Wall Street Journal: Fear of Automation’s Dark Side Leads to Calls for Action

Some investors back policy or private-industry moves to head off a dystopian future

By TOMIO GERON

Matt Ocko is a venture capitalist placing big bets on the latest in artificial intelligence and big data.

But he also expects that leaps forward in related automation technology will put many people out of work, and he’s one of several Silicon Valley investors who think it’s unfair to expect society to adapt without offering help to people who are at risk from rapid change.

“You can’t simply command a welder who just lost his job and has a family of four to become an AI TensorFlow expert,” said Mr. Ocko, managing partner at Data Collective. “If you lose your job, you don’t have the capital to invest in retraining. You can’t send yourself to MIT while your kids are starving.”

Mr. Ocko of Data Collective says that people thrown out of work by automation could receive a tax credit to allow them to own robots or other types of devices that displaced them.

Several venture investors support public-policy initiatives or moves by private industry to head off the threat of a dystopian future in which human labor is devalued or made superfluous.

Some say the technology industry itself must take on the issue.

Among the ideas circulating are giving displaced workers tax credits to own robots or other technology that replaces them. Others have proposed new kinds of insurance or expanding the social safety net, along with expanding job-skills training for a world staffed by robots.

Doing nothing could be an ugly scenario, according to some forecasts. A PricewaterhouseCoopers report predicted that automation will place 38% of the U.S. labor force at high risk in the next 15 years. U.S. venture capitalists more than doubled investment dollars poured into artificial intelligence to $1.72 billion last year, according to Dow Jones VentureSource.

But many automation-focused founders and investors haven’t acknowledged the societal risks, let alone the need for a policy response to address the issue.

Not surprisingly, some of the most active venture backers of automation and AI tend to be more optimistic about the technology’s effects on society.

Vishal Harpalani, founder of a new firm called Automation VC, says his companies make lives better by making services drastically cheaper. He has backed startups automating dermatology, security, property management and medical diagnostics.

The firm’s tagline? “Investing in companies that automate human labor.”

One of the startups, YoDerm Inc., makes online dermatology more affordable.

“You’re talking an almost 10x decrease in price for services like that,” Mr. Harpalani said. “That’s happening in every single service: legal, financial, security. Prices are going to drop so substantially that people who couldn’t see a dermatologist will have one that’s software-enabled.”

Mr. Harpalani gives voice to an outlook that many VCs share but don’t often openly trumpet in Silicon Valley: automation, whatever its costs, makes good business sense.

“Efficiencies in the system get passed on to consumers,” said Daniel Gross, who heads Y Combinator’s AI team. “At the end of the day I’d rather have a future with free housing or free basics for everyone in the world instead of hanging onto a few (traditional) jobs.”

Emergence Capital’s Gordon Ritter says automation and AI help workers to do their jobs better. He cites his portfolio company Chorus, which improves the efficiency of salespeople.

But many future-minded investors have called for expanding the social safety net. A popular idea is universal basic income, which would give all citizens a cash stipend. Among other things, UBI is sometimes cast as a last resort or safety net if automation eliminates a vast number of human jobs.

Research into UBI has gained support from venture capitalists such as Roy Bahat of Bloomberg Beta, Hemant Taneja of General Catalyst and Albert Wenger of Union Square Ventures. Y Combinator has also funded a research project on the idea.

Mr. Ocko believes UBI may not give people enough meaning in their lives and could lead to “something that looks like Clockwork Orange.”

Others in tech such as Bill Gates have weighed in, saying that companies using automation or robots should be taxed.

But just retraining people with digital skills and using UBI as a backup isn’t enough, says Tim Hwang, an automation expert and a partner at legal technology firm Robot Robot & Hwang LLP. Mr. Hwang suggests automation insurance that would pay those who are automated out of a job. Private industry could contribute, avoiding the need for a large government program like basic income, he says.

His other ideas: community college curricula should adjust every 6 to 12 months based on economic changes; government programs focus on new growth jobs categories; and tax credits to foster growth in industries that are harder to automate.

There have been few proposals by politicians to address automation. Rep. Doris Matsui has proposed funding to retrain displaced automated workers into science and technology jobs and to forgive up to $100,000 in student loans for recent grads to train those displaced workers.

Meanwhile, looking into the distant future isn’t the only way to address this issue.

“My big message is: if you care, look at the present,” said Mr. Bahat, whose firm, like many others, has invested in artificial intelligence startups. “There are plenty of forms of work society needs: elder care, teachers. You don’t need to look to the future. Just solve that now.”