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Kolkata, Jul 2 () Acknowledging the liquidity crisis being faced by the MSMEs, leading bankers of the country on Thursday said they will continue to lend their support to these units even during the post-COVID era. <p>There is a need for the bankers to provide more support to the micro, small and medium enterprises, State Bank of India Managing Director Arijit Basu said. </p><p>Speaking at a webinar organised by ICC, he said, "MSMEs will remain a crucial cog in the wheel of the economy. For India to become self-reliant, MSMEs have an important role to play." </p><p>Basu said these units must have a viable business plan to avail credit from banks. </p><p>According to him, the fundamental issue that the corporates and MSMEs are facing is related to the stressed assets. </p><p>For SBI, he said that there is no worry to lend as the bank's provision coverage ratio (PCR) was around 85-87 per cent. </p><p>Basu hoped that the second half of the current fiscal will be good. </p><p>Punjab National Bank MD and CEO S S Mallikarjuna Rao said it is not that the MSMEs started facing the problem during the COVID-19 crisis. </p><p>"The MSMEs have been passing through tough times for the last two years. They have been facing cash flow problems," Rao said. </p><p>He said these units were not having surplus cash flow as their operations were at stress, while fixed costs did not reduce. </p><p>"There is a requirement for providing liquidity support to the MSMEs for which the government has come out with the credit guarantee scheme," he said. </p>He felt that the hand-holding will be required for the MSMEs even after the COVID-19 crisis. dc SBN BDC BDC

Bankers pledge continuing support to MSMEs during post-COVID era

<p>
	<br /> A recent trend doing the rounds on <keyword id="28120" type="CITY" weightage="80" keywordseo="Linkedin">LinkedIn</keyword>, the biggest professional networking site, has intrigued us a lot. It asks you what you would do if you were 22 again and the responses are pretty diverse. Opinions have been pouring in from C-suite guys to recent pass-outs, interns and mid-to-senior level executives. And the most striking concept I have come across till date is someone wanting to <keyword id="2312132" type="UNKNOWN" weightage="100" keywordseo="Change-job">change job</keyword> every month (for worthy reasons, of course). While that seems to be an extreme case, people in their early 20s are known to job-hop more than is good for professional health. Most of us do it for a bit of a raise or a better job profile – well, who wouldn’t if you get a custom-made position, instead of slogging at your old job and hoping to reach that slot someday? Some do it as they get bored with what they have been doing while others simply jump ship to avoid a <keyword id="2312133" type="UNKNOWN" weightage="100" keywordseo="Toxic-work-culture">toxic work culture</keyword>, a <keyword id="467176" type="UNKNOWN" weightage="100" keywordseo="Bad-boss">bad boss</keyword> or a combo of both.<br />
	 <br /> Whatever be your reason for job-hopping even when you are just one or two-job old (even <keyword id="67723" type="ORGANIZATION" weightage="100" keywordseo="HR">HR</keyword> guys consider it most natural for you to look around during this time to achieve <keyword id="34604" type="UNKNOWN" weightage="100" keywordseo="career-growth">career growth</keyword>), do not be led by money alone or assumption of power. <keyword id="10876" type="UNKNOWN" weightage="100" keywordseo="salary">Salary</keyword> rise becomes a routine all too soon and indulging in power play at office may actually hurt your <keyword id="2312143" type="UNKNOWN" weightage="100" keywordseo="Learning-graph">learning graph</keyword>, <keyword id="21700" type="UNKNOWN" weightage="100" keywordseo="Leadership-qualities">leadership qualities</keyword> and ultimately your <keyword id="2312144" type="UNKNOWN" weightage="100" keywordseo="Professional-integrity">professional integrity</keyword>.<br />
	 <br /> Moreover, <keyword id="2312146" type="UNKNOWN" weightage="100" keywordseo="Top-dollars">top dollars</keyword> and plum posts won’t be easy to come by. The Indian job market has been sluggish for some time now, as per ILO findings. <keyword id="6358907" type="ORGANIZATION" weightage="80" keywordseo="unemployment">Unemployment</keyword> rate in India has risen from 3.5% in 2011 to 3.7% in 2013 and it may further increase to 3.8%, according to the Global Employment Trends 2014 report. Of course, there are positive vibes all around and hiring across sectors is likely to warm up significantly under the new government led by <keyword id="6354477" type="PERSON" weightage="60" keywordseo="Narendra-Modi">Narendra Modi</keyword>. In fact, the job market is expected to grow at least 30% this fiscal. All that is good news, but the broader economic growth doesn’t see an instant change and it may take quite some time before you can pick and choose your next job. But don’t lose heart. With every job offer you get, comes some <keyword id="2312150" type="UNKNOWN" weightage="100" keywordseo="Hidden-perks">hidden perks</keyword> although you may not be aware of them.<br />
	 <br /> It is true that our perception has been different till date and take-home salary has always ranked high on an employee’s priority list. <keyword id="6357081" type="ORGANIZATION" weightage="100" keywordseo="Employees">Employees</keyword> in India prefer a <keyword id="1794997" type="UNKNOWN" weightage="100" keywordseo="competitive-salary">competitive salary</keyword> and related benefits over <keyword id="885084" type="UNKNOWN" weightage="100" keywordseo="career-progression">career progression</keyword>, according to a 2014 employees’ perception survey, conducted by global human resource company <keyword id="6439430" type="COMPANY" weightage="80" keywordseo="Randstad">Randstad</keyword>. That is in sync with the global traits, the survey says, but have you ever tried asking your HR guy whether your company offers the following benefits that can actually ensure your overall growth? If you swear by the G word (read growth) at <keyword id="6357280" type="PERSON" weightage="100" keywordseo="workplace">workplace</keyword> and your current job doesn’t offer these 5 hidden <keyword id="69022" type="UNKNOWN" weightage="100" keywordseo="perks">perks</keyword>, make sure you get them when you are looking for a change next time.<br />
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	<strong>1. Do you get performance-based rewards?</strong><br /> In sales jargon, they call it incentive and most of the C-suite guys are also entitled to it. However, most companies prefer to pay a flat amount if they are under a contractual obligation to pay <keyword id="50592" type="ORGANIZATION" weightage="100" keywordseo="Bonus">bonus</keyword>. Others simply skip it if it is not there in your appointment letter. But there are exceptions as well. Some companies offer project-specific <keyword id="29962" type="UNKNOWN" weightage="100" keywordseo="incentives">incentives</keyword> or split profits (but these are mostly start-ups) to keep their employees happy and motivated.<br />
	 <br /> In the first company that I joined as an intern, no one was entitled to bonus but a token amount was handed over each year, based on one’s performance. Mind you, it was not a flat amount and varied from person to person. But it really kept us motivated and also acted as a timely warning. If we got an abysmally low amount or landed up in the ‘no-cheque zone,’ it was time to do some self-scrutiny and act upon it. As the annual <keyword id="538384" type="ORGANIZATION" weightage="100" keywordseo="performance-appraisal">performance appraisal</keyword> was nearly 6 months away (the incentive used to come around Diwali), there was plenty of time to move up the performance scale or to look around, find a more suitable position and quit without feeling too hurt.<br />
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	<strong>2. Can you play the <keyword id="149794" type="POSITION" weightage="100" keywordseo="strategist">strategist</keyword>?</strong><br /> Well, we don’t mean you are going to do the CEO-level stuff. But do you have the freedom to ideate and brainstorm every now and then? Will the company top brass (or at least your own <keyword id="553771" type="POSITION" weightage="80" keywordseo="line-manager">line manager</keyword>) have the time and patience to listen to you? Do they acknowledge the value of your ideas and try to get them implemented? If the answer is ‘no’ in most of the cases, it is quite likely that you are working like an <keyword id="2312170" type="UNKNOWN" weightage="100" keywordseo="Organisational-cog">organisational cog</keyword>, instead of sharing your company’s vision and goals. If that is the case, you will soon <keyword id="2312174" type="UNKNOWN" weightage="100" keywordseo="Lose-motivation">lose motivation</keyword> and work will suffer consequently.<br />
	<br /> However, it is wrong to assume that only big corporations fall victim to ‘<keyword id="2312169" type="UNKNOWN" weightage="100" keywordseo="Communication-failure">communication failure</keyword>.’ It does happen in a 10-strong company if one person chooses to take over the meeting procedure and others are just too polite/scared/disinterested to intervene. In contrast, some big companies keep ‘idea boxes’ and pass them around for you to contribute and participate. If your firm does that, don’t shy away from that extra effort. Taking an active interest in your company’s well being is a smart move that will take you far.<br />
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	<strong>3. Do they run an <keyword id="2312177" type="UNKNOWN" weightage="100" keywordseo="Innovation-lab-at-workplace">innovation lab at workplace</keyword>?</strong></p>
<p> Strategy is often limited to your own projects, but <keyword id="94495" type="ENTERTAINMENT" weightage="100" keywordseo="Innovation">innovation</keyword> has no limit. Your company may not do it the Google way and allow you to work on random projects outside your immediate duty zone (well, as per <em>Quartz</em>, even Google has effectively done away with the ‘<keyword id="1823038" type="UNKNOWN" weightage="100" keywordseo="20-time">20% time</keyword>,’ which allowed its employees to take one day a week to work on independent projects). But do you get a fair chance to work on your ‘interest’ areas without hurting your productivity? Can you stretch your capabilities and learn <keyword id="1438120" type="UNKNOWN" weightage="100" keywordseo="new-skills">new skills</keyword>? Enhance processes? Put your <keyword id="6360549" type="UNKNOWN" weightage="100" keywordseo="creativity">creativity</keyword> to work and ‘<keyword id="1620972" type="ORGANIZATION" weightage="100" keywordseo="innovate">innovate</keyword>’ something that will benefit your company?<br />
	 <br /> Although a risky proposition (most project managers will term it as ‘messing up’), employee ‘me-time’ can be highly rewarding if the person involved has the right kind of focus and enthusiasm. What’s more, if you are good enough in your new <keyword id="44111" type="CITY" weightage="80" keywordseo="Avatar">avatar</keyword>, you can easily seek ‘change’ within the company and start growing. All of us have seen people who love to get out of their <keyword id="1093785" type="UNKNOWN" weightage="100" keywordseo="comfort-zone">comfort zone</keyword> and do something new in order to prove themselves. If your company supports it and encourages an ‘open house’ culture, that’s the best thing you can ever desire.<br />
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	<strong>4. What is the <keyword id="25411" type="UNKNOWN" weightage="100" keywordseo="happiness-quotient">happiness quotient</keyword>?</strong><br /> Once again, we come back to the <keyword id="1591413" type="UNKNOWN" weightage="100" keywordseo="Company-culture">company culture</keyword> and how much it cares for you. Your <keyword id="2312196" type="UNKNOWN" weightage="100" keywordseo="New-organisation">new organisation</keyword> may have an irresistible culture that makes work fun, exciting and challenging. On the other hand, it may feel like a <keyword id="2312171" type="UNKNOWN" weightage="100" keywordseo="Daily-grind">daily grind</keyword> that you could be too eager to escape. While a newcomer should be ready to work hard and grow in more ways than one, is the organisation ready to welcome you on board as one of them? Do you have a mentor from Day I who will help you learn new things and handhold you to success? Do you have good leaders who genuinely care about you, your <keyword id="2312153" type="UNKNOWN" weightage="100" keywordseo="Professional-growth">professional growth</keyword> and your <keyword id="2312212" type="UNKNOWN" weightage="100" keywordseo="Personal-well-being">personal well being</keyword>? Do you get enough <keyword id="2312213" type="UNKNOWN" weightage="100" keywordseo="Praise-in-public">praise in public</keyword> and reprimands only in private? And finally, does your organisation share both rewards and pain with its employees? After all, there are plenty of companies that put their people in ‘pressure cooker’ situation all the time, without praising the efforts of the employees.<br />
	 <br /> All these answers may not be forthcoming within the first day or two, but a close look at your co-workers will soon help you understand the company’s EQ and happiness quotient. Every company has its own way of dealing with <keyword id="2312217" type="UNKNOWN" weightage="100" keywordseo="Corporate-politics">corporate politics</keyword>, policies and procedures. If you have seniors who can navigate you safely through these potential landmines, motivate you throughout the <keyword id="2312240" type="UNKNOWN" weightage="100" keywordseo="Daily-slog">daily slog</keyword> and provide plenty of opportunities to go up the <keyword id="2312242" type="UNKNOWN" weightage="100" keywordseo="Growth-ladder">growth ladder</keyword>, accept that job and stick to it, no matter what others say.<br />
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	<strong>5. Can you break the proverbial glass wall?</strong><br /> It has got nothing to do with the done-to-death, gender-related stories of the corporate world. Sure, they may happen to you when you reach that coveted level. But you will find the proverbial glass wall almost everywhere irrespective of gender bias. For instance, if you are a coding wizard and want to be a <keyword id="6544760" type="POSITION" weightage="80" keywordseo="project-manager">project manager</keyword>, your line <keyword id="6362609" type="POSITION" weightage="80" keywordseo="Manager">manager</keyword> may not want to let you go as it looks like a <keyword id="2312244" type="UNKNOWN" weightage="100" keywordseo="Lose-lose-situation">lose-lose situation</keyword>. You will be prone to make mistakes in your new role while your manager loses an <keyword id="2312249" type="UNKNOWN" weightage="100" keywordseo="Efficient-employee">efficient employee</keyword> who has been doing his/her job commendably all this time. On the other hand, a <keyword id="2312250" type="UNKNOWN" weightage="100" keywordseo="Growth-dead-wall">growth dead wall</keyword> is bound to drive an ambitious person out.<br />
	 <br /> Here is one <keyword id="2312256" type="UNKNOWN" weightage="100" keywordseo="Professional-dilemma">professional dilemma</keyword> that most companies and most individuals suffer from. When a former colleague was working for a small publication house and wanted to expand her role beyond everyday operations, the <keyword id="5645" type="POSITION" weightage="60" keywordseo="CEO">CEO</keyword> was openly unimpressed. “We are a small organisation and there’s not much scope for doing anything else,” he said during the appraisal. The same happened to a guy in a large firm that would not expand one of its units and refused to allocate funds for digital branding. In about a year, that unit shut down.<br />
	 <br /> In all these cases, you can clearly see where the glass wall is. As one start-up CEO once told me, “The problem is not in the budget. It’s the mindset. You want to play it safe and get the maximum out of your employees with minimum investment. But that’s against the <keyword id="34859" type="UNKNOWN" weightage="80" keywordseo="business-law">business law</keyword> – great returns don’t come without good investments. <keyword id="2312270" type="UNKNOWN" weightage="100" keywordseo="Reward-your-people">Reward your people</keyword> with growth and your company will surely advance.” If your organisation walks the talk like this CEO does, you have it what so many others desire. Stay put in this job and let your dreams grow.<br />
	 <br />
	<strong>Images:</strong> Thinkstock/Getty Images</p>

When You Are 22
And Job-hunting, Look For These 5 Hidden Perks

<p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><ul class="summary-list"><li><strong>Two members of Google's now-defunct AI ethics council took the stage at the CognitionX AI conference in London on Wednesday.</strong></li><li><strong>Academics Joanna Bryson and De Kai were asked about what happened to the council, which was abruptly dissolved earlier this year following criticism of one of its members.</strong></li><li><strong>Bryson says Google's enormous global influence means it should be treated like a "world power."</strong></li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li></ul><p>A member of Google's disbanded AI ethics council said on Wednesday that the company's enormous global influence means it needs to be treated like a world power.</p><p>Joanna Bryson, an associate professor in computer science at the University of Bath, spoke about Google's short-lived AI ethics council at the CognitionX conference in London. She was joined by De Kai, a fellow former council member and AI expert at the Hong Kong University of Science and Technology.</p><p>The pair were speaking at a panel on governance and accountability in AI, and the moderator asked them to address the "elephant in the room."</p><p>The Google council was disbanded in April after criticism of the appointment of Kay Coles James, the head of a right-wing thinktank who been accused of anti-LGBTQ and anti-immigrant rhetoric. <a href="https://www.businessinsider.com/google-employees-petition-against-kay-coles-james-ai-ethics-board-2019-4?r=US&amp;IR=T"></a></p><p><a href="https://www.businessinsider.com/google-employees-petition-against-kay-coles-james-ai-ethics-board-2019-4?r=US&amp;IR=T">More than a thousand Google employees signed a petition to have James removed</a>, arguing her inclusion undermined "Google's position on AI ethics and fairness."</p><p>Bryson suggested that the incident should prompt lawmakers around the world into thinking about how Google should be regulated, given its huge international reach.</p><p>"It's worth engaging with Google because it is a world power, and it is because it's a world power that they also need to engage with all sides of the political spectrum," Bryson said.</p><p>"We need to start negotiating with these large organisations and figuring out how to govern them... A nation can govern the small or medium-sized companies in that government, but there is no one government that is in charge of all the countries where Google has impact."</p><p>She added: "We need to figure out a way to bring this into the world order, including getting these companies to pay their taxes."</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/sundar-pichai-admits-youtube-failings-on-harmful-content-2019-6?r=US&amp;IR=T">"We aren't quite where we want to be": Google's CEO admits to failings on harmful content after YouTube's week from hell</a></em></p><p>After Google dissolved the council in April, <a href="https://www.businessinsider.com/google-ai-ethics-board-criticism-killing-after-a-week-joanna-bryson-2019-4?r=US&amp;IR=T">Bryson hit out at the company</a> saying it had "pulled the plug rather than defend themselves."</p><p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><p>De Kai took issue with the way the advisory council had been portrayed in the media as an independent oversight board. "If it's a body set up by Google, how on earth could it be independent," he said.</p><p>"This was designed to be an external advisory council that could bring in voices that could articulate cultures from outside the Google-California culture bubble. So that they could better be informed and think through, analyse the unintended consequences of policy decisions outside the California bubble."</p><p>De Kai and Bryson said that they had been signed on to the council in October and November 2018 respectively, months before it was announced to the world.</p><p>De Kai also said he thought the "saga" of the Google ethics council had itself been impacted by AI because of the way the story spread across social media.</p><p>"I think that this blew up in a way amplified by AI because this came across every single feed, that it's actually illustrative of the problems we face within AI," he said.</p><p class="tagline">Get the latest Google stock price<a href="http://markets.businessinsider.com/stock/GOOG-Quote"> here.</a></p><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/how-tennis-balls-are-made-processed-penn-manufactured-satisfying-machines-2017-5">Tennis balls are made using this 11-step process - and it's quite satisfying to watch</a></h3>        <div>                    </div>    </div>

A member of Google's disastrous AI council says the company needs to be treated like a 'world power'

<ul><li>Kaustubh Chandra- Director – Marketing &amp; Digital Sales Group, <keyword id="9145520" type="COMPANY" weightage="20" keywordseo="ntt-ltd">NTT Ltd</keyword>. in India pens down how marketers world over have seen their roles change immensely after the pandemic. </li><li>He shares a few factors that marketers should keep in mind while talking to their consumes and why they shouldn't be afraid to get creative and experiment with their marketing strategies. </li></ul>Faced with a global pandemic, economic turmoil, and social disruption, marketers world over have seen their roles change immensely, and at an extremely rapid pace. Traditional, tried and tested, by-the-book marketing practices have been challenged like never before, paving the way for new paradigms. Even if organisations started the year with a packed pipeline, few businesses have escaped the repercussions, with a large share of B2B buyers re-evaluating purchase decisions because of the pandemic. Reduced quotas, slashed growth forecasts and marketing budgets are imminent for many companies that have been adversely affected by the virus. Since the management is closely scrutinizing the dollars spent, B2B marketing teams needed to be more intentional, direct, and repetitive about ROI. CMOs must emphasize that they have very clear, demonstrable business outcomes, highlighting the direct connection between their strategies and the organization’s goals. In today’s reality, it boils down to embracing a rudimentary concept of harnessing the combined potential of sales and marketing to develop an integrated and connected revenue-focused team.<br /><br />Today, successful companies are becoming more outcome-driven, adapting their products, solutions and services to fit their customers’ strategies, leveraging digital technologies and data, to deliver personalization at scale. The unforeseen situation has further challenged marketers to get creative and find opportunities, to deliver in a year snowballed by uncertainties. We can no longer chart out a year’s strategy in advance in such dynamic times, and only pivoting while finding new solutions will help you course-correct during your journey. Heather Zynczak, CMO, <a href="https://www.pluralsight.com/">Pluralsight</a>, and one of the most successful CMOs in the industry mentions that for 99% of the companies, the most important thing right now is revenue. To substantiate this opinion, she rightly points out that if there is a wall between sales and marketing, you have already lost the battle. <br /><br />Pioneered by global tech giants, the use of digital technology is more relevant than ever before in the current scenario, where the face-to-face component of sales is no longer viable. Therefore, the onus of shaping the end-to-end customer journey through GTM strategy, content, automation, brand building, social media engagement, PR and communication lies with the marketing team. All of this boils down to delivering tangible business outcomes. For that reason, more and more we are witnessing the evolution of the CMO’s role to that of a Chief Growth Officer (CGO), one who is responsible for anything that identifies newer areas (or accounts/ clients/ segments) and generates revenue, while helping to increase the wallet share in the existing ones. It’s a hybrid role matrixed between marketing, sales, product, tech, and part customer advocate. As the name suggests, the objective is to drive growth with a farsighted vision and implement agile strategies that ultimately feed customer needs, and in turn the business goals.<br /><br /><strong>Combining forces </strong><br /><br />We are witnessing the emergence of a new marketing paradigm, with a breed of marketers who are now contributing to long term and short-term strategy in boardroom discussions, positively impacting the company’s top and bottom lines. The best in breed are taking this challenge head-on to transform marketing into the driving force behind revenue-generating go-to-market strategies. As outlined by Deloitte, forward-thinking B2B marketing leaders are now donning multiple hats and championing roles such as of a chief storyteller, innovation catalyst, capability builder, customer champion and a growth driver. <br /><br />Complex buying journeys, longer sales cycles, and the fact that the buyers’ journey typically spans a multitude of channels means that building a scalable revenue machine requires cross-functional effort. Nonetheless, companies need to track leads end-to-end, including lead quality, lead velocity, lead generation and conversion right from the funnel stage. Map out your ideal buyer’s journey, from awareness of need through education, vendor, and solution explorations, committing to a solution, justification, and ultimately the influencing the purchase decision.<br /><br /><strong>Marketing with the soul of a start-up and a hunting mind-set<br /></strong><br />When the entire marketing operates with a business first, hunting mindset, strategies change as per the end goal. Brand building is just another cog in the marketing wheel; the agility and speed that marketers can develop to listen to their customers, intelligently tap intent / distress signals, and correspondingly tailor their response will define the future of marketing. By adopting a new way of thinking, and with dedicated energy, resources to mine existing business, the goal is to build and nurture relationships you have within your target account and move them from one stage to the next. Harnessing the potential of existing, emerging, digital first and mid-market accounts can present an ocean of untapped business for marketers. Combining efforts will help marketing efficiently engage, nurture, and grow these accounts and be an equal partner in the organisation’s growth journey. <br /><br />As has been demonstrated in industry after industry, early movers can establish significant advantages, while laggards will be left behind. Do not be afraid to get creative and experiment with your marketing strategy, as Seth Godin rightly said, “The cost of being wrong is less than the cost of doing nothing.”<br />

The new age marketing of multiple hats and revenue generation

<p><strong><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div></strong></p><ul><li><strong>Facebook's AI chief has slammed Sophia the robot, a human-looking robot which has made headlines for saying it wanted to "destroy all humans" in conversations with journalists.</strong></li><li><strong>Facebook's Yann LeCun said Sophia was "complete bullsh*t" and criticised media for giving coverage to "Potemkin AI."</strong></li><li><strong>Ben Goertzel, chief executive of Sophia's creator SingularityNET, responded by criticising Facebook and the way it was abused to spread Russian propaganda around the US election.</strong></li><li><strong>Goertzel said he had never pretended Sophia was close to human-level intelligence and that people loved interacting with the robot.</strong></li></ul><p><br>Sophia the robot <a href="http://uk.businessinsider.com/interview-ai-robot-sophia-hanson-robotics-2017-12">has made headlines at Business Insider</a> and other media outlets for its threats to <a href="https://www.cnbc.com/video/2016/03/16/this-hot-robot-says-she-wants-to-destroy-humans.html">destroy all humans</a>, for <a href="http://www.businessinsider.com/sophia-robot-citizenship-in-saudi-arabia-the-first-of-its-kind-2017-10">becoming an actual citizen of Saudi Arabia</a>, and for rejecting marriage proposals.</br></p><p>But Facebook's director of artificial intelligence research, Yann LeCun, is not convinced. Tweeting out Business Insider's December interview with Sophia, LeCun wrote: "This is to AI as prestidigitation [<a href="https://en.oxforddictionaries.com/definition/prestidigitation">conjuring tricks</a>] is to real magic. Perhaps we should call this 'Cargo Cult AI' or 'Potemkin AI' or 'Wizard-of-Oz AI'. In other words, it's complete bullsh*t (pardon my French)."</p><p>He concluded: "Tech Insider: you are complicit in this scam." Ouch.</p><p>LeCun didn't respond to Business Insider's request for elaboration but his criticism appears to be that Sophia, which can talk to humans in a conversational manner, isn't human-level artificial intelligence or even close. Instead, it's more like a chatbot, with no understanding of what it's doing.</p><p>Ben Goertzel, CEO and chief scientist at Sophia's creator SingularyNET, said he had never pretended Sophia was close to human-level intelligence.</p><p>He said the robot was a piece of human-looking hardware which ran different programmes under different circumstances. For example, when Sophia is talking to a journalist, it's running software that turns it into a "sophisticated chatbot." When it's giving a speech at the United Nations, it's running off a pre-programmed script. Sometimes it runs on Goertzel's OpenCog AI software system.</p><p>And Goertzel had some sharp words for Facebook and Yann LeCun too.</p><p>"Obviously I don't agree with his statements," Goertzel told Business Insider. "I find it kind of funny. Like Facebook is obviously gathering everyone's personal data and then using machine learning to post Russian-generated fake news onto everyone's Facebook page to make them vote for Donald Trump. After using machine learning this way to manipulate people's minds, Facebook wants to take on a startup for making a loveable robot."</p><p>This is something of an exaggeration - Facebook estimated that 150 million Americans saw misinformation relating to the US election. It's a substantial amount, but not "everyone," and it's a stretch to say this forced anyone to vote for Donald Trump.</p><p>Goertzel acknowledged Sophia isn't artificial general intelligence, the industry term for human-level machine intelligence, and said no one's achieved this yet.</p><p>"The current software controlling Sophia is not human-level general intelligence, but neither is anything Facebook is doing, nor is anything Google is doing," he said. "What's a bit outrageous to me in comments like Yann LeCun's is that it's exalting certain forms of narrow AI and saying the kinds of narrow AI he is doing at Facebook is 'real AI', and the kinds of narrow AI underlying Sophia is not real AI. That's bullshit."</p><p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><p>While Goertzel said he's never pretended Sophia has human capabilities, SingularityNET chairman David Hanson <a href="https://www.youtube.com/watch?v=Bg_tJvCA8zw">has described Sophia as "basically alive."</a></p><p>This, combined with Sophia's ongoing media coverage, explains the criticism. But Goertzel thinks other AI organisations are jealous of the public attention - and says it's good normal people are debating and talking about artificial intelligence.</p><p>"I think the negative reactions are from jealous people in AI or the tech world saying, 'Why aren't people paying attention to our tech?'" he said.</p><p>"Most people don't care," he added. "Even if you tell them she doesn't understand, people want to relate to her as a character anyway."</p><p><strong>Here's Business Insider's most recent interview with Sophia:</strong></p><div></div><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/monster-machines-changing-construction-2017-12">These monster machines are changing the world of construction</a></h3>        <div>                    </div>    </div></hr>

Facebook's AI boss described Sophia the robot as 'complete b------t' and 'Wizard-of-Oz AI'

<p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><ul class="summary-list"><li>WeWork cofounder Adam Neumann isn't the only person to have hyped up the troubled startup - investor SoftBank also played a key role.</li><li>In 2018, senior SoftBank exec Rajeev Misra loftily predicted the business could one day be worth as much as $100 billion.</li><li>Adam Neumann has now resigned as CEO amid intense scrutiny of his business practices and lifestyle.&#xa0;</li><li>Misra's remarks highlight how investors charged with oversight of the company were helping build the buzz that has since come crashing down, as its IPO plan goes off the rails.&#xa0;</li><li>Footage of the executive's remarks subsequently disappeared from YouTube, but Business Insider is now publishing the full audio.&#xa0;&#xa0;</li><li><strong><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</strong></li></ul><p>Adam Neumann has fallen on his sword, stepping down as chief executive of WeWork in an attempt to help the office rental giant's bungled initial public offering (IPO) get back on track.</p><p>After weeks of intense scrutiny of the company's business model and the 40-year-old CEO's personal life that has thrown a spanner in the works of its attempts to go public, he has been replaced by two new co-CEOs, Artie Minson and Sebastian Gunningham - <a href="https://www.businessinsider.com/heres-everything-we-know-about-sebastian-gunningham-and-artie-minson-2019-9?r=US&amp;IR=T">seasoned executives with years of management under their belts</a>.</p><p>With his idiosyncratic behaviour and his unconventional (and sometimes outlandish) remarks, Neumann has been emblematic of WeWork's strangest excesses. His departure is optically useful, and may allow WeWork's bankers and backers to bill the company as learning from its mistakes and placing grown-ups in charge.</p><p>But, as evidenced by one curious episode last year, Neumann wasn't the only over-optimistic hype man when it comes to WeWork.</p><p>In May 2018, one of SoftBank's most senior executives appeared onstage at a conference in London and announced that WeWork was raising funds at a $35 billion valuation - and that it could one day be a $100 billion business.</p><p>He also outlined how WeWork would expand from simply renting out office space to playing a more active role in construction and design, and said the firm's revenue growth would come from cross-selling services to its shared office members.</p><p>The executive was Rajeev Misra, the London-based chief executive of SoftBank Investment Advisers. This is the arm of SoftBank overseeing its mammoth $100 billion Vision Fund, which has funneled billions of dollars into Uber, DoorDash, Slack and, of course, WeWork. (Misra&#xa0;does not sit on WeWork's board. SoftBank's board seat is occupied by <a href="https://www.businessinsider.com/meet-ron-fisher-softbank-vision-fund-behind-wework-valuation-ipo-2019-9?r=US&amp;IR=T">Ron Fisher</a>, the firm's vice chairman and head of investment.)</p><p>"A year ago we were told that WeWork was extremely overvalued, $17 billion for a real estate company doing office space. Well guess what, they're looking to raise capital at $35 billion today. Maybe it's overvalued but I believe they're a $100 billion company in the next few years," he said.&#xa0;</p><p>"They will completely go horizontal, and go beyond office space into manufacturing furniture for themselves, to becoming a leader in real estate as an industry, to building offices, to mechanising construction, etcetera etcetera."</p><p>Misra was speaking at CogX, a comparatively new UK conference focused on artificial intelligence - a key plank of the Vision Fund's investment strategy. SoftBank was also sponsoring the conference. Both were unusual. The Vision Fund hadn't yet closed the full $100 billion and SoftBank was generally keeping a low profile.</p><p>Still, Misra seemed comfortable talking about the fund's investment strategy up on stage before an audience of startups, investors, journalists and other industry figures.</p><p>Perhaps he was too comfortable. It turns out no one had ever mentioned WeWork's new fundraise publicly, nor had anyone mentioned a possible $35 billion valuation. WeWork's most recent raise had been in July 2017, the the year before, which <a href="https://www.forbes.com/sites/stevenbertoni/2017/07/10/wework-hits-20-billion-valuation-in-new-funding-round/#75a0b7331194">reportedly valued the company at a more modest $20 billion</a>.</p><p>And certainly no one had mentioned a prospective $100 billion valuation.</p><p>Business Insider <a href="https://www.businessinsider.com/wework-wants-to-raise-money-at-35-billion-valuation-softbank-says-2018-6?r=US&amp;IR=T">published a write-up of his remarks the next day</a> with additional comment from WeWork, which had evidently been caught off-guard.</p><p>It was, pretty clearly, a gaffe. Although Misra's remarks were also captured on video by the conference organisers and posted to CogX's YouTube channel, that video quietly disappeared after Business Insider asked both WeWork and SoftBank about his comments. SoftBank declined to comment at the time.</p><p>A few days later, Axios' Dan Primack suggested that Misra's revelation <a href="https://www.axios.com/newsletters/axios-pro-rata-f418c292-2127-4a96-a81d-9036120786f3.html">may have even violated SEC rules</a>. It wouldn't be the first time <a href="https://techcrunch.com/2018/05/09/walmart-softbank-flipkart-masayoshi-son/">a SoftBank executive has let the news of a major deal slip early</a>.</p><h2><strong>'A year ago we were told that WeWork was extremely overvalued'</strong></h2><p>Business Insider recorded Misra's remarks, and is now publishing that audio in full.</p><p>&#xa0;</p><p>Here is what the finance executive said about WeWork (emphasis added). For context, Misra was asked by the conference moderator whether the Vision Fund was fuelling a bubble and spiraling valuations:</p><p style="padding-left: 40px;">"Valuations are high in certain companies, valuations are low in certain others. When you're taking a 10 year view, a 10%, 20% difference in valuation doesn't matter if you can get the WeWorks. It's like saying, look, I'm going to [unclear] and try to negotiate the 10% or 15% extra discount. We can do that anyway, we got into Uber at a 30% discount to the previous round, in the secondary.</p><p style="padding-left: 40px;">"But the key that we look for is cos that we believe going to be the winners in that industry. <strong>WeWork, a year ago we were told that WeWork was extremely overvalued, $17 billion for a real estate company doing office space. Well guess what, they're looking to raise capital at $35 billion today. Maybe it's overvalued but I believe they're a $100 billion company in the next few years.</strong> They will completely go horizontal, and go beyond office space into manufacturing furniture for themselves, to becoming a leader in real estate as an industry, to building offices, to mechanising construction, etcetera etcetera.</p><p style="padding-left: 40px;">"The key is to own the customer. They own their consumer and that is extremely valuable. [They have] one or&#xa0; two million members right now, 100,000 last year, they ended last year at half a million across the globe. They will own consumers who use their app, work in their offices five days a week. And the ability to cross-sell through those members and the ability to go downstream to create those offices substantially cheaper... Not to get into WeWork in a big way, getting back to valuation, we believe if we invest in winners, of course we don't do early-stage investing any more, we do late-stage growth investing, if we believe our investment will go up 3, 4, 5x, why bother 10%, 20% valuation."</p><p>Elsewhere in the recording, Misra <a href="https://www.businessinsider.com/softbank-6-months-uber-8-billion-2018-6?r=US&amp;IR=T">talks about SoftBank bringing "synergies" to Uber</a> because it also holds stakes in other rival ride-hailing companies around the world. He also discussed SoftBank's acquisition of ARM, its investments in Indian hotel marketplace Oyo, and how SoftBank helps its portfolio firms scale into Asia.</p><h2>Those charged with oversight helped contribute to the hype</h2><p>WeWork would go on to hit a $47 billion valuation - but has since had a dramatic reversal of fortunes.</p><p>In the run-up to its planned IPO, Misra's exuberance for a sky-high valuation has been mirrored by the other bankers WeWork talked to. <a href="https://www.ft.com/content/272d408e-de40-11e9-b112-9624ec9edc59">According to a Financial Times report</a>, JPMorgan told the company it could be worth up to $63 billion in its public listing. Goldman said it could be as much as $96 billion. Morgan Stanley reportedly valued it at as much as a staggering $104 billion.</p><p>However, intense media and investor scrutiny of WeWork's business practices, Neumann's unusual degree of control over the company, and his lifestyle (there are reports of smoking weed on private jets and presidential ambitions) has since driven the IPO process off the rails. Neumann has now left his post. There are rumours of thousands of employee layoffs coming. And when the company does eventually go public, its valuation seems certain to be dented,&#xa0;<a href="https://www.businessinsider.com/wework-valuation-cut-20-billion-may-delay-ipo-report-2019-9?r=US&amp;IR=T">and potentially halved</a>.</p><p>In the aftermath, Misra's lofty pronouncements in 2018 - like the heady valuations suggested by Morgan Stanley and the rest - highlight how those meant to keep Neumann and WeWork in check instead helped directly contribute to its over-hyped image and stratospheric expectations.</p><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/veggie-burger-taste-test-burger-king-impossible-burger-beyond-meat-2019-9">We compared 13 veggie burgers and Burger King's Impossible Burger was the only one that stood out</a></h3>        <div>                    </div>    </div>

SoftBank thought WeWork could be a $100 billion company, and audio from 2018 shows how it inflated the hype

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Getty</span></p><p class="caption">WeWork cofounder Adam Neumann.</p></div><p></p></div></div></p><ul><li><strong>Office sharing company WeWork is looking to raise new funds at a valuation of $35 billion, according to an executive at SoftBank, which is a major WeWork investor.</strong></li><li><strong>Rajeev Misra, who runs SoftBank's $100 billion Vision Fund, said the company would be worth $100 billion within the next few years.</strong></li><li><strong>If WeWork manages to secure a new round of investment at that valuation, WeWork would overtake SpaceX and Airbnb to become the second most valuable startup in the world.</strong></li><li><strong>WeWork, last said to be valued at $20 billion, is trying to counter talk of overvaluation by pointing to its expansion beyond taking on long-term leases and jazzing up office spaces.</strong></li><li><strong>However, some skeptics think WeWork is a jumped up real-estate company.</strong></li></ul><p><br />Property startup WeWork is seeking to raise new funds at a valuation of $35 billion, according to one of its biggest investors.</p><p>Rajeev Misra, chief executive of SoftBank's $100 billion Vision Fund, told the CogX conference in London that WeWork was in the process of raising capital at the newly disclosed valuation, and predicted it would be worth $100 billion in the next few years.</p><p>Misra's comments will raise eyebrows, given WeWork has raised several billion dollars in venture capital to date, <a href="https://www.bloomberg.com/news/articles/2018-04-25/wework-boosts-junk-bond-offering-to-702-million-in-debut-sale">another </a><a href="https://www.bloomberg.com/news/articles/2018-04-25/wework-boosts-junk-bond-offering-to-702-million-in-debut-sale">$702 million in its bond market debut,</a> and is burning through cash. WeWork's most recent fundraise, a Series G round, reportedly <a href="https://www.forbes.com/sites/stevenbertoni/2017/07/10/wework-hits-20-billion-valuation-in-new-funding-round/#75a0b7331194">valued the company at $20 billion.</a></p><p>A $35 billion valuation would also mean WeWork has overtaken Airbnb and SpaceX to become the second most valuable startup in the world behind Uber.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Phil McCarten/Reuters</span></p><p class="caption">SoftBank Vision Fund CEO Rajeev Misra</p></div><p></p></div></div></p><p>SoftBank invested $4.4 billion in WeWork in March 2017, some of it through its Vision Fund. The deal valued WeWork at $17 billion at the time, despite some skeptics seeing WeWork as an over-valued real-estate company. WeWork then went on to raise another $760 million in July 2017, which is the round that reportedly bumped the company's valuation up to $20 billion.</p><p>"A year ago, we were told that WeWork was overvalued [at] $17 billion for real estate," Misra said on Tuesday. "Guess what, they are looking to raise capital at $35 billion today. Maybe it's overvalued, but I believe they'll be a $100 billion company in the next few years."</p><p>Misra did not go into further detail about WeWork's current fundraising efforts, nor did he say whether SoftBank was participating. A SoftBank spokesman declined to provide additional clarification.</p><p>WeWork declined to comment on the valuation number and the possibility of a raise.</p><h2>WeWork is counteracting chatter about overvaluation by pointing to the ways it will diversify revenue </h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>WeWork</span></p></div><p></p></div></div></p><p>WeWork currently has 256,000 members across 22 countries and is projecting 400,000 members by the end of 2018. The company has hit a predicted revenue run rate of $1 billion, and is projecting a run rate of $2.3 billion by the end of the year.</p><p>The company's rapid expansion and <a href="https://www.recode.net/2018/3/7/17086788/wework-acquisition-list-conductor-meetup-flatiron">multiple, diverse acquisitions</a> mean it's burning money. Skeptics worry that WeWork's core proposition of taking on long leases, doing up office spaces, then subleasing them don't justify its huge valuation. "If you had positioned this as a real-estate company, it wouldn't be worth this," Starwood Capital Group CEO Barry Sternlicht <a href="https://www.wsj.com/articles/wework-a-20-billion-startup-fueled-by-silicon-valley-pixie-dust-1508424483">told the Wall Street Journal last October</a>.</p><p>In an interview with Business Insider, chief product officer Shiva Rajaraman said WeWork was developing a suite of new services. He pointed to "Powered by We," an office management service targeted at bigger enterprises and launched late last year. The idea is that WeWork draws on its observations of how companies and employees work to design more thoughtful office spaces for big firms.</p><p>Rajaraman said: "When you look at a big <keyword id="6356323" type="UNKNOWN" weightage="60" keywordseo="enterprise">enterprise</keyword>, a Fortune 500-level company... maybe they have two locations. If they work with WeWork, let's say they spill into a few new markets and those sit inside a WeWork. We [then] manage their space, their main campus and flexible space in a WeWork, that's really the entirety of the platform.</p><p>"Many big companies have more or less space than they need. If they have more space, they can work with us, [we] take one floor and turn it into a WeWork because [they] don't need it now. That allows them flexibility."</p><p>"Powered by We" may give WeWork more stable income from established firms. Rajaraman said "Powered by We" customers, which reportedly include IBM and Airbnb, might pay an initial scoping and redesign fee, then an ongoing service charge.</p><p>"It's a very important and great new growth trajectory for the business," he said.</p><h2>WeWork's investors think the company can transcend real-estate and provide additional services that are worth paying for</h2><p>Ultimately, investors' belief in WeWork seems to stem from their conviction that the company will make itself indispensable to its members by selling them a community. That's why WeWork acquired Meetup last year, a community organising platform to let people with the same interests and hobbies find each other, and the Flatiron coding school so that it can offer training to members.</p><p>"They will go completely horizontal beyond office spaces to manufacturing furniture for themselves... becoming a leader in real estate as an industry," said Misra. "The key is to own the customer. They own their customer, and that is extremely valuable."</p>        <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/which-macbook-buying-guide-2018-5">How to know which MacBook you should buy</a></h3>        <div>                    </div>    </div>

WeWork is looking to raise new funds at a $35 billion valuation, according to its major investor SoftBank

<p><span style="font-size: 15px; line-height: 1.5em;"><div class="KonaFilter image-container display-table float_right"><div><div class="image"></div><p></p></div></div></span>IF THERE IS a technological revolution in progress, rich economies could be forgiven for wishing it would go away. Workers in America, Europe and Japan have been through a difficult few decades.</p>
<p><span style="font-size: 15px; line-height: 1.5em;">In the 1970s the blistering growth after the second world war vanished in both Europe and America. In the early 1990s Japan joined the slump, entering a prolonged period of economic stagnation. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">Brief spells of faster growth in intervening years quickly petered out. The rich world is still trying to shake off the effects of the 2008 financial crisis. </span></p>
<p><span style="font-size: 15px; line-height: 1.5em;">And now the digital economy, far from pushing up wages across the board in response to higher productivity, is keeping them flat for the mass of workers while extravagantly rewarding the most talented ones.</span></p>
<p>Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries. That was less than the rate of economic growth over the period and far less than in earlier decades.</p>
<p>Other countries fared even worse. Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all. And, critically, those averages conceal plenty of variation. Real pay for most workers remained flat or even fell, whereas for the highest earners it soared.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image"></div><p></p></div></div></p>
<p>It seems difficult to square this unhappy experience with the extraordinary technological progress during that period, but the same thing has happened before. Most economic historians reckon there was very little improvement in living standards in Britain in the century after the first Industrial Revolution. And in the early 20th century, as Victorian inventions such as electric lighting came into their own, productivity growth was every bit as slow as it has been in recent decades.</p>
<p>In July 1987 Robert Solow, an economist who went on to win the Nobel prize for economics just a few months later, wrote a book review for the New York Times. The book in question, "The Myth of the Post-Industrial Economy", by Stephen Cohen and John Zysman, lamented the shift of the American workforce into the service sector and explored the reasons why American manufacturing seemed to be losing out to competition from abroad.</p>
<p>One problem, the authors reckoned, was that America was failing to take full advantage of the magnificent new technologies of the computing age, such as increasingly sophisticated automation and much-improved robots. Mr Solow commented that the authors, "like everyone else, are somewhat embarrassed by the fact that what everyone feels to have been a technological revolution...has been accompanied everywhere...by a slowdown in productivity growth".</p>
<p>This failure of new technology to boost productivity (apart from a brief period between 1996 and 2004) became known as the Solow paradox. Economists disagree on its causes. Robert Gordon of Northwestern University suggests that recent innovation is simply less impressive than it seems, and certainly not powerful enough to offset the effects of demographic change, inequality and sovereign indebtedness. Progress in ICT, he argues, is less transformative than any of the three major technologies of the second Industrial Revolution (electrification, cars and wireless communications).</p>
<p>Yet the timing does not seem to support Mr Gordon's argument. The big leap in American economic growth took place between 1939 and 2000, when average output per person grew at 2.7% a year. Both before and after that period the rate was a lot lower: 1.5% from 1891 to 1939 and 0.9% from 2000 to 2013.</p>
<p>And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image"></div><p></p></div></div></p>
<h3>Have patience</h3>
<p>A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag. The past four decades have been a period of gestation for ICT during which processing power exploded and costs tumbled, setting the stage for a truly transformational phase that is only just beginning (signalling the start of the second half of the chessboard).</p>
<p>That sounds plausible, but for now the productivity statistics do not bear it out. John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.</p>
<p>That may be the wrong place to look for improvements in productivity. The service sector might be more promising. In higher education, for example, the development of online courses could yield a productivity bonanza, allowing one professor to do the work previously done by legions of lecturers. Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.</p>
<p>Similar opportunities to make service-sector workers more productive may be found in other fields. For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image"></div><p></p></div></div></p>
<p>Such advances should boost both productivity and pay for those who continue to work in the industries concerned, using the new technologies. At the same time those services should become cheaper for consumers. Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.</p>
<p>The world has more than enough labour. Between 1980 and 2010, according to the McKinsey Global Institute, global nonfarm employment rose by about 1.1 billion, of which about 900m was in developing countries. The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with.</p>
<p>That meant firms were able to keep workers' pay low. And low pay has had a surprising knock-on effect: when labour is cheap and plentiful, there seems little point in investing in labour-saving (and productivity-enhancing) technologies. By creating a labour glut, new technologies have trapped rich economies in a cycle of self-limiting productivity growth.</p>
<p>Fear of the job-destroying effects of technology is as old as industrialisation. It is often branded as the lump-of-labour fallacy: the belief that there is only so much work to go round (the lump), so that if machines (or foreigners) do more of it, less is left for others.</p>
<p>This is deemed a fallacy because as technology displaces workers from a particular occupation it enriches others, who spend their gains on goods and services that create new employment for the workers whose jobs have been automated away. A critical cog in the re-employment machine, though, is pay. To clear a glutted market, prices must fall, and that applies to labour as much as to wheat or cars.</p>
<p><div class="KonaFilter image-container display-table"><div><div class="image"></div><p></p></div></div></p>
<p>Where labour is cheap, firms use more of it. Carmakers in Europe and Japan, where it is expensive, use many more industrial robots than in emerging countries, though China is beginning to invest heavily in robots as its labour costs rise. In Britain a bout of high inflation caused real wages to tumble between 2007 and 2013. Some economists see this as an explanation for the unusual shape of the country's recovery, with employment holding up well but productivity and GDP performing abysmally.</p>
<p>Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%, and food costs dropped steeply.</p>
<p>But in those days excess labour was relatively easily reallocated to new sectors, thanks in large part to investment in education. That is becoming more difficult. In America the share of the population with a university degree has been more or less flat since the 1990s. In other rich economies the proportion of young people going into tertiary education has gone up, but few have managed to boost it much beyond the American level.</p>
<p>At the same time technological advances are encroaching on tasks that were previously considered too brainy to be automated, including some legal and accounting work. In those fields people at the top of their profession will in future attract many more clients and higher fees, but white-collar workers with lower qualifications will find themselves displaced and may in turn displace others with even lesser skills.</p>
<h3>Lift out of order</h3>
<p>A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers. Over the next few decades demand in the top layer of the labour market may well centre on individuals with high abstract reasoning, creative, and interpersonal skills that are beyond most workers, including graduates.</p>
<p>Most rich economies have made a poor job of finding lucrative jobs for workers displaced by technology, and the resulting glut of cheap, underemployed labour has given firms little incentive to make productivity-boosting investments. Until governments solve that problem, the productivity effects of this technological revolution will remain disappointing. The impact on workers, by contrast, is already blindingly clear.</p>
<p>Click <a href="https://subscriptions.economist.com/nwcd">here</a> to subscribe to The Economist</p>
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