There’s been a lot of chatter in the past week about the relationship between technology and jobs. A report from PwC on Friday said 38% of U.S. jobs are at “high risk” of being automated by 2030. A study from the National Bureau of Economic Research yesterday said that between 1990 and 2007, the addition of one robot to the workforce led to the loss of 6.2 jobs. And Maureen Dowd’s profile of Elon Musk in Vanity Fair has him musing again about artificial intelligence as an “existential threat” to humanity.
Worried yet? All of this has put into high relief comments made by Treasury Secretary Steven Mnuchin last week, who, when asked by Mike Allen of Axios whether he was worried about AI displacing jobs, replied: “not at all…I think we are so far away from that” — 50 or 100 years — “it’s not even on my radar screen.”
Mnuchin’s reported comments prompted outrage, including a column by his predecessor as Treasury Secretary, Lawrence Summers, comparing his views to climate change denial.
Curious, I went back and watched the video of the interview, and came away convinced Mnuchin has gotten a bum rap. The core of the misunderstanding is the term “artificial intelligence,” which is used so broadly and vaguely these days as to be almost meaningless. Mnuchin was clearly using the term to refer human-like, generalized intelligence, which many AI experts do believe is 50 years or more away.
As for his optimism… well, he was expressing a belief shared by most economists: that technology-based, labor-saving investments are the path to productivity gains, which in turn are the route to wage increases. “A robot that folds towels so our workers can be doing higher-productivity jobs….that’s a great thing.” He also volunteered twice that the U.S. needs to “invest in education and training” so that people have the skills necessary to do those jobs.
Take a look at the interview in full, here. I’m more worried than Mnuchin that the rapid pace of technological change will be disruptive to the workforce. I would have liked him to spend more time on how we boost education and training fast enough to deal with that disruption. And I certainly think President Trump has been remiss by focusing so much on trade as a disruptive force, and so little on technology.
But climate denial? Hardly.
• Ivanka Officially Joins the Team
Ivanka Trump is to become a federal employee with the title “Assistant to the President,” the White House said, confirming a New York Times report. Like her husband Jared Kushner, she will forego a salary. The aim is to address concerns about conflicts of interest by subjecting her to the same disclosure rules as everyone else in the White House. The potential for conflicts of interest has been on full view recently as Kushner’s real estate company talked to China’s Anbang Insurance about an investment in a $7.5 billion Manhattan tower project. Critics had said such a deal could enrich Kushner’s family, and indirectly influence U.S. policy towards China. The two sides have abandoned the talks, according to The Wall Street Journal. Fortune
• Conoco Extricates Itself From Oil Sands
ConocoPhillips became the third oil company this month (after Marathon and Royal Dutch Shell) to get out of the Canadian oil sands business, selling to local oil sands specialist Cenovus for $13.3 billion (of which $2.7 billion is in the form of Cenovus stock). Conoco had been under more pressure than rival majors from the drop in oil prices due to the lack of a downstream hedge, and had to cut its dividend last year. It will use the money to pay down debt and buy back $3 billion of stock. Its shares rose 5.8% after hours. FT, metered access
• Exxon Defends Paris Climate Deal
ExxonMobil is urging the White House to stick with the global climate agreement reached in Paris last year. In a letter sent to the White House on March 22 — days before President Donald Trump signed an executive order rolling back Barack Obama’s climate legacy — Exxon told the administration that the Paris agreement is an “effective framework for addressing the risks of climate change” and that the U.S. is “well positioned to compete” under the deal, according to CNN Money. It’s the latest sign of Exxon’s evolving attitude towards Climate Change since Darren Woods took over as CEO from Rex Tillerson, now the man tasked with explaining U.S. Climate Change policy to the rest of the world. Fortune
• Daimler Steps on the, er, Pedal That Replaced Gas
Daimler AG, the parent of Mercedes-Benz and Smart, said it would accelerate the roll out of electric vehicles after failing to cut average carbon dioxide emissions across its fleet for the first time since 2007. Under EU law, fleets have to average under 95 grams of CO2 per kilometer by 2020. Last year, Daimler averaged 123g. While individual cars are getting more efficient, the average is being pulled up by the popularity of gas-guzzling SUVs over more efficient sedans and compacts. The answer is to raise the share of hybrid or zero-emission vehicles in the sales mix. Fortune
Around the Water Cooler
• H&M Goes Upmarket as Zara Goes Online
H&M, the world’s second-biggest fashion company, said it would launch a new and slightly more upmarket brand, Arket, in the second half of the year. Arket stores will also stock third-party as well as in-house merchandise, it said. The group is trying to defend its margins against encroachments from e-commerce, an area where it arguably lags its biggest rival, Zara owner Inditex. H&M’s first-quarter profit fell less than expected in the three months to February, as cost discipline mitigated soft sales. But CEO Karl-Johan Persson said the European and U.S. markets are still challenging (as witnessed by its first monthly sales drop in four years in February). Reuters
• London Drifts From Its European Moorings
The venerable insurance market Lloyd’s of London confirmed it had chosen Brussels for its new European base, a move that will ensure it can sell to EU-based clients after Brexit. The move is likely to affect less than 10% of Lloyd’s 1,000+ workforce. Elsewhere, EU regulators formally blocked the merger of Deutsche Boerse and London Stock Exchange Group, an illustration of the difficulties facing London in defending its dominance among Europe’s financial marketplaces in the post-Brexit world. Reuters
• The Same Old Song at Uber
Uber’s image problems refuse to go away. A public account by Gabi Holzwarth, the former girlfriend of CEO Travis Kalanick, of a management karaoke evening with escorts would be unwelcome enough at the best of times, but one detail is particularly unsettling: Holzwarth’s claim that Uber VP for business Emil Michael called her recently to instruct her to keep quiet about any non-singing-related activity by the participants. He disputes Holzwarth’s account, but it wouldn’t be the first time Michael’s ethics have come under the spotlight. In 2014, he had talked openly about digging up dirt on journalists perceived as hostile to Uber. Fortune
• Samsung Is Back With a Better Kind of Bang
Samsung finally moved beyond the fiasco of its exploding Galaxy S7 Note phone. It unveiled the new Galaxy S8 and S8+ in New York yesterday, complete with a new virtual personal assistant that it calls Bixby. Security features include facial recognition, an iris scanner, and a fingerprint sensor. It also promised it had put the phone’s battery through an eight-point safety check that went “way beyond the industry standard.” The company didn’t disclose any deals about pricing, amid speculation that it will have to discount to regain ground lost to Apple and, increasingly, Huawei during the last product cycle. The two models will go on sale April 21. Fortune