Technology Disruption On The Road Ahead Fasten Your Seat Belts, Its Going To Be A Bumpy Ride! – Forbes

An Electric Vehicle charging station in Monterey Park, California on May 18, 2021. - President Joe ... [+] Biden's administration continues the push for alternative forms of transportation and energy and on a visit today to the Ford Motor plant in Dearborn, Michigan, Biden made the case for his $174 billion electric-vehicle proposal, urging automakers not to build zero-emission vehicles abroad for US consumers and touting electric vehicles as the future of the auto industry. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

The introduction, scaling, and integration of revolutionary technologies into an economy is a dynamic, inherently disruptive process that both creates and destroys businesses, markets, and jobs. This creative destruction is essential for generating the economic growth, productivity, and competitive impact that such technologies can deliver. One thing that can serve as either a brake or accelerator on this process is government policy andregulation.

As multiple technology revolutions unfold at a rapid pace, a countrys dynamism, including the speed and efficiency with which it can reorganize around new technology, will be a major determinant of its competitiveness.

Hitting the Accelerator for the Digital Revolution.

There is no better case of creative destruction in action than the scaling of the digital revolution. In 1993, as the internet emerged, the Clinton administration issued a policy framework, outlining a vision for an information infrastructure, and how this network, vast universe of information, and applications, software, and devices to access it could unleash a revolution and forever change how we live, work, and interact. The framework proposed regulatory and policy actions that would rapidly scale the internet in the United States, including opening competition, ensuring universal access, developing interoperability standards, and reforming regulations that impeded development of interactive services and applications.

The U.S. economy responded by reorganizing in a three-decade whirlwind of creative destruction. Private fixed investment in information processing equipment and software grew from $176 billion annually in 1990 to more than a trillion annually today. Thousands of new firms were born. In 1992, about 740 software publishing start-ups were formed; by 1997, the number grew to 1,240. After the internet bust came scaling of the app economy, and software start-ups rose again, from about 270 in 2010 to 1,480 in 2018. Today, the top 10 on the Fortune 500 includes companies that did not exist in 1992 when Clinton issued that policy, such as Amazon and Alphabet, as well as Apple. Furthermore, digitalization disrupted entire industries, such as broadcasting, publishing, and distribution. New ways of doing business have swept the globe. The U.S. digital economys GDP has grown to $2 trillion, ranking just below manufacturing.

Three Key Emerging Areas for Regulation and Government Policy

Borrowing from the lessons of the internets emergence in the 1990s, policymakers, as well as private sector leaders, must significantly increase their attention to todays emerging revolutionary technologies that are bound to have a massive impact.

Electric, Connected, and Autonomous Vehicles.The shift in how our cars operate, and what they run on, means a widespread shift in the entire infrastructure and industries around vehicle transportation, fromauto manufacturing and repair to goods delivery, and to mass transportation, traffic management, and urban planning.More EVs on the road means automotive technicians and mechanics must be able to work on high-voltage electrical systems, lithium-ion batteries, and electric generators. Meanwhile, charging stations will become prevalent where people spend considerable time such as hotels, restaurants, shopping malls, and office buildings. There are about 100,000 gas stations in the U.S., employing more than 950,000 people, so as we transition away from internal combustion engines, these sites and the role of employees will need to be repurposed or reimagined.

Biomanufacturing.A recent McKinsey Global Institute study suggests that as much as60% of the physical inputs to the global economy could be produced using biological materials or processes. If the manufacturing paradigm shifts to biotech, there would be dramatic disruption among incumbent producers, reconfigured supply chains, new business entrants and models, and a shift in the manufacturing skill base. Innovations in biology pose risks, such as uncontrolled spread of genetically engineered organisms, homebrew bio labs, or the potential for countries to operate on different regulatory or ethical standards to achieve a competitive advantage.Onthe latter, while the government can establish guardrails for such a powerful technology through regulation, it cannot engineer the revolution. The future state will emerge from the turbulence of market forces spun by the decisions and actions of thousands of investors and businesses in numerous industries, and millions of consumers.

Artificial Intelligence.AI promises to reweave the fabric of the economy, society, and our lives, "reshaping each domain from the macro to the micro with intelligentization as Chinas central planners note.Governments around the world are already preparing for its implementation in and impact on their economies, industries, workforce, and society.

Chinas plan includes deployment of AI in nearly all dimensions of society, ranging from transport and logistics, manufacturing and agriculture, finance and law, health care and public safety. Meanwhile, the EUs proposed AI regulation recognizes the societal scope of this potential disruption, deeming the use of AI as high risk in some applications in infrastructure, education and training, law enforcement, and administration of justice. Thorny regulatory issues are rising in areas such as legal liability for AI-related damages, algorithm bias, trust and transparency in expert systems, and data ownership.

AI could disrupt labor at every level of the economy, from the job levelsuch as the tasks performed, or the way work is organized, decisions made, and problems solvedto the labor market levelby creating new occupations or eliminating existing ones, and changing the market value of skillsand every level in between. Policy-makers must focus on smoothing the reallocation of human capital and addressing worker dislocation.

We need regulation and standards development at the speed of innovation, and policies that facilitate and smooth the process of creative destructionfor example, that encourage start-ups, ensure robust competition, and ease capital and laborreallocation.

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Technology Disruption On The Road Ahead Fasten Your Seat Belts, Its Going To Be A Bumpy Ride! - Forbes