It’s said that a society grows great when old people plant trees whose shade they shall never enjoy. And though it’s difficult to plant trees when you’re fighting fires, that’s the urgent priority for businesses that want to survive and prosper in the long-term. 

One of today’s biggest missed opportunities is that our forced focus on the immediate present means we are failing to address structural economic problems that will define the next 20, 30, or 50 years. Wage stagnation, an ageing population, flatlining productivity, and labour shortages are not only challenges in their own right; they will cause the inflation that impoverishes our grandchildren and brings tomorrow’s businesses to their knees. 

What trees can shade businesses from the heat of future crises? Investment in new technologies like automation will play a crucial role, of course. Equally if not more importantly, however, is that businesses understand technology’s true strategic impact and how it will shape the workplace, the labour market, and the economy of tomorrow. And the best way to glimpse into that future is to look to the past.

A tale of two economies

History affords us countless illustrations of technology’s transformational effect on society, but perhaps the most relevant period to today’s challenges is the aftermath of World War II. It was the best of times; it was the worst of times – depending on where you lived.

In Britain, victorious but exhausted, the post-war consensus saw both main political parties supporting nationalisation and strong trade unions, both of which militated against efficiency, productivity, and investment in new technologies. Far from being the New Jerusalem, the UK became the sick man of Europe, its industries paralysed by strikes and undermined by poor-quality workmanship – as epitomised by British Leyland, whose vehicles were renowned for their mediocrity and unreliability.

Meanwhile in defeated Germany, a revolution was taking place. When German businesses rebuilt their shattered factories, they invested heavily in new technologies, which included robotics. The result was the wirtschaftswunder – the economic miracle that not only powered (West) Germany to become the richest nation in Europe, but also won its workforce a deserved reputation for quality and efficiency.

It’s a major mistake, however, to assume that automation alone led Germany to build BMWs while the UK made Austin Allegros. You can’t base an automotive (or any) industry solely on machines: it requires an effective business culture, skilled workers, good labour relations, and a strong economy. Automation is no substitute for these – but it can support them all. 

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Labour pains – and gains

One of workers’ biggest worries is that robots and automation will steal their jobs, yet history shows this fear to be utterly misplaced. The World Economic Forum estimates that by 2025, technology will create at least 12 million more jobs than it eliminates. Automation does not destroy jobs, rather it transforms them in areas designed to unlock new, or previously untapped value. 

Germany’s technological investment did not lead to mass redundancies and strikes: German employment remained high, industrial relations were invariably excellent, and businesses continually invested in cultivating employees’ skills. A highly motivated, content, and skilled workforce was the foundation on which German businesses flourished, innovated, and expanded. 

And there’s the lesson for anyone who thinks automation is a quick fix to immediate challenges. Yes, you can ‘rationalise’ your business, reduce headcount, and get some quick productivity gains. But the benefits start to plateau very quickly: once the machines are operating at full capacity, there is a natural limit to how much more you can achieve. The business hasn’t fundamentally changed and can no better weather future economic, demographic, or other storms. 

Time to grow up

Automation and labour are not enemies; they are the perfect partnership. The technology saves significant amounts of time and money by doing mundane tasks better than any human can and enabling people to concentrate on the high-value, high-reward work they actually want to do. But that’s only possible when it’s implemented as part of a well-thought-out strategy towards structural problems like productivity, labour shortages, and building resilient supply chains. 

We need to start having a more grown-up conversation about automation, starting with the benefits it brings to employees. When businesses harness technology to become more efficient, productive, and agile, it should translate into higher pay, greater job security, better prospects, and more challenging, rewarding roles for every worker. And this isn’t just a question for the C-suite: it’s equally relevant to our nation’s industrial strategy for the next half-century. Automation should be a priority for government, mentioned in the same breath as other initiatives aimed at improving the dynamism and resilience of our economy, such as immigration policy and trade deals.

In an era of ‘least bad choices’, one decision should be perfectly easy. We either do nothing and leave ourselves and future generations further exposed to disruption – or we start planting the trees that will root our security and prosperity for many decades to come.

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