Bank of Canada urges government to embrace automation economy
The senior deputy governor of the Bank of Canada Carolyn Wilkins issued a warning to the federal government on April 18, suggesting if policy doesn't keep up with the changing world, Canadian business could be left behind.
As this country shifts toward a more automated digital economy, Wilkins says it's important to embrace this technology because it's good for productivity and our standard of living.
"In the past, automation was largely restricted to simple manual or procedural tasks. Today's technology makes it possible to automate an increasing number of cognitive and non-routine tasks across a wide range of industries," Wilkins said in her speech to the Toronto Board of Trade.
However, the coming wave of automation also means no one is immune to the impact of these technological advances.
"While traditionally we think of the workers that are displaced as being less educated workers, less skilled workers, what we are seeing now is the potential for more middle income and more highly educated workers who thought that those jobs were safe — the potential there is for those workers to be displaced as well," Wilkins tells The Current's Anna Maria Tremonti.
Lifelong learning in automation age
But we shouldn't despair because new jobs will be created as the economy transitions over, says Wilkins.
Wilkins advises people who are caught in this automation transition to embrace continuously learning new skills for new jobs that appear when old ones disappear.
"I think the mindset of being flexible, and being open to learning new things, and perhaps changing careers is going to be more and more important," Wilkins tells Tremonti.
For millennials, she says the best strategy is to embrace STEM (science, technology, engineering and mathematics programs) with a focus in science, math and technology because "those are solid foundations that provide a platform for future learning."
As the economy grows, Wilkins expects there will be new jobs created for millennials trying to get a foothold in the economy.
"We'll need humans to work. It'll just be different kinds of work and we need to be ready for that."
The inequality gap
Growing inequality is a potential negative side effect as we move into the new economy. While the Bank of Canada has no ability to prevent this growing inequality, Wilkins says governments can be proactive in mitigating inequality through taxation and investment in infrastructure.
Wilkins worries that people concerned about the technology become protectionist.
"We see that in the world today a little bit when it comes to trade policy, when in fact that's the opposite direction we need to go in," Wilkins insists.
"What we need to do is embrace the technologies in areas where we can make a difference and promote productivity."
Wilkins says both governments and the private sector understand the challenge this economic transition presents and are well prepared for it.
"It's with respect to taxation and finding that right balance in providing the incentives to companies to invest — they want a return on their investment — but at the same time making that social choice that governments make about how the benefits of the technology are distributed across people."
Listen to the full conversation at the top of this web post.
This segment was produced by The Current's Sujata Berry.