It’s the Technology, Stupid

Automation now removes as many manufacturing jobs from the economy as outsourcing. What’s wrong with the economy? Increasingly, the robot is a culprit.

After Tip O’Neill’s “All politics is local,” Bill Clinton’s quip “It’s the economy, stupid,” is perhaps the most oft-quoted truism of modern American politics. But as times change, we should update our aphorisms accordingly.

Just four years ago during America’s presidential election, outsourcing to India and China’s currency manipulation were the bogeymen, the former blamed for the loss of jobs and the latter for the weakness of exports.

But increasingly the culprit is the robot. Automation now removes as many manufacturing jobs from the economy as outsourcing. Witness the U.S. Postal Service, which will have to cut 35,000 jobs by 2015, and how digitization has forced bookstore chains such as Borders into bankruptcy.

China, once the beneficiary of offshored manufacturing, also now faces cheaper competitors in Asia and technology upgrades: Foxconn—a subsidiary of Taiwan-based electronics supplier Hon Hai Precision Industry Co—plans to implement more than one million robots on its assembly lines in China by 2015. We may compete against each other economically, but we are all competing with, and against, technology.

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Co-written with Parag Khanna. Originally written for CNN.

Image: From CNN