Your book talks about the new globalisation. What’s new?
It’s no longer about the flow of trade, but the flow of expertise. Nobody makes stuff anymore, they organise the production of making things. Cars aren’t made anywhere, they’re made everywhere, with parts sourced from Mexico, Canada, China and Japan. That’s the world we already live in.
What distinguishes your Fords or Mercedes from other companies is their ability to make this global process work. The bulk of the manufacturing may be done in factories around the world, but the core business stays in the US and Germany, where they have the technical, managerial and marketing know-how needed for car production.
But it’s not going to stay that way. With the move from trade in goods to trade in know-how or expertise, all jobs – not just hands-on manufacturing ones – will change.
What’s different about trade in know-how?
The costs of moving goods around the world started to come down 200 years ago, as transport links got better and relationships between countries strengthened. In the last 100 years, information technology – from the telephone to email – lowered the costs of communicating.
But moving expertise around the world usually means moving people – and physical interaction, whether face-to-face or hands-on interaction with machines, has remained costly. That is what’s changing, however.
What’s driving this change in how expertise moves around the world?
Moving expertise around the world usually means moving people – but that's changing
It’s largely down to interactions through robots. Not artificially intelligent ones – but robots remotely controlled by humans on the other side of the world. These telerobots are going to change a huge number of jobs, not just at the hands-on end – construction workers, cleaners, security guards, receptionists – but high-skilled professional jobs as well. Professional jobs can be done remotely thanks to telepresence, where a virtual version of a person can be beamed into a meeting, say.
What difference does it make to have a person control a robot remotely?
Robots are being trained to do things like household chores but they’re still struggling to do even the basic stuff. If a person drives the robot, you don’t have those problems. What’s more, that person could control a robot in Europe from Kenya.
Language translation is also nearly good enough to translate speech in real time. A person talking Swahili could converse with a hotel manager in Oslo without either of them knowing another language.
And what about telepresence? Are we just talking about Skype?
Skype isn’t quite there. But it’s simply a matter of time before video chat is so good it’s as if you’re in the room. Companies like Cisco already provide virtual meeting rooms. Now they’re testing holograms. It wouldn’t quite be the same – we still couldn’t shake hands – but it would save me a trip to London.
In the last two decades, medium-skilled people have seen their jobs outsourced. But lower-skilled workers were shielded by the need to interact with machines – you had to push a vacuum cleaner, say – and at the professional end, people were shielded by the need to interact in person. That won’t be the case for much longer.
How far off are we from seeing telerobots in the workplace?
It’s happening a lot quicker than people realise. Doctors have performed robot-assisted surgery from hundreds of kilometres away, for example. And, of course, drones are telerobots. Young soldiers sit in Arizona carrying out military action in the Middle East.
Telerobots will soon be as cheap as cars and then it will make sense to have them cleaning hotel rooms
We will soon see the same happening with manual labour. In Switzerland, when they cut the grass on the side of the highway, they use remote controlled robots when they’re cutting a steep slope. There’s a guy sitting nearby controlling it, but there’s no reason he needs to be in Switzerland.
And take construction sites. There are often no longer workers up there in the cranes. The cranes are controlled remotely by people on the ground. The demolition machines are also controlled remotely. There’s no particular reason you couldn’t have just one person on site and the rest working remotely from Uganda or Kenya, say.
If we already have remote controlled robots, why aren’t people already using them to work from overseas?
One of the problems is network delays. Even a half second can make a big difference. You also have to set up control systems – you can’t just decide to hire some remote construction workers to work in London tomorrow.
The robots are also expensive – even moderately good ones cost hundreds of thousands of dollars. But once we start mass producing them, they’ll be as cheap as cars, and then it will make sense to have them cleaning hotel rooms.
We just haven’t got around to it yet. Look at what happened with call centres, however. Call centres here all used to be in London office buildings. Then they were moved to the suburbs. Then they moved to Scotland – and now they’re in India.
So telerobotics will change manual work. You also mentioned telepresence. What will that do?
Telepresence – which will allow face-to-face interactions to happen remotely – will change most professional jobs. It has become pretty good in the last few years.
Instead of actual face-to-face work, we’ll see a rise in what you can call international telecommuting or virtual immigration. This will allow many more people from developing countries to participate in the world economy. It will create good jobs and raise the living standards for many people who are held back by the current requirement that face-to-face interaction means actually being in the same place as the people you’re interacting with.
Equally, telepresence will let London bankers turn up for work anywhere in the world. If you have skills that are in demand and you can deploy those skills remotely, then you will be in demand by everyone. We’ll have what’s called superstar economics.
What’s superstar economics?
It’s like what happened with European football when the rules were changed and clubs were allowed to hire players from other countries. The best players were then worth millions, when before they had been stuck playing in Portugal or wherever.
Football is a good analogy for what’s going to happen with globalisation in general
In fact, football is a good analogy for what’s going to happen with globalisation in general. Say you have two football teams sitting down to trade players. With the old globalisation, that would usually work out because each team was able to get rid of the skills they had too many of – too many strikers, for example. That’s like trade in goods.
The new globalisation is where the coach of the better side goes to train the worse side on weekends. This is very good for the coach, because he’s selling his knowledge in two places. It’s definitely good for the worse team too. It’s not so clear if it’s good for the better team, which used to have a monopoly on their coach’s talents.
And what about the worse team’s coach?
He’s had to find something else to do. But that’s not so bad. Taking this back to the real world again, activity is ramping up so fast in developing countries that there are huge opportunities for everybody. So if we’re talking about India or Thailand or Poland or Mexico that coach will be fine.
With trade in goods, changing prices mean there are always winners and losers – and some will sink. But with trade in knowledge and innovation, all the boats rise.
The new globalisation sounds like good news for everyone. Is that really the case?
It will be wonderful for many poor people around the world but more disruptive for rich countries. And the low-end jobs are not coming back. Even if you bring these jobs back home from where they have been outsourced, we won’t see people doing them. They will be replaced by regular industrial robots like you see in car factories. That’s a reality we just have to accept. And we need to decide what we’re going to do about that.
To start with, you have to look after the workers, not the jobs. The only way forward is to help the people who are directly hurt by globalisation, with social policies like retraining, help with housing or relocation of workers. We need to forget about why people lost their job, whether it was their age, their skills or automation. You lost your job, you need help – that’s it.
Look at Japan. Everything that can be offshored has been offshored. They call it the hollowing out of the economy. But they don’t have an anti-globalisation backlash there and it’s because they take care of their people. But look at other countries like the US, where there is almost no social welfare, or the UK – if you’re unemployed, people think you’re stupid or lazy. And that’s why they’re really angry.
What types of job will be least affected by the telerobotics and remote-working revolution?
They don’t have an anti-globalisation backlash in Japan because they take care of their people
Those with multiple interactions with other people, jobs that involve a lot of networking and building personal relationships, or jobs that offer very bespoke services. And jobs that involve deal-making and negotiating, where you have to sit down with people and a lot rests on nuanced physical interaction – telepresence may never replace that, at least not for some time. And jobs that require cultural sensitivity will probably always be tied to a certain place.
Do you expect to see policies against hiring virtual workers?
I’m almost certain we’ll see some kind of backlash. There might be a remote-working security guard that does something wrong and we’ll see protests against virtual workers in general. That will happen at first.
The new globalisation is more sudden, more unpredictable and more uncontrollable than what we’ve seen in the past. You don’t know whether your job will be gone soon or whether you’ll get more opportunities, so everybody is a little afraid. And because we’re still trying to make sense of it in terms of goods crossing borders – which is quite different to expertise crossing borders –- everybody’s also confused about what’s going on.
Richard Baldwin is the author of The Great Convergence: Information Technology and the New Globalisation (Harvard University Press).
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