November 2, 2017
Last year, just as I was shaping a vision of how a “Manufacturing Renaissance” could allow creating 100 million jobs for less skilled westerners, I took a course on AI (Artificial Intelligence) which suggests that 100 to 200 million more low technology jobs in service such as banking and trading were going to disappear soon from the Western hemisphere. In this post I posit a complex and still emerging concept: the need for Europe to pivot its economy towards what Carlota Perez calls “Human Centred Services”, where humans satisfy services needed by other (solvent) humans. This should create sufficient jobs (which soft- or hard-wares can’t deliver) AND improve quality of life – in Europe at least, thus channelling a development path for the European Union. Pse play “Peple are People”, by Dépèche Mode (1984, 3’39”) and let’s move on.
I thank Prof. Mariana Mazzucato (University of Essex) for the discussion which focused my reflections on Renaissance Europe, Prof. Carlota Perez (London School of Economics) for her presentation at the European Commission, allowing us both to progress on Human Centred Services and Prof. Laurent Ledoux (Université Libre de Bruxelles) for inviting me to his “Philosophy and Management” seminars on AI (and for being my friend since 20 years).
NB – This post is the 4th and last of this summer’s WORK IN PROGRESS. Unlike parallel debates on #FutureOfEurope (see 3 previous posts) this will go on until Christmas 2017. So please comment, criticise and contribute…
The great manufacturing Renaissance – which will not happen
It’s 10 years – since the financial crisis hit the EU – that I am grappling with the potential of manufacturing for developing a new “Renaissance” in European Small Businesses (SMEs in Eurospeak) and hence in Europe’s economy. 3D printers would have cut capital and land costs, rising transport costs would have pushed manufacturers to reshore entire business closer to major markets (i.e. the European Single Market), craftsmanship would have given Europeans a global competitive edge…
Reason is that I’m a biomedical and materials engineer appalled each day at what human ingenuity can deliver to match nature’s make. Manufacturing has made Europe industrial, knowledgeable and ingenious. Today it has lost its shine and even its workers. I saw the crisis now commented elsewhere coming: with agriculture and manufacturing jobs leaving Europe in millions, what competitiveness would have remained to Europe if services were all it had. Less risk-prone than the US and with higher labour costs than Asia, Europe would have lost skills and edge over time, leaving millions of unemployed at the mercy of populists, claiming to return to the “beautiful past”.
Last year has seen, for me, the coming of age of that trend. Scared by their disappearing jobs and way of life, wary that technological change and globalisation would get these jobs away from them, their friends and family, either by moving factories, or by undercutting their salaries for distance services such as back-office or software, millions of westerners got really scared by the 2008 financial crises and its consequences. Brits and Americans in particular, not sure of being still able to get their pensions, pay their mortgages and their healthcare bills were seduced by Brexiteers and Trumpists. Continental Europeans and Japanese, their ears protected by their social state, fatter pensions and better healthcare resisted better to the chants of the populist sirens.
Professor Goldin described well in Nature this month how Europeans are ditching the Renaissance and Enlightenment values of reason and evidence-based politics, to embrace partisanship and emotion. He spurs scientists to team-up to bring back a new Renaissance where science helps addressing major societal challenges. These are, for me, those affecting the back-bone of societies due to complex, long-term changes which are hard to address by today’s politicians, focused on simpler “actionable” solutions in the short term. Demographic change, some Healthcare scares (Neurodegenerative Diseases, Anti-Microbial Resistance…), Climate Change, Deteriorating Oceans, How to provide food and energy in a safe and sustainable way, Urban Development, Cultural Heritage… are those I have been tackling professionally for 10 years. Any one of them, if it runs amok, can ruin our Western world, but no politician can address it alone, or in her lifetime.
 See the Joint Programming Process for addressing major societal challenges website @ http://ec.europa.eu/research/era/what-joint-programming_en.html 2008-ongoing
More than Brexit, when indeed tens of million Brits were lured into voting against their best interest, appalling economists, it was Trump’s election which showed me how emotions and beliefs were back. And my evidence-based analysis suggests few of the policies promoted by Mr. Trump will improve the lives of the less skilled and left-over by globalisation, thus pushing them further into democratic delusion. This really scared me and prompted me to, like in the Renaissance, try to shed some light on what happened and how the situation could be mended, at least in Europe.
The elephant in the room
The current crisis of open and developed countries (democratic and liberal) follows, for me, from the paradoxical success of the Western world endeavour to support less developed countries to develop, through democracy and openness. As a result more developed countries struggle to find revenue to repay the debts incurred to pay for the 2008 financial crisis and to find jobs for the less skilled, priced-out from the markets by local and foreign competitors.
Branko Milanovic, from the World Bank, showed in 2014 how over the previous 20 years, technological change and globalisation has brought riches to some 500 to 1000 million Asians and plentiful bonuses to the, mostly western, Top 2 to 5% of humans – not to mention the 1% living in the trump.
Key to understand Brexit, Tropism and today’s success of populism is the beginning of the elephant’s trump; covering some 50 to 100 million US and Western lower middle class families. They gained much less than their neighbours or than Asians. In relative terms they got poorer, lost their jobs, houses and hopes. Worst: they see little future for their sons, who have more difficulties than the wealthier elite to access the universities and start-ups that will allow them to progress along the elephant’s trump.
And AI is coming. What happened to blue collars, now threaten white collars and persons in service as bank clerks, junior lawyers, secretaries, translators, car insurers and even pilots might be replaced by robots or AI driven networks
Scared by foreigners coming to take their jobs abroad or by immigrating, they risk turning America and Europe into fortresses, closing on their markets and assets. And, for me, the lesson of China which closed up in 1500 to be vanquished 300 years later, and now flourishes after opening up again is so clear: if you close up you die, slowly but surely.
 For a detailed analysis, read “Shooting an elephant”, https://www.economist.com/news/finance-and-economics/21707219-charting-globalisations-discontents-shooting-elephant 2016
 For this see my previous Blogpost http://taxieuropa.blogactiv.eu/2017/08/25/an-open-or-a-fortress-europe-taxi-stockholm-sweden/ 2017
A European Renaissance
When thinking about ways to analyse the elephant and tame it in Europe, a key issues is which future, solvent or creditworthy (i.e. providing gainful employment with sufficient world-level productivity) jobs will continue or appear in Europe in the future. At a conference of her EU project, chatting with Mariana Mazzucato, I realised Europe has three systemic assets along which to develop a competitive and sustainable economy:
- A society ready to embrace a smart, green and circular bio-economy. The Energiewende should provide it with more cheap and secure energy. Manufacturing for recycling and the circular economy in general should provide it with more cheap and secure resources – although less plentiful than for energy. A green approach should eventually provide it with quality and safe food, which it can even export to the rest of the world.
- A skilled society where agriculture and manufacturing are still competitive. If it can digitise its economy and put the big data and IT revolution to work, Europe’s competitive advantage in the primary and secondary sector (with respect to America, for example) should provide it with a competitive platform base for bio-production and manufacturing. European hardware start-ups in the field of health, sport, personal development… can conquer the world, the way US software houses did in this decade. And as I learned from my former student Jari and his Start-Up Accelerator “Industrio” , contrary to software, hardware is hard – and Europeans can do it well – including less skilled workers. Asia is the competitor here.
- Europe has very competitive public systems. It should leverage its skills and knowledge in health, education, welfare to lower public costs in those areas and allow start-ups to flourish by providing services which US and Asian competitors would not develop, given the more private nature of their markets. Low-cost services for prevention and care I health, distributed education systems, possibly multi-lingual in education and rehabilitation projects for inmates are three type of activities which can be developed in Europe, delivering jobs which do not necessarily require university levels and possibly cater also to needs that will arise in the rest of the world.
Human Centred Services
That’s were it gets interesting. Pse play now “Il changeait la vie” where Jean-Jacques Goldman celebrates all those who, by simply doing their job, make your life better (1984, 4’19”). Starting from the examples above I have developed four examples of jobs which could be developed in Europe, provide a sustainable living to non-university level Europeans
- In healthcare – “More care for less cure” – Several European countries are developing incentives so that doctors, hospitals and healthcare companies would do more prevention and “care” with a little less “cure”. Solutions developed here would be hard to apply in the US. For example, in Trento province (Italy) a project of the European Innovation Partnership has allowed to reduce the number of helpers required by isolated elders living in remote places by providing smartphones to the elders. These are connected to an AI system which alerts the helpers, who stay in a central place, in case there is an emergency or an alert for one person resulting from an “abnormal behaviour” of the person. The AI system is “trained” by 2 Ph.D. students which spun-off a company from the university, but all the helpers have basic care training only.
- Education – “Train the trainers” – A recent Economist editorial leader captures well how rather simple routines (testing trainers and teachers in the class, teaching them and mentoring them on how to teach, not only on what to teach, focusing on weaker teachers and pupils…) can radically boost education performance. This could also involve less skilled Europeans, which can reveal being good teachers and it should eventually ensure more European are more skilled. Again, such an approach would be difficult to replicate in the US, where there is much less public education.
- Justice – “Justice for all” – I feel the US and Chinese justice systems are failing. Both crumble under prisoners, whilst Europe has a more equitable and cheap system. It needs reform to further improve it, possibly learning from the British system (where most international arbitrages are made, be it for businesses or persons) for its speed and efficiency, and from Nordic countries on how to rehabilitate those who fell wayward. For example, as Europe has to host refugees (at least) and probably immigrants who are distant from its values and shores, the role of “cultural mediators”, paid by the ministry of justice, could reduce conflicts and mayhem arising from second generation ghettos and places were refugees would relocate.
- Agro-Forestry – “Back to the future” – Agriculture is at the heart of Europe. The European Community brought rapidly Europe from dependence to be self-sufficient and agricultural exports. Today’s agriculture is reaching the limit in terms of diversity (there are less than a half-dozen corn types in Europe) and yields. Combining lower nitrogen fixing plants (like peas and beans), with food crops (corn, maize, wheat) and fruit trees on the same parcel allows for using less fertilizers, improving yields and diversifying products. True, it would require more human work and would be harder to mechanise, but maybe mechanisation has reached its limit. For example, the culture of Italian Safran has stopped because of the Earthquake in the Apennines. The original Italian farmers left and will not return, whilst northern Italy top restaurants would pay Saffron more than gold (on a weight basis) if it were available. At the same time, there are some 100.000 unemployed refugees standing idle in Italy. I am sure some would willingly go to the damaged villages in the Apennines, to help re-build them. Some are doing so already, but would probably engage in cultivating Saffron.
After posting these on my Linked-In groups, I also got ideas for similar applications related to human management and development from several of my friends. Europe has created many jobs in this area, in particular in Denmark, for example, business counselling services can reply to questions relating to innovation through job services, advice for collaborations in Denmark or in the world.
Whilst I was looking for a concept to cover all the above, I met at a conference Prof. Perez who has the experience I most appreciate: life in various countries (even continents for her), work in different environments, including being a minister in pre-Chavez Venezuela and now sharing lessons with students at LSE. She presented the slide below combining the transformation of the infrastructure (my social systems or systemic assets above) and much more job examples than mine. She calls them Human Centred Services.
I Ilove the concept. These are jobs where humans will, for me, have an edge on machines, robots and AI systems at least until… 2050. I, for one, do not want to be put to bed by RIBA II, however empathic its AI is. I would prefer a strong Hilda nurse of Germanic ascent or someone like Koutu, the refugee currently helping my friend Domenico, the inventor of Erasmus.
Making them pay enough for Europeans (native or new), through system reform, training the future generation of such workers and preparing society for the AI challenge is my most interesting project for the moment.
Do you want to comment, contest or contribute? Reply, comment or contest, preferably on my Blog, but all channels are open to you. Just be aware I might ask you to post the most interesting bits on my Taxi –Europa…
NB- This post is private and personal. It does not represent views of the Commission (for which I work) or of the Union of European Federalists and Stand-Up for Europe/Party of European Federalists (for which I campaign). Re-publishing is possible under Copyleft principles. I would appreciate being quoted and informed.