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Re-thinking the capabilities of technology in economics

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  • Daniel Susskind

    (Fellow in Economics, Balliol College, Oxford University)

Abstract

Over the last 15 years, the ‘task-based' approach has become dominant in the economic literature that explores the effects of technological change on the labour market. This approach has tended to rely on a particular understanding of the capabilities of technology -- known as the ‘ALM hypothesis'. However, this has led this literature to severely underestimate these capabilities. Many tasks that were believed to be out of reach of automation can now be automated. In this note I set out two distinct explanations for why these capabilities were underestimated -- one that is explored in the recent literature and maintains the ALM hypothesis, and a new explanation that challenges it. I propose a new hypothesis about the capabilities of technology that contains the ALM hypothesis as a special case.

Suggested Citation

  • Daniel Susskind, 2019. "Re-thinking the capabilities of technology in economics," Economics Bulletin, AccessEcon, vol. 39(1), pages 280-288.
    • Handle: RePEc:ebl:ecbull:eb-18-00857
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    References listed on IDEAS

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    Cited by:

    1. Paula Prenzel & Simona Iammarino, 2021. "Labor Force Aging and the Composition of Regional Human Capital," Economic Geography, Taylor & Francis Journals, vol. 97(2), pages 140-163, March.
    2. Luca Antonazzo & Dean Stroud & Martin Weinel, 2024. "Smart manufacturing and tasks automation in the steel industry: Reflecting on routine work and skills in Industry 4.0," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 45(3), pages 914-936, August.
    3. Alonso, Cristian & Berg, Andrew & Kothari, Siddharth & Papageorgiou, Chris & Rehman, Sidra, 2022. "Will the AI revolution cause a great divergence?," Journal of Monetary Economics, Elsevier, vol. 127(C), pages 18-37.

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    More about this item

    Keywords

    Technological Change; Automation; Tasks.;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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