Technology and the common good: for a GDP that makes sense

To what extent does technology improve people's lives? Today, that is a hard question to answer. Depending on their own personal take, the “pro-techs” will point to surgical robots or to the algorithms that regulate traffic jams and pollution, while the “anti-techs” brandish the threat to freedom posed by social scoring or the growing carbon footprint of high-tech industry. To bring an objective perspective to the debate, we need a far more precise way to measure the contribution that technology makes to well-being and the common good. Given its limitations, GDP is no longer fit for purpose.

Technology is inherently neutral

Technological progress has no pre-existing meaning; in itself, it is neither beneficial nor harmful. Biochemistry, for example, flourished as a discipline in the mid 20th century: it led to the discovery of more effective anesthetics, but also to that of sarin gas. Moreover, technology affects different population groups in different ways: the rise of the automobile enabled city-dwellers to access better housing conditions and new leisure activities, but it put most blacksmiths out of a job. Similar observations could be made for digital technologies, particularly AI and robotics: they generate new wealth, but accentuate certain inequalities; they create new jobs, which require new skills, but destroy old jobs in the process; they can make life more comfortable, but can also be a source of stress.

Ultimately, the impact of a technology is the result of human decisions. It is our collective choices, and the measures accompanying the technologies we implement, that determine whether they have a positive or negative impact on well-being. The key question remains that of meaning: what do we, as a society, want to “do” with a technology? Petitions of principle about particular technologies are of little interest; what we really need to be debating is the direction each technology will take us in, and how we should supervise and support it.

The limits of GDP

Such debates are, by nature, contradictory. The interests of taxi drivers and hoteliers are not compatible with those of the technological disruptors of mobility and tourism, nor with those of the cities where they all operate. To decide between them democratically, it is essential to have access to information that is as reliable and as complete as possible.

For several decades now, the indicator we have relied upon most heavily has been gross domestic product. GDP measures the creation of economic wealth, which has tended to be associated – and sometimes even confused – with job creation, purchasing power, and by extension, the well-being of a majority of the population.

However, the limits of this approach are now becoming clear, especially when it comes to measuring the impact of digital technologies. The first criticism leveled at GDP was that it tells us nothing about the distribution of the wealth created. And as several studies by economists have shown (notably Kharlamova et al. in 2018), while digital technologies do indeed generate growth, that growth mainly benefits the best-qualified segments of the population. The second limitation is that GDP does not integrate the non-economic dimensions of well-being, which are nonetheless of crucial importance: for example, the feeling of security or the sense of social cohesion. For example, in their book Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism, Nathan Gardels and Nicolas Berggruen argue that new technologies make many people insecure, anxious that they will lose their jobs and will be unable to reskill for another line of work. They hold this fear responsible for the loss of trust in institutions and the resurgence of populism. A recent survey by McKinsey identified the same misgivings: 55% of French people say they are personally concerned about the consequences of technology for their jobs. Subjective as these concerns may be, and perhaps – as I wrote in this post – overly pessimistic, they should not be dismissed out of hand. It all shows how urgent it is to have a sharper and more nuanced vision than that of GDP.

Several institutions have been working on this in recent years, starting with the United Nations, which developed a synthetic indicator integrating health and education, for example: the HDI (Human Development Index). More recently, in 2008, the Stiglitz-Sen-Fitoussi Commission proposed a comprehensive dashboard, adding the dimensions of well-being and environmental sustainability to the economic dimension. The OECD has come up with its own “Better Life Index”. Meanwhile, several economists – including Michel E. Porter, Jeffrey D. Sachs, G?sta Esping-Andersen and Lesia Nedoluzhko – have been working on the quantification of well-being.

But the question of the impact of digital technologies on the various dimensions of well-being is only just beginning to be addressed.

Towards “GDP+”

In the study that McKinsey produced for this year's Tech for Good summit at VivaTech, we proposed a model to assess the contribution of technologies to well-being. This index, called “GDP+”, includes many criteria that influence individual happiness: job security, level of societal inequality, mental and physical health, life expectancy, education, leisure, etc.

This analysis is particularly rich in insights, both retrospective and prospective. First, it is notable that in the more advanced regions (the United States and Western Europe), well-being has made steady progress over the past 40 years – a period that coincides with the advent and subsequent spread of digital technologies. There seems, then, to be a gap between the perception and the reality: while most surveys reveal a form of pessimism in public opinion, the general trend is nevertheless still towards an improvement in well-being (though there will, of course, be exceptions and nuances). If we focus specifically on the latest digital technologies, including artificial intelligence and robotics, we see that they can have positive applications across all of the dimensions that contribute to well-being. In our report, we scrutinized over 600 applications, too many to sum up here, but they are often incredibly inspiring: from pollution-fighting water drones, to chatbots that help refugees navigate the immigration process, to the most sophisticated prostheses for people with disabilities. Finally – and this is probably the study’s main message – it is perfectly conceivable that digital technologies will continue, for the next ten years, to have a positive impact both on GDP… and on well-being. We modeled four scenarios, varying the degree to which governments and companies intervene proactively to supervise and support technologies. In the most ambitious of these scenarios, dubbed “Tech for better lives”, well-being continues to grow by 0.5% a year (and GDP by about 1.5%). These are encouraging results, but they call for public and private decision-makers to shoulder their responsibilities.

A vibrant call to action

By contrast, in a scenario in which the transition is not supported, and in which companies leverage technologies mainly to cut costs, the impact is far more damaging: GDP almost stagnates (at just +0.5%) and, above all, the general level of well-being declines (by 0.1 % a year). Given all the turbulence that liberal democracies have already been through, such a development would entail unforeseeable risks.

It is crucial, therefore, that governments and businesses get down to action. At government level, the options include: promoting equitable access to digital infrastructures; ensuring that the most vulnerable segments of the population are given priority for training in digital technologies; stimulating innovations that further well-being, particularly through public procurement; and maintaining a competitive regulatory framework, avoiding monopolies or rent-seeking that would stifle innovation, particularly around data.

Businesses, meanwhile, should integrate technology into their corporate social responsibility policies. It would be good to see a new acronym, “CSTR” – for Corporate Social and Technological Responsibility – become commonplace in the near future. And what would this involve? Well, firstly, a focus on the use of technology to find solutions to major contemporary problems (health, the environment, etc.) and to develop new products, services and markets. If technology is used merely as a cost reduction lever, it will no longer create enough wealth to offset its deflationary effects. Secondly, by looking ahead and facing up to the need to upgrade the skills of their employees, and possibly reclassify them. As the CSR precedent shows, transparent reporting will probably also be required on these aspects, to encourage and “reward” virtuous behaviors by enabling informed consumer decisions.

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Adam Smith, who advocated minimal intervention in the economy, insisted that “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” Technology and economics must be harnessed in the service of the kind of society we want to live in – which is all about meaning – and, to this end, we must understand their effects well beyond national monetary wealth – which is all about measurement.