Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy
May 22–23, 2019 Dallas Fed
Organized by the Federal Reserve Banks of Atlanta, Dallas and Richmond
The Federal Reserve Banks of Dallas, Richmond and Atlanta hosted the Technology-Enabled Disruption conference on May 22–23 in Dallas. The conference focused on technology implications for business, labor markets, education and monetary policy. Participants included, economists, business leaders, central bankers, educators and others.
|Wednesday, May 22|
|8:00 a.m.||Registration and Continental Breakfast|
Mark A. Wynne, Federal Reserve Bank of Dallas
|9:10 a.m.||Opening Remarks
Raphael Bostic, Federal Reserve Bank of Atlanta
Robert S. Kaplan, Federal Reserve Bank of Dallas
|9:15 a.m.||Session I: The Disruption Challenge Facing Business
Moderator: Robert S. Kaplan
Greg Armstrong, Plains All American Pipeline LP
Craig Boyan, H.E. Butt Grocery Co.
Brant A. Ring, BNSF Railway Co.
|10:45 a.m.||Session II: Defining Disruption: The View from Academia
Chair: David E. Altig, Federal Reserve Bank of Atlanta
Richard G. Baraniuk, Rice University
Joel Mokyr, Northwestern University
Willy Shih, Harvard University
|Noon||Lunch & Keynote
Introduction: Roberto Coronado, Federal Reserve Bank of Dallas
Moderator: Robert S. Kaplan
A Conversation with Agustín Carstens, Bank for International Settlements
|1:30 p.m.||Session III: How Emerging Technologies Create Disruption
Chair: Sylvain Leduc, Federal Reserve Bank of San Francisco
Erica Deadman, JPMorgan Chase Institute
Zorina Khan, Bowdoin College
Susan Lund, McKinsey & Co.
|3:00 p.m.||Session IV: Roundtable on the Implications of Technology-Enabled Disruption for Workforce Development
Moderator: Raphael Bostic
Carine M. Feyten, Texas Woman’s University
William Serrata, El Paso Community College
|4:30 p.m.||Session V: Implications of Disruption for Labor Markets
Chair: Marc P. Giannoni, Federal Reserve Bank of Dallas
Katharine G. Abraham, University of Maryland
Ekkehard Ernst, International Labor Organization
Henry Siu, University of British Columbia
|6:30 p.m.||Dinner & Keynote
Introduction: Mine K. Yücel, Federal Reserve Bank of Dallas
Moderator: Mark A. Wynne
A Conversation with Craig Hall, HALL Group
|8:00 p.m.||Adjourn for the day|
|Thursday, May 23|
|8:00 a.m.||Registration and Breakfast|
|8:45 a.m.||The Use of Data in Industry: A View from the Front Lines
Introduction: Pia Orrenius, Federal Reserve Bank of Dallas
Keynote: Patrick Bajari, Amazon
|9:15 a.m.||Session VI: Disruption and the Broader Economy
Chair: Kartik Athreya, Federal Reserve Bank of Richmond
Nir Jaimovich, University of Zurich
Chad Syverson, University of Chicago
Will Wang, Microsoft Research
|10:45 a.m.||Session VII: The Workforce Ecosystem: Local and Regional Solutions
Chair: Alfreda B. Norman, Federal Reserve Bank of Dallas
Stuart Andreason, Federal Reserve Bank of Atlanta
Sandy Dochen, IBM
Mark Flanagan, Dallas County Promise–The Commit Partnership
Rob Grunewald, Federal Reserve Bank of Minneapolis
Session VIII: Policymaker Roundtable
Moderator: Rana Foroohar, Financial Times
Thomas I. Barkin, Federal Reserve Bank of Richmond
Mary C. Daly, Federal Reserve Bank of San Francisco
Robert S. Kaplan
|1:30 p.m.||Conference adjourns|
This conference is designed to provide a better understanding of the phenomenon of technology-enabled disruption and explore its implications for the broader economy—in particular, labor markets and the workforce.
Technology-enabled disruption means that workers are increasingly being replaced by technology. It also means that existing business models are being supplanted by new models, often technology-enabled, that bring more efficiency to the sale or distribution of goods and services. As part of this phenomenon, consumers are increasingly able to use technology to shop for goods and services at lower prices with greater convenience—which has the impact of reducing the pricing power of businesses. This reduced pricing power, in turn, causes businesses to further intensify their focus on creating greater operational efficiencies. These trends appear to be accelerating.
It is likely that disruption is becoming a greater factor in the economic outcomes of workers. Increasingly, workers with lower levels of educational attainment are seeing their jobs restructured or eliminated. Unless they have sufficient math and literacy skills, or are retrained, these workers may see their productivity and incomes decline as a result of disruption. Thus, disruption may help explain the muted wage gains and overall labor productivity growth we have seen in the U.S. as well as in other advanced economies during much of the recovery from the global financial crisis.
Technology-enabled disruption’s impact on the workforce is likely not susceptible to monetary policy—it requires structural reforms. The reforms could include improving early-childhood literacy and overall college readiness in order to increase the percentage of students who graduate from college in six years or less (a share now estimated at 59 percent in the U.S.). The reforms could also include stepped-up efforts to increase middle-skills training in cities across the U.S. in order to increase employment, close the skills gap (not enough workers to fill skilled jobs) and raise worker productivity.
It is also likely that disruption is a factor behind some business decisions made by companies that are facing one or more disruptive competitors. These companies may be more cautious about making capacity-expansion decisions and investing in major capital projects.
To deal with disruptive changes and lack of pricing power, many companies are seeking greater economies of scale in order to maintain or improve profit margins. This may help explain the record merger-and-acquisition activity globally over the past few years.
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