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Europe’s Digital Dilemma: How to Get Ahead of the Economic Curve

April 24, 2015

Most MIT IDE faculty and researchers are optimistic that workers and the U.S. economy will adapt–and eventually prosper–in the face of huge digital disruption.  However, that enthusiasm was tempered somewhat by pundits across the pond.

Not everyone in the U.S. will see their share of the economic pie grow as digital technologies automate and eliminate jobs, of course. But in Europe, entrenched social dynamics and economic models may be even more resistant to change. After hearing presentations from The Second Machine Age co-authors and IDE directors, Erik Brynjolfsson and Andrew McAfee, as well as other MIT experts at the April 10 IDE event, several London attendees were uncertain about how it all  will play out in Europe.

Peter Day, a host at BBC World Service News, says that because European workers are more unionized and insulated from the enormous global economic changes taking place around them, many don’t realize how profound the impact could be.

Displacement by robots or automation currently may be a “vague prospect,” compared to workers in the U.S. private sector, Day says, and in some cases, the EU “tries to use regulations against the beast from abroad.” But the effects will be felt eventually.

No one knows the exactly how the media industry or other specific sectors will fare, but with more self-employment, lower wages and shifts in occupations already creeping in, “social unrest could result” in Great Britain as well as on continental Europe as digitization fully takes hold, Day speculates. Watch his remarks here

Despite obstacles it’s clearly time for Europeans to learn more about digital trends so they, too, can “race with machines,” as Brynjolfsson and McAfee suggest, according to Belgium-based MIT alumni, Jean-Jacque DeGroof. He believes that In light of “de-industrialization,” high unemployment, stagnant wages and a drop-off of higher education in several EU countries, it’s clear that too many academic and business models are not keeping pace. Europeans “need to hear and disseminate” the messages that the MIT IDE is putting forward to spark better collaboration and innovation. View his comments here.

In his keynote, Brynjolfsson said that part of the “new grand challenge” is to realize that business as usual won’t solve tomorrow’s economic problems. “We need to reinvent society and business to keep up with accelerating technology,” he said. Moreover, in order to take advantage of the “huge opportunities” that technology is offering, some regulatory environments are due for a “refresh.” Brynjolfsson recognized the many differences among national and regional economies, but noted that it’s the labor-intensive economies that are even more vulnerable to automation because workers do repetitive tasks.

What are your thoughts and experiences? Add your comments and perspectives to this discussion.