IEEE Spectrum April, 2011 - 8

Jobless
Innovation?

I

n a crisis, Americans always ask
technology to come to the rescue.
Military threat? Send in the drones.
Health-care scare? Declare war on cancer
and race for an AIDS vaccine. Energy
shortage? Harness the sun and wind.
So inevitably, when the United
States suffers from the highest levels of
unemployment since the 1930s, the call
for more technological innovation is
heard from all directions.
Yet doubts abound that the stubborn
Great American Job Bust won't be
cured by President Obama's insistence
that Americans "out-innovate...the rest
of the world."
The problem is a new pattern of
"jobless innovation." Exciting emerging
technologies simply don't require many
workers. Internet stars, such as Google,
Facebook, and Twitter, employ far
fewer people than the older tech titans.
Silicon Valley, which remains by far the
most fertile innovation cluster in the
world, has experienced sharp declines in
employment. The U.S. Bureau of Labor
Statistics found in 2010 that technoscientific employment fell by a staggering
8

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19 percent over the course of the decade
and that average wages in Silicon Valley
also fell, by nearly 14 percent.
The trend toward jobless innovation
in Silicon Valley provoked Intel cofounder
Andy Grove to complain last year that
"the U.S. has become wildly inefficient at
creating American tech jobs" and that
there is "misplaced faith in the power of
[tech] start-ups to create U.S. jobs."
The jobless-innovation phenomenon
results, in part, from globalization.
Breakthroughs made in the United
States are increasingly scaled up in Asia,
robbing the country of expected employment benefits, says Grove, and important
innovations are arising offshore, too.
Scholars have labeled this development "offshoring of innovation." They
point to a marked rise in R&D activities
in China and India and other rapidly
growing economies. Offshoring creates
a significant drag on U.S. employment.
A new book, The Global Auction: The
Broken Promises of Education, Jobs, and
Incomes, argues that there now exists
an ample pool of "cheap brainpower"
outside the United States, largely in
low-wage countries, with predictable
effects on the U.S. labor market.
With so much R&D now occurring
in India, China, and other parts of Asia
(and also in Brazil, Russia, and South
Africa), new graduates of science, math,
and engineering programs in the United
States experience "career uncertainty,"
reports Ron Hira, a professor of public
policy at the Rochester Institute of
Technology, in New York. In response to
poorer job prospects, Hira has found an
"astounding" decline in undergraduate
computer-science enrollments, for
instance, suggesting to him that a
supply-side approach to employment-
producing more graduates in computer
science-may produce only more
unemployed computer scientists.
Applying more technology to cure
the jobs crisis carries another paradox.
Many emerging technologies destroy
jobs, in a process that the Austrian
economist Joseph Schumpeter famously
labeled "creative destruction." That
innovations destroy jobs as well as create
them challenges a major assumption

behind the United States' secular faith,
calling scientists and engineers to the
rescue of society. Faith in the bounty
of technological innovation is central
to American optimism, a bipartisan
doctrine. "We are the nation that put cars
in driveways and computers in offices;
the nation of Edison and the Wright
brothers; of Google and Facebook,"
Obama declared in January. "In America,
innovation doesn't just change our lives.
It's how we make a living."
But when innovations undermine
livelihoods, fears of new technologies,
and especially automation, are understandable. Such fears have periodically
traumatized Americans. In the 1930s,
during the Great Depression, politicians
and even engineers openly worried that
the fruits of their labors might render
their fellow human beings irrelevant.
And in the 1950s the advent of mainframe
computers spawned a new anxiety-that
"machinery of the mind" would replace
people who did perfunctory mental tasks.
To be sure, automation scares
passed, and technology-driven job
growth in the 1980s and 1990s eroded
the credibility of pessimists. But ever
more powerful computer networks are
once more igniting paranoia. Observing
the humanlike reasoning abilities
of IBM's Watson, Fortune magazine
asked in February, "Will IBM's Watson
computer put your job in jeopardy?"
The unsettling scenario that
jobless innovation will coincide with
a wave of job-destroying innovation
stands as a stark rejoinder to technooptimists who openly espouse a
belief in technology to deliver full (or
greater) employment. The alternative to
promoting innovation no matter what is
tricky. How can Americans capture more
of the employment associated with jobexpanding innovations? They can start
by examining their faith in the traditional
equation of technological innovation with
healthy job markets. -G. Pascal Zachary
G. Pascal Zachary is a professor of practice
at the Consortium for Science, Policy &
Outcomes at Arizona State University.
A longer version of this article is available
at http://spectrum.ieee.org/jobless0311.
spectrum.ieee.org

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Table of Contents for the Digital Edition of IEEE Spectrum April, 2011
