Address: Job ~nsecurity and Technology

I regret that I was unable to join you for the earlier portions of this conference. I know that you have had some important explorations of the process through which technology contributes to economic growth. What I would like to do in this session is perhaps augment these discussions by shifting gears a bit. I would like to focus on the question of how people perceive the benefits of recent technological change. Today a truly puzzling phenomenon confronts the American economy: I refer to the pervasiveness of job insecurity in the context of an economic recovery that has been running for more than five years, inflation that has been contained, and a layoff rate that is historically quite low. Yet, in the face of all this seemingly good news, a sense persists that something is fundamentally wrong. This afternoon I want to try to explain where I believe the insecurity is coming from and, I hope, raise some suggestions as to how it might be assuaged. The issue, as best I can judge, appears to be rooted in one of those rare, perhaps once-in-a-century events--a structural technological advance. The advent of the transistor and the integrated circuit and, as a consequence, the emergence of modern computer, telecommunication, and satellite technologies have fundamentally changed the structure of the American economy. Since the beginning of the Industrial Revolution, our economy and, to only a slightly lesser degree, the economies of our industrial trading partners have been progressing toward a regime in which abstract ideas and concepts are the dominant element in the creation of economic value. A hundred years ago, physical brawn was critical to value-added determination. People who personally could lift