The Finnish government, lead by prime minister Sipilä, is struggling with an unemployment problem and has set a new target of creating 110,000 new jobs. This goal is great, but short-sighted. We are on the verge of a large-scale structural change that is not easy to see, but which will have a much bigger impact on our society than the current economic crisis.

Technological evolution is about to reach a point where machines can do most of the work currently done by people with more efficiency, at lower costs, and with less errors. One example of this is the automated self-service checkouts in supermarkets that are already widely in use. One employee is able to simultaneously handle six cash registers instead of just one. Another example are the self-driving cars we see on the news all the time.

The structural change isn’t limited to these examples. Two quickly maturing branches of technology are general-purpose robots and artificial intelligence. General-purpose robots such as Baxter can already complete packaging and assembly tasks on a factory line. One base level Baxter robot costs around 25,000 USD with the basic setup. Even with all the available extra features, the price stays under 40,000 dollars. As a comparison, a worker with a $2,000/month salary costs the employer around $30,000 a year. So, for less than an employee’s one year salary costs, you get a 24/7, 365 days-a-year worker who doesn’t have sick days and who comes with a two-year warranty. And remember, this isn’t a prototype. It is a ready product which you can order to your factory’s assembly line today, if you feel like it. Here you can see Baxter in action.

Let’s take a look at some recent real-life examples to realize how fast these things can move forward. Take Uber, for example. Uber was founded in 2009 and by the third quarter of 2015 they had a 34% market share of the whole US taxi and car rental market, with already more than half of the taxi market. Their biggest market share is in San Francisco, where they control 88% of the business in the industry. And all this happened in just six year’s time. Rumors tell that Uber has been planning on taking self-driving cars into use. The company at least has the financial power to start using autonomous cars tomorrow if they decided to do so. It will be very interesting to see what happens. A comprehensive story on the subject is available here.

A lot of studies about technological unemployment have been published during the past years. The results look quite radical. According to a 2013 study, 47% of the labor force in the United States has a high risk for unemployment due to technological change. As a comparison, the biggest unemployment rate ever recorded in Finland was 20% during the recession in 1994. Even if the prediction was notably overestimated, unemployment will nevertheless rise to top the worst years of recession. This change will have a different structure compared to the change in the 90’s recession, because the economic growth now creates far less jobs compared to those that disappear.

This progress will inevitably lead to the rise of inequality, lead to less new companies being founded, and have a lot of other harmful effects on society. This transition now offers Finland a chance to build a vision for the state of the future. One that accepts the facts about the transition to a new era. A vision that will build a society where things are good for citizens after the technological transition as well. Adapting to this change will require a completely new way of thinking about society.

I see a lot of similarities to the time after Finland had fought in WWII. By doing systematic, visionary politics persistently during challenging times, Finland rose from a developing country to a leading welfare state in record time. Such visionary leadership in Finnish politics has been lacking in the past few years. The political actions taken in recent times seem to be more reacting to changes in surroundings rather than being proactive and planning for the future. Right now would be a million-dollar opportunity to follow where technological development is taking us and to start working to create the first functioning “state of the future”.

Of course, there isn’t a ready solution to be implemented. This would require a lot of pioneering work and the capabilities for acting quickly. The most important thing, is to realize and admit to the direction the world is heading, before it is too late. We must start actively looking for solutions.

Eero Laaksonen
Senior Advisor

TLDR: Robots + AI -> 47% unemployment -> New kind of politics needed -> Profit

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