Some of the world’s wealthiest and most influential leaders came to California this week for the Milken Institute Global Conference, a wide-ranging review of issues permeating economics and politics, with topics ranging from agriculture to mortgage markets to international trade and alliances, plus a long look at what the future will hold.
Of the 4,000 VIPs who attended — invitations are highly selective, and tickets topped out as high as $50,000 — one of the most intriguing questions under discussion was one that almost no one could readily answer: What effect will robotics and artificial intelligence have on our lives and on the world’s business, and how rapidly will this next technological revolution take place?
The Milken Institute Global Conference, an annual event for the past 20 years, has grown steadily into a unique gathering: individuals with the capital, power and influence to move the world forward meet face-to-face with those whose expertise and creativity are reinventing industry, philanthropy and media.
This year’s meeting in Beverly Hills, California, amounted to a peer review of President Donald Trump’s first 100 days in office. Four members of Trump’s Cabinet took part.
Former U.S. leaders
Former President George W. Bush and former Vice President Joe Biden also were on hand to give their perspectives on U.S. politics. They were interviewed by Mike Milken, the onetime omnipotent investor who almost single-handedly developed the high-yield debt market in the United States and piled up billions of dollars in profits during the 1980s, from leveraged buyouts, hostile takeovers and corporate raids.
Milken, now 70, was known as the “junk bond king,” and he ruled unchallenged until 1989, when he was indicted on 98 counts of racketeering and fraud. He served two years in prison and survived personal health crises, and has rebounded in the 21st century to his current status as a renowned philanthropist and public health advocate.
Interest rates and corporate balance sheets faded into the background when the business and policy leaders turned their attention to artificial intelligence, or AI, and robotics — key factors in massive changes looming over the U.S. economy.
Unemployment in the United States is currently at its lowest point in 10 years — 4.4 percent — but jobs in the retail sector are drying up, down more than 60,000 in the past two months. So-called bricks-and-mortar retail stores are closing down in the face of competitive prices and easy shop-at-home service provided by online retailers such as Amazon.com.
Robotics have transformed the auto industry and many other sectors of manufacturing, and the high-end analytics available through what is known as “big data” have streamlined the entire process, from raw materials to finished products. Both blue-collar and white-collar jobs are becoming harder to find; opportunities in the services industry keep overall employment levels high, but that also means a decline in average workers’ income.
Manufacturing jobs in the U.S. have been declining for decades, and that trend is having an effect on society as a whole, said Roy Bahat of Bloomberg Beta, a venture capital firm that is part of the financial services company Bloomberg LP.
Costs are rising for health care, housing and education, and with fewer good-paying jobs available, Bahat says those who “play the game by the rules” — educating themselves adequately, buying a home and supporting families — “still struggle to provide for an ordinary life.”
Bloomberg Beta partnered with the think tank New America to look at the future of work during this week’s conference, with input from leaders in popular culture, technology, faith communities, government and business.
They are due to issue a joint report later this month, but for now they raised imponderable questions: innovations such as self-driving trucks promise to change the way that companies move their goods, but how soon will that happen, and what will happen to drivers and packers now involved in such work?
The first large-scale commercial delivery of this kind was handled by a startup company called Otto last year. One of Otto’s autonomous (driverless) trucks hauled 50,000 cans of beer for 200 kilometers along a highway in Colorado, in the American West.
Otto’s co-founder, Lior Ron, said self-driving trucks hold immediate promise for American business, but he also admitted it was a carefully prepared test: Highway traffic, especially in a state like Colorado, is less challenging than traffic in cities, where pedestrians and stoplights make driving unpredictable.
The ride-sharing service Uber, which already had been studying the possible use of driverless vehicles, acquired Otto last year.
Most Americans tend to believe their children will have a better life — or at least earn more money — than they do, but Bahat deflated that notion: “If you look at the economic data, it turns out we live in the first generation where kids are statistically likely to make less” than their parents.
Anne-Marie Slaughter of New America said projections about how many jobs will be automated in the future vary widely, from 10 percent to 50 percent, and “we have no idea which of those [proportions] is true.”
New America, founded in 1999, describes itself as a “civic enterprise committed to renewing American politics, prosperity and purpose in the Digital Age.” It lists all of its funding sources, from “under $1,000” to more than $1 million; the biggest donors tend to be philanthropic groups and other foundations.
“We generate big ideas,” New America says in a capsule of its mission statement. “[We] bridge the gap between technology and policy and curate broad public conversation.”
To underscore the uncertainty cloaking analyses of technological change, Slaughter noted that drivers interviewed for her group’s joint study with Bloomberg Beta believe that self-driving trucks will not be in service for 20 to 25 years. By other estimates, she added, “It could be five. Who knows?”
Challenges in an era of artificial intelligence include the need to align technology with professional standards and social norms, Italian computer scientist Francesca Rossi said. In other words, human sensibilities must be integrated into machines’ decision-making process.
Brian Chin of the huge international banking firm Credit Suisse said his company has employed 20 robots to handle complicated tasks including answering bank employees’ questions about how best to comply with regulations on compliance and other banking procedures.
Bloomberg Beta’s Bahat forecasts self-auditing accountants and automated mortgage officers in the years ahead. Steering clear of explicit predictions, he said workers and consumers must prepare for “wildly unexpected” developments in the future.
New America’s Slaughter offers a wry comparison between the rapidly changing digital age and the Industrial Revolution. Harnessing the power of machines for manufacturing and transportation transformed the world and created lots of jobs, she said, but it also caused upheaval — Marxism, wars and revolutions.
For those gauging the impact of the current technological revolution, the New America analyst cautioned, “Do not think this is going to be a smooth ride.”