Jobs were reportedly the No. 1 agenda item at yesterday’s conclave of tech industry royalty and Donald Trump, and that simple fact should send a message to all leaders. Ostensibly the issue was the relatively few Americans employed by many of the biggest, most valuable tech companies. But the larger issue, the real issue, is how technology will affect employment across the economy as machines do ever more tasks not just faster and cheaper than humans do them, but also better.
Consider: the president-elect of the world’s largest economy wanted to talk with tech industry leaders not about the miracles that technology makes possible or how it could be used in government, for example, but about its affect on jobs – and this at a time when the U.S. unemployment rate is a microscopic 4.6%. That’s a sign of things to come. Though unemployment is low, Trump was elected with heavy support from areas where jobs are scarce. While many of those voters seem to think free trade is to blame, the reality is that advancing technology is at least as important; for example, manufacturing jobs are declining even in China, where many of those vanished American jobs supposedly went. More broadly, employment insecurity is becoming a central issue for all voters, including those who are employed.
All business leaders need to think about where their company fits into a world like that. Not long ago I asked a CEO and a former CEO from major manufacturing companies if they thought it was possible that advancing technology might cause a net reduction in jobs, contrary to the pattern that has prevailed through history. They both gave the same answer, on background: A year ago I would have said no, but based on what I see happening in our company now, yes, I think it’s possible.
Publicly, leaders are responding in various ways. Apple’s Tim Cook, who was at yesterday’s meeting, is reportedly considering investing $1 billion in a fund organized by SoftBank’s Masayoshi Son, who met with Trump last week and said the fund would create 50,000 U.S. jobs. IBM’s Ginni Rometty, also at yesterday’s meeting, noted in an op-ed article Tuesday that over a half million jobs are open in the U.S. tech sector, unfilled in part “because the nature of work is changing” and many candidates lack the needed skills; she outlined IBM’s extensive efforts to help train young people in those skills.
Unresolved is the main question of whether technology overall will increase or decrease net jobs. Economists are divided on the issue, a first in the history of the economics field; until now, new technology has always increased total employment. Even with that question unanswered, job requirements may now be changing so fast that many workers won’t be able to keep up.
In that environment, voters will demand that politicians take action, as the Trump phenomenon shows, and business leaders probably won’t like what politicians of either party do in response. Organizing an effective response to employment insecurity will be among the most important tasks that business leaders face in the decade ahead.
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What We’re Reading Today
Yahoo discloses billion-account hack
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NBA and union settle
The National Basketball Association and the National Basketball Players Association agreed to terms a day before the period to opt out of the previous deal ended; players would likely have opted out if no new agreement had been reached. It’s a win for the players, whose average salaries are expected to rise from $5 million to nearly $9 million. The upside for commissioner Adam Silver is avoiding a lockout as the league’s popularity reaches new heights. ESPN
Uber’s self-driving cars in San Francisco hit a snag
Travis Kalanick‘s company launched self-driving vehicles in San Francisco this week; they’re already being tested in Pittsburgh. But California officials say Uber needs a permit. Uber disagrees, noting that a driver is always at the wheel. Fortune
China places weapons in the South China Sea
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Building Better Leaders
A simple rule for raising money from investors…
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To be a great leader, show vulnerability
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As the holidays near, the urge to relax kicks in
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Darren Woods will lead Exxon
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Fed Chief: I intend to serve
At the press conference following the Federal Reserve’s policy meeting, Chairwoman Janet Yellen said she has no intention of stepping down before completing her four-year term in early 2018. Yellen and the board voted to raise rates for the first time this year. Fortune
Putin involved in U.S. election intervention
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Up or Out
Christie’s has named Guillaume Cerutti CEO, succeeding Patricia Barbizet. Art News
Royal Dutch Shell CFO Simon Henry will step down in March. Jessica Uhl will succeed him. WSJ
Fortune Reads and Videos
Twitter wasn’t invited to Trump’s tech confab
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The problem Chipotle still hasn’t addressed…
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In a trade war with China…
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The average price of a Manhattan apartment…
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On this day…
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