Tech for Good: Why applying technology in socially responsible way is good for business and society

Artificial intelligence, automation, digital platforms, and other technologies are changing our lives. For the economy, the benefits in the form of raised productivity are already become evident in some sectors. But what will the continued adoption and diffusion of these technologies mean for our well-being?

One fast-growing strand of economics seeks to go beyond simple measures of GDP and look at broader welfare and well-being. Technology lends itself to such an exercise because it has a long track record with both negative and positive outcomes. For example, incomes stagnated or declined for some workers during the first Industrial Revolution. But over the past century, we have all benefited from steep reductions in working hours, improved longevity, and safer workplaces (Exhibit). Especially today, at a time of rapid technological change and a heated public debate about automation, taking the welfare pulse is an important exercise.

On the negative side, fear of job losses and related declines in material living standards could heighten risk aversion. What if workers fear the future so much that this changes their behavior as consumers and crimps spending? What if stress levels rise to such an extent as workers interface with new technologies that labor productivity suffers?

On the positive side, many of the technological innovations we are seeing have the potential to bring significant benefits to our well-being in the long term. Health and longevity is one obvious example: already, AI algorithms are improving early diagnosis and treatment of diseases from Alzheimers to diabetes and some forms of cancer. Robots are not just adept at hauling packages in warehouses; they can also carry out delicate micro-surgery with pinpoint accuracy.

The McKinsey Global Institute has just published a new discussion paper, timed to this year’s Viva Tech, that examines the economic potential for “Tech for Good.” It is based on a library of about 600 use cases of tech applications that can improve lives, from reducing pollution to improving job matching.

The key finding is that the economy, business, society, and individuals will all benefit if technology is primarily focused on innovation rather than labor substitution, and if it is accompanied by active management of the inevitable transitions it will create, to occupations, skills, and potentially wages. In practice, that means, companies and the public sector will need to play a big role in retraining workers and improving labor fluidity.

In the best-case scenario, the potential boost to welfare—the sum of GDP and additional well-being components, such as health, leisure, and equality—could be between 0.5 and 1 percent of welfare growth per year in Europe and United States by 2030. This is about double the growth from technology under an average scenario, and considerably higher than the GDP and welfare gains we have seen in recent years from computers and early automation.

However, other scenarios that pay less heed to innovating or to managing disruptive transitions from tech adoption could slow income growth, increase inequality and unemployment risk, and lead to fewer improvements in leisure, health, and longevity.

Technology is neither good nor bad—what counts is how it is used. Business has a special role here. If companies adopt an approach of enlightened self-interest in the face of AI and automation adoption, it will not only bring benefits for society and the workforce, but it will also be good for business. Retraining workers will enable firms to fill a growing skills gap. Accelerating product innovation will open new markets and create new jobs. Higher job satisfaction and safety will improve profitability. And addressing societal issues head on will improve the trust and stability needed for sustainable consumption and economic growth that will ultimately benefit business, too.

History can teach us many lessons about this. A century ago, in 1914, Henry Ford famously realized that his workers would be the first customers of the Model T and started paying them $5 per day, twice the typical daily rate, even as he cut prices for the cars by 50 percent over five years. The result was a significant increase in Ford’s productivity, profits—and employment. Today’s business leaders have every reason—including for the benefits to their own company—to be just as enlightened about technology adoption as Henry Ford was.

Pal Erik Sjatil and Eric Hazan

?Cet article fait partie d'une série de tribunes publiées dans le cadre de l'évènement annuel Viva Technology, qui aura lieu à Paris du 16 au 18 mai. A partager, commenter et liker sur LinkedIn avec le hashtag #VivaTech.