our body. They constantly collect data. They feed into a kind of holographic data environment, I call it ‘the data-sphere...'
- In addition to data we must look for signals, hints from the future which are not yet evident in the data but that you can easily see with your own eyes.
- What are the skills needed by leaders in the 21st century? Are they different from the ones needed in the 20th century? The answer is yes! You need to be a lateral thinking, long-term visionary and social-responsible person.
1. Question: Welcome Pippa Malmgren, and thank you for being with us. You’re a well-known economist specialising in geopolitics and financial markets. What are the major factors/threats which are going to affect economic and social stability around the world?
There are many factors… But let me focus on one of them: ‘Technology.’ In news, radio, papers, everywhere we can hear or read about Technology. And yet most of us are afraid of it. Is it a real threat? I do not think so… It’s true, it is moving so fast and we cannot keep up with it. That makes us afraid, afraid of loosing our jobs, and loosing control of ever faster and more precise weapons. We do not see the positive aspects of Technology: automation and robotics for example can solve many serious problems, and even bring new occupations. AI in the weapon system can even save humans from self-destruction. We cannot ignore it either. President Putin has said that Artificial Intelligence (AI) is the new frontier of geopolitics: those possessing the greatest AI Technology will dominate the geopolitical landscape, in terms of weapon system and societal management.
AI and Technology represent a very important opportunity for the world. The problem is not technology itself. Ignorance is the real problem.
2. Question: You have invested a lot of time and money on the field of Technology, particularly on Artificial Intelligence (AI). Let’s go deeper in the matter. How this kind of technology is going to affect our economy and society? Will it make us jobless and totally dependent on it?
It will empower us! Artificial Intelligence (AI) will allow us to do newer and better things. It will not replace us. It will help us create new jobs more suitable to human beings. We are going to be more efficient and productive. Two hundred years of automation have resulted in near record levels of employment everywhere on the planet.
What about people who do repetitive work (e.g., the boring part of accounting)?
Of course, repetitive and boring tasks will increasingly be done by automation. People who do this work now will probably lose their jobs. But is this a bad thing? I do not think so… Let computers do those boring jobs and let us dedicate ourselves to more creative activities: a new business idea, a commercial activity, art or writing. People might not like change but robotics and automation will force us to do more important, more creative work. The advent of automation will compel us to face that choice and make a decision.
What about manual workers in India, China, Pakistan and so on?
Will we really ruin their life with the arrival of intelligent robots? Are we depriving them of their life-work? That’s ridiculous! Let’s free humans from manual labour and empower them to do more important, more fulfilling things. People say that a manual worker cannot do anything else. That is nonsense. They will need education and resources but they can use their latent and inate human capital more. No one wants to be lifting heavy boxes all their lives. Imagine if one or some of those people are in fact Einstein’s that we missed because we assumed they could not be educated. We all know someone who is brilliant but never had the formal education to support it.
Human beings are designed to do much more creative things. So let the robots lift boxes and bags and let’s invest in human capital. It’s cheaper, faster and easier than ever in history to give people access to education.
"In this new High Tech scenario,
we need to pay people to learn so that they can work"
3. Question: So people won’t loose their job as long as they educate and improve themselves? How can they do it?
That’s an important point. Time has come. We must invest in education. I am very confident that human condition is fundamentally one of curiosity and we should give half a chance to people who want to learn.
We often hear about a Universal Basic Income
. I’m not a big believer in it. We should not pay those who do not want to work. Instead, we need to pay people to be educated, we must incentivize people to continuously learn so as to do more creative jobs. Technology empowers individual talents. If you are an artist with a very unusual style you can get your product out into the world, and people can find you: the World Wide Web
make you connected. I want to convert the Universal Basic Income idea into a Universal Basic Incentive that pays people to learn.
4. Question: What are the sectors that will give more opportunities in the future?
The ones we don’t know the name of yet! Oure imagination shapes our world. Let’s quote Mark Twain: ‘The eyes cannot see clearly if imagination is out of focus.’ Sectors you couldn’t even imagine of 10 or 5 years ago have upset markets and shaped our society (think of marijuana momentum in some States of the USA. And crypto currencies and blockchain). So when you ask me which sectors…, I am very excited to say: ‘I have no idea!’
5. Question: What do you think about circular economy? Can technology and circular economy match in a positive cycle?
Circular economy is happening naturally. People are doing it without any government encouragement. As it become part of our culture, of course, technology can’t help serving it.
"Become literate in technology!
Take some risk, try many things, do not worry about career success.
Traditional careers do not work any more: the jobs are not there!"
6. Question: Let’s now give some advice. What do you think new generations should do to better adapt to a new economic scenarios shaped by the advancements in AI?
Become literate in technology! That means: use it, experiment with it, build it, understand and speak ‘code,’ the universal language of technology. Take some risk, try many things, do not worry about career success. You must excite yourself, ‘love what you do’. If you do, you will be good at it and people would pay you for that. Competance and success follow preference, so do what you prefer most. Traditional careers do not work any more: the jobs are not there! However, as Jeff Bezos from Amazon said, ‘our education is training people for a world that has already past.’
"We have ubiquitous sensors almost everywhere… They constantly collect data.
They feed into a kind of holographic data environment, I call it ‘the data-sphere.’…
It will by definition help us to improve sustainability.
It is how we will solve cancer and address many seemingly unsolvable problems."
7. Question: Let’s move on to the ecological matter. Can technology advancement and innovation help us become more sustainable?
Again, I agree with Mr. Bezos: there is no a single part in the world economy that won’t be improved by Artificial Intelligence. Technology shapes every aspects of our life. It makes it more efficient, smarter and show us things we have never seen before. It’s an entirely new dimension, a new reality. We have ubiquitous sensors almost everywhere, on our floor, on the walls, on our desk, on our body. They constantly collect data. They feed into a kind of holographic data environment, I call it ‘the data-sphere,’ a world more real than our reality, with more information, more precision compared to our own sensorial understanding of reality. We will better understand our world: it will by definition help us to improve sustainability.
8. Question: Of course, technology is not enough. What do you think are the other factors to improve our sustainability (social, economic and ecological)?
Invest in human beings and give them opportunities! Some people consider inequality unsustainable. I do not think so. The lack of mobility between high- and low-earning is the big problem. When I was younger, it was easier for hard-working people (even with no connections or higher education) to rise to the top and earn a lot. It also used to be much easier for those on the top to fall down in case of failure. Now there is a serious problem in the ‘elevator:’ we make a wide use of bailouts to stop the elevator from going down when people fail. Instead, we reinforce speculators at the expense of savers and the rest of society. We also stop the elevator from going up: I often ask chief executives in different sectors all over the world when was the last time they hired someone who wasn’t traditionally educated, an immigrant, a person from an under-privileged background and they always answer: ‘I do not hire this kind of person.’ Social mobility is a very important factor for stability and development.
9. Question: Let’s come back to ‘economy.’ One of your best-selling books is “Signals: How Everyday Signs Can Help Us Navigate the World's Turbulent Economy.” What is its main message? How to identify such signals?
Everybody wants to know what the future will look like; but, they look backwards at data to find out. Is it sufficient? Is the past the right window through which we can see the future? Not completely. In addition to data we must look for signals, hints from the future which are not yet evident in the data but that you can easily see with your own eyes. Let me give you a practical example: some years ago I said inflation was coming back. No data was giving any signals about that. So, how could I be so sure? There were clear signals in everyday-life, that is, dishes and drinks in restaurants getting smaller, while prices were still the same. I call it ‘shrinkflation.’ The result? Now we see inflation in the data, we see inflation in Germany, in Britain, in the United States, in China; it is hard to name a place in the world where you do not find inflation. This is the inflation you ‘see.’ But you can also ‘hear’ it… Let me give you another example. When I talked with managers, investors, banks, inside the office at a business table, we didn’t see any signals of inflation. When we went to the bar or to a restaurant what we talked about was: 1) the cost of education going up; 2) the cost of dinner going up. In other words they talked about inflation even though data didn’t show it. This is why I usually advise people: ‘open your eyes, open your ears. You can learn a lot of things data cannot tell you.’ Let’s also look at the signals!
What are the main signals today?
I see signals from inflation again. It will increase, not dramatically (not hyperinflation), but enough. Enough to force anyone to deploy his cash into the economy. For those who do not know, Inflation erodes the value of cash. In time of inflation, it is better to put your cash in properties and stock markets. Now we have a lot of cash in the system: government around the world have put something between 18 and 25 trillion dollars into the economy to save it and it is still there and it is going to end up in the real economy and in the equity market. That’s why I think that whatever the latest record-high in the equity market was, the new one will be 20 trillion higher.
10. Question: You are writing a book with Chris Lewis (to be published in September 2018): “The Leadership Lab: Understanding Leadership in the 21st Century.” How will the leadership in the future be?
We talks about leadership across every possible sector: political, military, business leadership. The first questions we ask to ourselves are: what are the skills needed by leaders in the 21st century? Are they different from the ones needed in the 20th century? The answer is yes! You need to be a lateral thinking, long-term visionary and social-responsible person. However, let me make a point: as our management guru ‘Peter Drucker’ always said, “You have to be profitable. But, beyond that, what is the social role of the organization? What purpose does it serve in society?” What kind of brand do you want to have is a critical question. Empathy, the ability to connect the dots, the ability to look across the landscape are all 21st century leadership skills.
11. Question: You wrote a book in 2015 ‘Geopolitics for Investors.’ How is geopolitics changing and how will it affects future investments? What are the emerging sectors?
Let’s give a look at the current scenario. I see public confidence in international relations decreasing. It is happening in the United Kingdom (where the public voted for Brexit); and the same is happening in other countries (see the case of Italy with the emergence of parties like M5S and Lega Nord which want to renegotiate the EU treaty). So the world system is changing. Also we have new competing ideas. China has created its own developing multilateral bank: the Asian Infrastructure Investment Bank (AIIB): a competing institution to the world bank. The AIIB finances the Belt and Road Initiative, that is the biggest infrastructure build up in modern history. It is a massive project involving the building of ports, airports, railways and other infrastructure, all over the world, not just in Central Asia; it is a project that connects China to the world. That is going to dramatically change the landscape in geopolitics.
But let me add another thing. In old days we used to say: ‘whoever control the high seas is the winner in geopolitics.’ In recent years we used to say: ‘whoever control particular land masses like the Middle East or strategic points like the Suez Canal, is the winner.’ Now we say: ‘whoever has the data wins!’ Data is the new oil in geopolitics.
12. Question: Finally, some western economies (i.g., Italy, Greece, Spain) have been experiencing economic difficulties. At the same time, South Asian Countries are experiencing better economic growth. These latter are also trying to pursue a more inclusive, horizontal social economic model. Is that path the correct one for economic, social and ecological stability?
Ok, that’s a very big question. The USA is going well; Despite Brexit, the United Kingdom too is doing very well. Other countries are not performing very well. You’re are right. Inclusiveness is an important objective to pursue. But how can we do that? A universal learning mechanism, paying people so as to get them learn is crucial in that. There are two methods by which a country can increase ‘economic’ inclusiveness:
1) Increase democracy of opportunities (that is the American approach – failure as well as success is part of our society).
2) Greater democracy in the outcomes (That is the European approach).
Which is the correct one? To answer this question we should leave the field of economy and enter that of philosophy.
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