Peter Lindert, an economist at the University of California-Davis, says computers are more disruptive than earlier innovations because they are "general-purpose technologies" used by all kinds of companies. They upend many industries instead of just a few. The mechanized looms the Luddites hated in England in the early 1800s, for instance, rattled one industry. Information technology touches every business.
The changes are coming much faster this time, too. Lindert says that's showing up in the steep drop in prices for some products this time.
In the Industrial Revolution, "the price of textiles went down. But it was a small number compared to how the cost of information storage has gone down. It's a fraction of what it was in the 1970s," Lindert says. Now, computing power is doubling every 18 months to two years â¿¿ and the price is plummeting.
But Lindert does not believe workers are doomed to unemployment. With the right skills and education, he says, they can learn to work with the machines and become productive enough to fend off the automation threat."There is a period of time that is extremely disruptive," says Thomas Schneider, CEO of the consultancy Restructuring Associates. "If you're 55 years old now and lose your job, the odds of you ever getting hired into what you were doing before is as close to zero as you can imagine. If you are a 12-year-old, you have a very bright future. It's just not doing what your father was doing or your mother was doing." The rise of the iPhone, for instance, has put more than 290,000 people to work on related iPhone apps since 2007, according to Apple. That suggests that new technology continues to create new types of jobs that require higher skills and creativity. "Over the long run, I have confidence we can do it," Stiglitz says. But, he warns, "I can see us being in this kind of doldrums for half a decade, for a decade, or for longer."