Saturday, June 25, 2011

Can Digital Technologies Replace Superstars?

Japan's newest pop star, Aimi Eguchi, is a digital creation.

For the past couple of decades, digital technologies have been responsible for skill biased technical change, automating and replacing routine, low-skill work while augmenting the demand for more skilled workers. Bank tellers, clerks and assembly line workers were early targets of automation, while rock stars and CEOs benefited from being able to scale their efforts.

The incomes of superstars have skyrocketed while median wages have stagnated.

However, there's nothing inevitable about technologies only being used to replace low-wage work. Pop stars, actors, artists, writers, mathematicians, chess grandmasters have all been targets of automation. In many ways, expert knowledge is easier to codify than common sense. In principle, every profession is potentially vulnerable as digital technologies, robotics and artificial intelligence advance.

There will be increasing disruption in the economy as businesses restructure, and employment, wages, and incomes re-align to the new reality.

Which sectors do you think will be most affected in the next 10 years. Which professions, other than b-school professors, are relatively immune for the time being?