Delegates at the World Economic Forum this week will be talking about the implications of the ‘Fourth Industrial Revolution’. The claim is that this revolution is characterised by the combination of different technologies, linking the physical, digital, and biological worlds. Could a future Labour party conference consider the implications of this development for Labour policy? Hard though that might be to imagine, in any event policymaking does need to take into account human creativity, innovation and, well, progress.
The rate of technological innovation is startling, as is our ability to deal with it most of the time with relatively little disruption. However, recent developments have seen technology used in areas of life where we may not have previously considered it to be relevant and this can be challenging. To generations used to owning and driving their own cars, the prospect of a car which drives itself maybe somewhat disorientating, but it is not too difficult to imagine that such transport could become ubiquitous in a few years if current prototypes can be improved upon. Some office-based work could soon be automated, presenting a redundancy threat to a skilled section of the workforce. Potentially most interesting is the influence technological innovation may have on health and long-term care.
Policy discussions on the left often focus on the ageing population. This, it is believed, will place enormous strain on the public finances, requiring difficult spending and tax decisions. For some this is an argument for spending less now to get debt down before it will rise again as healthcare and long-term care costs rise. This is a valid concern. The Office for Budget Responsibility projects that public spending as a proportion of GDP will rise over the next 50 years primarily due to the population getting older. Age-related spending is projected to rise from around 20 per cent of GDP to over 23 per cent. Within this projection, the share of GDP spent on long-term care doubles over the period, to 2.2 per cent and healthcare spending also increases. The challenge is immense when considered in practical terms. Councils are struggling to pay care costs today, particularly with cuts to funding from central government. Our care home sector has a patchy record. The NHS is under strain even though spending has increased during times of ‘austerity’. When the increasing needs of an ageing population are considered as well, what grounds for optimism can there be?
There can be some grounds for optimism if innovation is promoted and allowed to flourish in these sectors. For example, technological change is such that robots are already being trialled in care homes in Japan and Italy. The results so far seem to be encouraging. Robots assist the elderly in walking around their care centre, so saving staff time. The responses of both residents and staff seem to have been positive. It will not be long before robots are designed to perform more sophisticated tasks, such as lifting, which can place strains on staff, or more nimble operations. But these will not be simple machines; they will be able to interact with people and adapt, pretty much in the same way as our phones operate today. Similar innovations will be possible in healthcare. If technological development was combined with improved management and some genuine entrepreneurship in this sector, for example figuring out how to deliver a large number of high-quality care homes at reasonable cost, the benefits could be immense.
We are not there yet but a good question is whether we want to be. Technological change can threaten jobs, though it can also open up previously unimagined opportunities. The challenge is to guide the innovation to ensure the benefits are fairly spread and to provide employment opportunities when jobs are threatened. But another challenge is whether we ourselves will change and in ways we find undesirable. The need for human company and human touch is so important. Already we are risking dispersing friendship with others rather than deepening it. The care sector in particular needs to celebrate and protect human dignity, rather than undermine it. Yet that does not mean we should continue with 20th century models of care, which can be far from perfect.
What will the cost of health and long-term care be over the next 50 years? We cannot know. It is impossible to accurately forecast technological innovation and that is why, when technological change begins in a sector, policymaking can be so difficult. Moreover, the economy is not static. Increasing demand for health and long-term care will put upward pressure on costs but as it does so, innovation will be encouraged, unless government prevents it. New inventions will be created and new ideas will be tried. For this to happen under a Labour government, the party needs to understand that we do not encourage enterprise and business to just provide jobs and pay taxes to fund the public sector. It is more complicated than that. Direct government funding for science and technology is essential, but we must also ensure we have a dynamic economy with the right incentives to encourage creativity and innovation across our society.
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Stephen Beer is chief financial officer at the Central Finance Board of the Methodist Church and a former chair of Vauxhall CLP. He blogs at stephenbeer.com This article represents his personal opinion.
This piece forms part of today’s guest-edit of the Progress site by Stephen Kinnock MP, covering the discussions at Davos on the economy, business and the World Economic Forum’s central theme this year of ‘The Fourth Industrial Revolution’. Follow the guest-edit today here
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