Carl Benedikt Frey

Carl Benedikt Frey

Carl Benedikt Frey is a Swedish-German economist and economic historian. He is Oxford Martin Citi Fellow at Oxford University where he directs the programme on Technology and Employment at the Oxford Martin School.[1] His work focuses on technological change, economic development, and structural transformation. He has written extensively on digitization, artificial intelligence and the future of work.[2][3][4]

Research

In a widely cited 2013 study, entitled The Future of Employment: How Susceptible Are Jobs to Computerisation?, Frey and Michael Osborne estimated that 47% of jobs in the United States are at risk of automation.[1] Rory Cellan-Jones has called their paper one of the most influential studies of our time.[2] Their study has featured among Foreign Affairs Best of 2015 and the Top Stories of 2014 in The Economist.[3][4]

Reception

Although the study is not a prediction of the future, it is often taken as one. Building on the intuitions of Frey and Osborne, Jefferey Sachs and economists at the International Monetary Fund (IMF) have developed models showing how the robot revolution could make future generations worse off as the gains from automation are captured by owners of capital.[5][6][7] The late Anthony Atkinson has pointed at similar implications, taking their study to imply that substitution elasticity between capital and labor will fall in the future.[8]

David Autor, on the other hand, thinks that automation anxiety is overblown.[9] Daron Acemoglu has also pointed out that the estimates of Frey and Osborne as such say nothing about the equilibrium employment effects of automation. However, his own work shows that robots have served to reduce employment.[10]

The Frey and Osborne study has also been frequently cited in popular writings. The Rise of the Robots, which won the Financial Times and McKinsey Business Book of the Year Award in 2015, relies on their study to suggest that a jobless future is inevitable. The New York Times bestseller Homo Deus: A Brief History of Tomorrow, by Yuval Noah Harari, also cites Frey and Osborne to suggest that the traditional educational model, in which life is divided into a period of learning followed by a period of work, has become obsolete.[11]

Adoption

In the 2016 Economic Report to the President, the methodology of Frey and Osborne was employed by Obama's Council of Economic Advisors.[12] The World Bank has also applied their methodology to developing countries, estimating that 77 percent of jobs in China, 69 percent of jobs in India, and 85 percent of jobs in Ethiopia, are at risk of automation.[13] The Frey and Osborne model is also used by McKinsey & Company in studies of the employment impacts of automation.[14]

Controversy

In 2018, the Organisation for Economic Co-operation and Development (OECD) challenged the Frey and Osborne study, suggesting that only 14% jobs are exposed to automation.[15] Frey and Osborne responded in an article, welcoming the effort, but found the study to lack transparency, employ statistically questionable methods, and pointed out that patterns in the data cast doubt on their approach.[16]

Own beliefs

While their estimates have often been taken to imply an employment apocalypse, this is not what Frey and Osborne suggested. In an interview with Martin Wolf, Frey made clear that this estimates shall not be taken to mean the end of work. In 2018, Frey and Osborne also stated:

Our study wasn’t even a prediction. It was an estimate of how exposed existing jobs are to recent developments in artificial intelligence and mobile robotics. It said nothing about the pace at which jobs will be automated away. What it did suggest is that 47% of jobs are automatable from a technological capabilities point of view. As we pointed out back then:

"[...] we focus on estimating the share of employment that can potentially be substituted by computer capital, from a technological capabilities point of view, over some unspecified number of years. We make no attempt to estimate how many jobs will actually be automated. The actual extent and pace of computerisation will depend on several additional factors which were left unaccounted for."[5]

Other work

The Uber effect

In Drivers of Disruption? Estimating the Uber Effect, Frey found that while the introduction of Uber had not led to jobs being lost, but had caused a reduction in the incomes of incumbent taxi drivers of almost 10 percent.[6] On Al Jazeera he called the TFL decision to restrict Uber in London a massive transfer of consumer surplus from millions of users to a few taxi drivers.[7]

Populism

Frey has argued that populist rebellion in America and Europe has been driven by groups in the labour market that have lost out to automation and trade. In a 2017 study, Frey found that electoral districts with a higher exposure to robots were more likely to opt for Donald Trump in the 2016 Presidential Election. At the 2017 Ambrosetti Forum, he compared the rise of robots to that of Britain's Industrial Revolution in the 18th and 19th centuries, when workers known as "Luddites" rioted against the use of machinery.[8]

Career

Frey has served as an advisor and consultant to international organisations, think tanks, government and business, including the G20, the OECD, the European Commission, the United Nations, and several Fortune 500 companies. In partnership with Citigroup, he also advises global leaders on digitization.[9]

Frey is also Economics Associate of Nuffield College, and Senior Fellow of the Programme on Employment, Equity and Growth at the Institute for New Economic Thinking, both University of Oxford.[10][11] He remains a Senior Fellow of the Department of Economic History at Lund University, and a board member of Futurion AB.

His work has been widely covered by the BBC, CNN, The Economist, Financial Times, Wall Street Journal, Foreign Affairs, New York Times, Washington Post, Frankfurter Allgemeine, Scientific American, TIME Magazine, Forbes, and many others.[12][13][14][15][16]

In 2016 he was named the 2nd most influential young opinion leader by the Swedish business magazine Veckans Affärer.[17]

References

  1. ↑ "Dr Carl Benedikt Frey | People". Oxford Martin School. Retrieved 2016-06-16.
  2. ↑ "Dr Carl Benedikt Frey". carlbenediktfrey.com. Retrieved 2016-06-16.
  3. ↑ Berger, Thor; Frey, Carl Benedikt (2016-03-01). "Did the Computer Revolution shift the fortunes of U.S. cities? Technology shocks and the geography of new jobs". Regional Science and Urban Economics. 57: 38–45. doi:10.1016/j.regsciurbeco.2015.11.003.
  4. ↑ Berger, Thor; Frey, Carl Benedikt (2015-11-23). "Industrial Renewal in the 21st Century: Evidence from US Cities". Regional Studies. 0 (0): 1–10. doi:10.1080/00343404.2015.1100288. ISSN 0034-3404.
  5. ↑ "Automation and the future of work – understanding the numbers". Oxford Martin School. Retrieved 2018-04-18.
  6. ↑ Gaskell, Adi. "Study Explores The Impact Of Uber On The Taxi Industry". Forbes. Retrieved 2017-11-08.
  7. ↑ Al Jazeera English (2017-10-01), The London Uber eviction 🇬🇧 | Counting the Cost, retrieved 2018-04-18
  8. ↑ Browne, Ryan (2017-10-30). "Hillary Clinton would be president if there were fewer robots in the workplace, study says". CNBC. Retrieved 2017-11-08.
  9. ↑ "TECHNOLOGY AT WORK". www.citivelocity.com. Retrieved 2016-06-16.
  10. ↑ School, Institute for New Economic Thinking at the Oxford Martin. "Dr Carl Benedikt Frey | People | Institute for New Economic Thinking at the Oxford Martin School". www.inet.ox.ac.uk. Retrieved 2016-06-16.
  11. ↑ "Carl Benedikt Frey - Biography". www.nuffield.ox.ac.uk. Retrieved 2016-06-16.
  12. ↑ "The onrushing wave". The Economist. ISSN 0013-0613. Retrieved 2016-06-16.
  13. ↑ Frey, Carl Benedikt (2015-09-30). "Cheap automation raises risk of 'premature deindustrialisation'". Financial Times. ISSN 0307-1766. Retrieved 2016-06-16.
  14. ↑ Frey, Carl Benedikt (2014-10-02). "Doing capitalism in the digital age". Financial Times. ISSN 0307-1766. Retrieved 2016-06-16.
  15. ↑ Frey, Carl Benedikt. "The End of Economic Growth?". Scientific American. 312 (1): 12–12. doi:10.1038/scientificamerican0115-12.
  16. ↑ Frey, Carl Benedikt. "How 21st-Century Cities Can Avoid the Fate of 20th-Century Detroit". Scientific American. Retrieved 2016-06-16.
  17. ↑ "Hela listan: Sveriges 101 Supertalanger". Veckans affärer. Retrieved 2016-06-16.
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