The Future, This Week 07 Apr 2017: climate change, technology impacting productivity and more
The. Future this week simply, business inside do we introduce ourselves I'm Sandra Peter I'm Kyrie Moe once a week we're gonna get together and talk about the business news of the week there's a whole lot I can talk about okay. Let's do this. Today. In the future this week can, we fight climate change by moving to the city does technology make us less productive, and cyborgs. I'm. Sandra, Peter I'm the Director of Student Business inside I'm. Kai Reema I'm professor. Here at the Business School I'm also the leader of the digital, disruption research, group so, Kyle what, happened in the future this week our first. Study is published, in motherboard. Titled. Want to fight climate change move. To a city it's, a story from the US which, quotes, data that shows that the average New York I'm it's 30% less, greenhouse gases, than any other American, the article makes the argument that, climate. Change is brewing and we're all looking for ways to reduce. Our, footprint. On the environment and. The. Solution, claimed, here is to live in a dense City because. People, in cities like New York they walk they bike they, take mass transit they take up less space they. Live in smaller apartments and. Therefore they use less energy than, their, suburban counterparts, so, if we think about the, opposite of density, that would be urban sprawl, where we have these centers, that, are far from let's say the CBD, where. People not only have to travel back and forth to go to work but we also have to transport, goods we have to make services, available we, need hospitals. Out there we need supermarkets. We need shopping, centers, so, living, in the densely populated city, would also help with having more land to do agriculture, other, productive, things there would be lower costs, for infrastructure. But there would be lower emissions, associated with, transport, of every single kind less congestion, and so on and so forth and less air pollution also, it makes the point that not, everyone can live on an acreage block there's just not enough land, so. Is this, the solution that we all move to the city for, let's note, that this is really not a new idea, Australia, has a claim to fame here a couple of Australian, researchers, Newman and Kenworthy, in the late, 80s, famously, developed, this relationship, between higher density, and lower, transport, related energy. Consumption, in world cities cities, like Singapore, or London have been pointed out as cities that high urban density and, also low transport. Related energy, consumption, and at the other end we have cities like Houston or, like Phoenix, Detroit, that have large urban, sprawl, does this work every time is one question so some big cities have experienced, problems with high-density, cities, like Mexico, City or Beijing that have very high pollution, that struggle to keep on top of the waste that the garbage that that's being produced by these cities yes it, says so in the article, and the article also, points out that if this were to work houses.
In Cities would have to become much more energy. Efficient we would have to invest in insulation. As well but, to me that points to a bigger problem which, is that, we should invest, in more, energy in efficient. Building standards, insulation. As such in general. Which then, would, also make houses, in the country and in the suburbs, much, more energy efficient, so, to. Me this argument, is a little bit flawed because it, seems, to make a particular ceteris. Paribus, argument. Which means that all things, equal if everyone, moved to the city now which, is not feasible we. Would make inroads, towards fighting climate change but. I think what, we should be doing instead is, increase. The standards. For, building. Houses insulation. And also towards. Electric, cars because, the most problems, from, living in suburbs come, from the pollution we create, from. Transport and cars having, to take the cars to work for, shopping and everything and. Also by losing so much energy in cooling, down in summer, or heating. Our houses, in winter when, insulation, is, really substandard. In Australia, in places, like America when compared, to Europe, where, the article quotes. The Passivhaus, Institute. Standards, which show that you can have houses that are, six percent more energy efficient, for heating and 46 percent energy-efficient, for cooling by, making them passive, by going, to electric heating solar, photovoltaic. Water. Heating, in all these kind of technologies, that we have at our disposal, so. It is more, a willingness, to invest in those technologies, which would solve the problem by, and large which, then would take away, in my view the advantage, that high-density, city living hairs over urban. Sprawl the problem, there is mainly, from the substandard, building, materials. That we generally, use them, from, the, density as such at, this point we still have the transport, problem and the transport related energy, haven't solved this but as all, moving to the city is probably. A solution, that is far less feasible, then moving, to electric, cars that, we then feed from, the, solar on, our rooftops, which, is a technology, that is just. On the cusp of becoming available, so I think this will be a much better solution to, the urban, transport. Problems, than it might be to move closer to the city which, in, fact, does not really work does it in places like Sydney, and we're seeing this today yes, Sydney's still struggling, quite a lot with transport today I think the article also points to this problem that you've touched upon that not all density, is the same kind of density, we, tend to think of density, as an average density across the city which is actually, quite hard to measure and we, tend to use it to support arguments. Well how about we have these urban, villages, we, haven't managed to build them yet just like we haven't managed to make high-density. Work in Sydney so even though a lot of theoretical. Arguments, have been made for things like polycentric, cities, with urban villages, there is no City actually that functions, under that model at the moment also. Brings up the question of what, else is density, good, for so. Reducing. Climate change yes that could be one argument, but what about the relationship between density, and human, capital or the relationship, within density, and productivity, couple, of studies published, in 2012. The, economies, from the Federal Reserve Bank of New York and University. Of Georgia, and/or I have. Talked, about the relationship between density. And productivity. And this is actually not quite so simple we tend to treat all cities, as the same but, apparently, if you're looking at the effect of productivity, on places. That have got low human, capital, density. Is actually very counterproductive, and it could have negative effects so density could be actually economically, detrimental. If however, you look at density in, places, which, rely. On information. Or finance, or arts and entertainment or. Professional, services that with the high premium on things like creativity, or sharing, ideas then, you have a positive effect from high density, so how can we think of density. In just one area yes, not all density. Is equal and what.
I Would like to bring up is a, model, that is called value capture whereby. Cities. Develop, for, example, their transport. Corridors, with. The, help of private. Developers, who. Are given the rights to develop the. Land around. And on top of major, train. Stations, for example, it's, called value capture because the private developer gets to capture, the value from developing, those, dense, centers, on top, of those transport, corridors, however. It is not clear that these, centers, that we create actually. Providing. Good, quality of living especially, when, the developers, build them in such a way that they discourage, people to ever leave those centers so, that people do all their shopping or their entertainment. Everything, within those centers, people have looked at what these value. Capture developments. Look like in places, like Asia and have found that they create a quite, depressing. And dystopian, quality. Of living because. They do not come with the kind of productivity, effects, and employment. And things like that they're merely there to capture, the consumer. And discourage. People from spending any of their money elsewhere hence, the name value capture so I think we need a much more holistic thinking, about the, ways in which we make cities. Sustainable. Worth, while living in that, create wellbeing for people, and the kind of productivity. That we want. From tying, in places, to live with places, to work and speaking, of productivity, our. Second, story of the week refers. To our, failure. To become more productive so. This story appeared. In the independent, in the UK, it states that productivity in, the, last decade, has been dismally, low and, it, asks can advances, in technology, actually, explain why such technology, to blame for low. Productivity, the, article quotes some numbers it says that productivity. Increase, was just 1% in the u.s. 0.5%. In, Germany, 0.2%. In, the UK and Australia would, sit round about that figure, so, is. Technology actually. A, Productivity, killer, well. Some. People would say yes so one side of this argument and this would be people, like Northwestern's, Robert Gordon with his famous book the rise and fall of American.
Growth Who says that well actually the, technological, improvements, we have today do not compare, to what we previously, had, when we had huge rises, in productivity, so for instance when we brought about urban, sanitation or, we bought about electricity. Or the telephone or television, or even commercial, flight that, we do not have profound. Technological. Changes today and he. Claims that actually. The miracles, that underlay, the productivity. Of America, the beginning, and middle of this century cannot, be matched by technological. Advancements, like uber, or Facebook. Or Amazon they, will touch productivity. Lightly, if at all but they will not make a difference so are we using, Facebook, too much are we on social, media in the workplace are we wasting our time at work rather than to work is this a problem, here well, some, would argue actually. No, the problem is not with the technology, the technology is actually helping, so. Mi. T--'s Erik, Brynjolfsson, with. His co-author, Andrew, McAfee they wrote the famous book called the second Machine Age which talks about this huge technological, disruption, that we've seen over the past few years and they're, saying well actually we, do have this huge technological, breakthroughs, but what we don't have is everything. That came around the Industrial, Revolution things. Like investments, in a. The ways we reorganize. Work the policies, that we have in place to make this thrive as an ecosystem that. It's not about just, the technology and we are actually failing to measure what technology. Looks like so, he says well the core technologies, that are coming along things, that we've been talking about on the future this week artificial. Intelligence, or machine learning actually, can, and will create this changes, but only when we rethink. How we do education, how we organize, work and the policies, that we have in place if, we look back in history just, a couple of decades then, this, is not a new problem it came up in the 1990s. Under the so-called productivity. Paradox, when we. Invested, a lot into computer, technology, in the late 80s, in the 90s when, famously, the American, economist, Robert Solow said, you can see the computer, age everywhere, but in the productivity statistics. So. At the time the. Same Erik Brynjolfsson, did. An extensive, study into. This, phenomenon, and he, came up with a number of reasons of why the, increased. Investments. Into IT and computers, did, not show up in those. Productivity. Statistics. And the, first and main one was a Mis measurement, of outputs, and inputs so. If you take the. Investments. Into IT in the banking system for example and you, look at how input, and output is measured then, investments, in IT do not necessarily increase. Outputs, but lead to fundamentally. Different ways of doing things, take ATMs, ATMs. As a technology. Allow us to get our money very quickly, but it does not increase. The output that a bank teller which do so the bank teller might still be employed but, the, number of things that they do the number of transactions. That they do with customers, might actually decrease, so. In the, measurement, the output. Of the bank teller, decreases. Or productivity, goes down but. Only by, way of using, technology. To do things that the person would have done which, then leads to a time, lag in measurement, because what actually has to happen is a reorganization, of, the ways in which Ang's, or businesses, do their work but, also then equally. A change, in the way in which we measure input and output because, things, that were previously done by people might, now be done by technology. And those people do different things so we have to adjust our measurements, slightly so measurements, shortcomings, and as you've mentioned quite a few economists, have been pointing, these out even people like Joseph Stiglitz, have been pointing out that the fact that things like the Internet are fundamentally. Changing the way we assemble. Data or deliver services, simply, cannot be captured in the ways we traditionally, used to do this others, go even a bit further and saying well we shouldn't be measuring. Production, we should actually be measuring people's well-being so, we should have different ways. Of thinking about productivity. Altogether, which. Raises another question, about technology, and productivity.
This, Conversation. Makes the fundamental, assumption, that more, productivity. Is better. Yes, the argument is always that, productivity. Especially labor, productivity and. More. Output and growth will lead to better living, standards when. Those benefits, are distributed, across the economy and across society, so is, there a case for instance for banks, handing out more loans even if there are bad loans but they are handing out more loans for people who cannot pay them and we've seen a financial. Crisis as the result, of that but those banks have been more productive and if, we introduce. Technologies. Or different business models of ways of doing things where we give up less loans to people who can pay them are we, worse off in terms of productivity, which points to another problem a Productivity, measure is fundamentally, a quantitative, measure so, the argument, has been made that while. Technology. Might not necessarily lead, to more, quantity, and outputs it might lead to a very different quality in, the utility, of services, that we create in. The well-being of people in, the work conditions, that we create, in our workplaces, so, there are other effects, that might come from technology, that are not necessarily, related. To. Creating. More with, less so, thus technology. Have a productivity, problem no, I think it has a measurement problem in fact, I think we, have a measurement, problem. With productivity. More general we hear all of these calls, in the media, quite often that. We need to increase our productivity we have a Productivity, Commission that, looks into all parts, of our economic, life and how we can increase productivity so, productivity. Has become, kind. Of a panacea, for how we make, things better but, we often hear arguments. Such as in, order, to increase our productivity we, need to work longer hours and that, doesn't make any sense to me does it not that's, exactly, because, the. Way productivity. Is defined, if you work longer hours productivity. Goes down right, we, all know that we, can work productively, for a certain, number of hours, in fact there's been a study, recently by, the. ANU which says that on average. About 39. Hours is a good, amount of time to work during the week anything, you work longer productivity. Drops off sharply and, so does well-being, so, working longer hours actually. Decreases. Productivity. However. The, problem here is again with measurement, is in the detail because, if you do not actually count those extra, hours and include them in the equation then you do increase, output but.
If You're only counting the hours that someone, has in their contract, or not the hidden work that they might do after hours on paper. Productivity. Increases, but, it means that people start self exploiting. That, they chew into their spare, time by, doing extra. Work which. Benefits. The employer, benefits. Our statistics. Because, those hours, are not, included, in the statistics, I think we do have a measurement problem, with, productivity. All over the place as we move to an economy, that is more and more based on services, on professional, services, and people, and on technology. Productivity. Is a very, enormous. Ly tricky, concept. And we should be quite careful in how we use, it yes because, at, the national, level we often count GDP. And presumably, we can count this quite well but. If on the other hand we, include, in the input or we want to get to our labour productivity we. Have to count the numbers of hours work and that's, a much more tricky. Way to do you can do this in surveys, but you don't have to rely on people actually giving you the number of hours that they were not the number of hours that they got paid for for example that they have in their contracts, so, if we're not in a position to actually count the numbers of hours. Worked, and the input correctly, then we are in no position to actually measure. Productivity and, technology, would get shortchange, there as well because, a lot of the technologies, that we have are three technologies think, Google think Facebook, and so on Google, Maps these are technologies that again would show up in that free time that would never be counted anyway so productivity. Increases, from those free technologies, would not appear, no and the, other aspect, is that people can, now very, easily take, their work into their spare time on, their mobile devices, so they can, do work after, hours they can. Work, longer hours the, question is whether they are getting paid for those hours and whether those hours, and the output that is created, actually included, in those, statistics so. Maybe we're measuring output, too narrowly maybe the output should indeed be about well-being or that well-being in the context of sustainability. Speaking. Of productivity. And well-being our next story concerns, employees. Being injected with microchips. To become more, productive to. Open. Doors with their, hand and their microchip, that they have implanted, in their hands and to be at, work, si. Box so this story comes from futurism, com and it, talks about employees. That have an RFID. Microchip. The size of a grain of rice implanted. Usually, into a person's, hand or wrist and it's, the same kind of chip you would have implanted, in your pet and these, RFID, chips are really everywhere every time you swipe your card to get into your office, or you, swipe your key to try to get into your building, or you get on a train, and you use your opal card even, credit, cards have these chips so, now we could have them in people. So the article talks about a, company, called epicenter. So. I got a little bit uneasy, reading. The article, in particular about. The, way in which people seem to embrace, and celebrate, and, have those events. Where they could get injected, with those microchips. And the chip parties the chip party. And people. Saying this, is really good I want to be a part of the future and becoming, a cyborg, or having this thing, implanted, in my wrist really makes, me part of this so. That. Part I found slightly, disturbing, the, argument, about how, we become, cyborgs. I find, a little too obvious I think we. Are cyborgs, already, if a. Cyborg, is someone who is, entangled. With technology, who lives with and through technology in, the everyday way, why, would I only be a cyborg, once the technology actually, goes under. My skin, rather than be in my hand, shouldn't, it be about the effects, and are we not cyborgs, by way of being connected. To the Internet 24/7. Having. The smartphone, on our pillows the, first thing we check in the morning the last thing we check in the evening bumping. Into people in. The streets checking, our messages, or texting, having. Accidents, in our cars our cars are, being connected and wrapped in technology, sensors. Everything, I think we have become cyborgs. Already, the, idea that, we only become, cyborgs, once we actually have things in our bodies, in my. View is just based, in a false philosophy. Which puts too much emphasis on, the physical attachment. Of things to our bodies I think we are already cognitively. We are cyborgs, and we have become, cyborgs, at least in the last 10 years with the advent, of mobile technologies. I think it's culturally. Such a strong, barrier once it gets under, our skin, literally. That, we struggle, with this idea and the, news that a company, might do this and it's about the epicenter, in the stock on that a company, might do this is so, outrageous and, we see that's such an invasion of our privacy even.
Though The wearable. Devices that most of us have or indeed our phones as you mentioned do so much more than, what these chips could do to, me it also seems interesting, that the, embedded, technology. Seems to move actually, very, slowly and I think it is that cultural, barrier the, exact same story about epicenter. Stockholm. Employees, using the microchip, to open doors and use photo copiers, and so on came, out in 2015 the BBC, coverage interests, Business Times covered, it with, the exact, same data so, it's been two years since then but the conversation, hasn't moved at all I agree, with you I think it makes for great headlines, and it is something that captures. People's, imagination and. It, disgusts. People or it is a stand-in. For the future, itself, but, I think it's a distraction I think the argument, that we become cyborgs, by way of having things, in our bodies, is a distraction, from the fact and, the, effects. Of technologies. In our everyday lives the way in which technology already shapes. The way in which we interact but. Also the way in which we see ourselves and. The, way in which we see our environment, and act in the world for example, the way in which we drive our cars with GPS, has changed, the way we navigate, has changed, the way in which we understand, our environments. Has changed, to what we pay attention to, or. Take Instagram, people, who Instagram, they will see the world as Instagram. Abou instances, they would go to coffee shops and cafes and they will look out for Instagram. Herbal pieces. Of food or scenery. Meaning. That once, you are part of a community that uses technology, in a certain way you already start, seeing, the world in different ways I think, that is already, something, that we could call a cyborg. In practice, well, in that case maybe, microchips, are a step back RFID, technology. Only, can do one thing and it's transmitted. A number to someone who can receive it whether it's our photocopier, or our door or indeed our car but those technologies, obviously might become more sophisticated I think, we can learn from the mobile technology, mobile phone example, that we, really become cyborgs, once we forget. About those technologies. They become so everyday so normal that we just use them so, they become part. Of us whether they are under our skins, or in our hands, or otherwise, attached, to us doesn't. Really matter in my view the, moment in which technology becomes, so backgrounded that we take it for granted they. Become part of us and that. To, me is the definition of a cyborg I think, we are scared of when we become cyborgs, without, us wanting, to yes we still choose the technology, that we have at this point whether it's our wearables, or our mobile phones and at this point our RFID, tags but what if someone else should decide that we need one yeah no you should have one but also do, we actually freely. Choose or is, it not that sometimes, we just don't have any choice if you, were to work in a company where, it, is normal, to embrace having a chip in your hand you. Don't necessarily, want, to be the only person, standing, apart, and not having the, microchip, similarly. Can you abstain, from using iPhones. And devices. On, which you can listen to the future this week I. Know. That's, my point, so the, choice of, whether. Or not we want to become. Cyborgs. Is increasingly, made for us what, we of course are, concerned, about is when.
Governments. Decide, that certain groups of people need, to be microchipped, so that they can be identifiable. Be it for seemingly. Good reasons, in health care or be it other, more sinister reasons, I think the, question, of choice and to what extent, we do want to become cyborgs. Is an ethical one that we, will probably have to come back to in the near future and explore in more detail, I think that's all we have time for today thank, you very much for listening see you next week. This. Was the future this week brought to you by Sydney, business insights, and the digital disruption research, group you, can subscribe to this podcast on, the soundcloud, itunes. Or wherever you get your podcast you. Can follow us online on Twitter and on ticket for if you have any news you want us to discuss please send them to SBI. At, Sydney, or edu. You.