Back in 1998, a company called Envox Group AB flew Yours truly to Stockholm, Sweden. As a quasi-pundit in the world of telecom reportage, Envox wanted me to participate in a brainstorming session to formulate a new name for an advanced software application generator.
An Envox employee was showing me around Stockholm one morning when he got a phone call from his wife, an employee of another firm. She said that their child was too ill to go to daycare that day. “Oh well, I’ll make arrangements,” he said.
“Do you need to go home?” I asked. “No not at all,” he said. “Here in Sweden, if we working parents have a child who suddenly takes ill, we can get a babysitter instantly, because to pay for it the government immediately gives you the money to pay him or her.
“We just call up their Interactive Voice Response — IVR — system and indicate whether we want the money sent as a check or instantly deposited electronically into our bank account.”
I was stunned, not just because the Swedish government would pay for such a thing, but that a whole system was set up to handle it. I replied, “I guess in a socialist country like Sweden, the bureaucracy needed to deal with all of these social services must be onerous.” “Not really, “ he said. “I’m sure in the case of this particular service, it was just a matter of plugging in some telephony cards on a computer server and running some additional software with hooks into the existing government middleware.”
I stood there immersed in an even more incredulous state of mind.
American conservatives have been trying to shrink the U.S. Federal Government for decades, generally by defunding social programs and reducing the extent of regulation on the economy. But what everyone misses is the fact that creeping bureaucracy — increases in government staff along with long-term consultants and workers — is a key part of the problem.
Government officials presiding over social programs — no matter how big or small — measure their importance in terms of the number of people in the human pyramid under them, not just total dollars spent. Each official strives to inflate his or her fiefdom as much as possible. Thus, taxes are higher than they should be because we have to pay for the human infrastructure of the bureaucracy as well as doling out the social program money to the public.
Liberals would like to believe that smaller government is impractical and implausible, but look at what American business has done. Faced with a high and uncompetitive U.S. corporate tax rate of 35 percent, many companies reincorporate or “invert” (as they say) in foreign places such as Ireland where there’s a tax rate of 12.5 percent and where they can enjoy making money on which U.S. income tax doesn’t get paid. Moreover, amazingly cheap labor can be found in other countries.
Now, however, something interesting is happening. Companies are starting to move their operations back to America. The great U.S. textile industry, for example, fell apart in the 1990s and moved operations to China, Mexico and India, but now it’s coming back home to America.
Why? Examining this phenomenon in the Sept. 9, 2013 New York Times, Stephanie Clifford writes, “Most striking, labor costs — the reason all these companies fled in the first place — aren’t that much higher than overseas because the factories that survived the outsourcing wave have largely turned to automation and are employing far fewer workers.”
Companies are returning to America, but they are reappearing as automated systems with fewer workers needed for their operation. As for more sophisticated thinking jobs, Bill Gates, speaking at The American Enterprise Institute in March, 2014, says that “software substitution”—Gates’ euphemism for “bots” or artificial intelligence software and robot hardware—will blow away many information related jobs such as telemarketers, retail workers, accountants, financial consultants, medical personnel, etc.
Gates said, “Software substitution, whether it’s for drivers or waiters or nurses . . . it’s progressing . . . Technology over time will reduce demand for jobs, particularly at the lower end of skill set . . . 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”
Now imagine if this great expertise in the private sector were to be applied to the government. Rather than the befuddled efforts of the Obamacare website builders, let us envisage innovative, cutting edge systems analysts, masters of logistics and software developers all applying their skills to shrink the American bureaucracy.
How many government jobs could be automated away? One out of five? One out of four? The possibilities are tantalizing — or should be to any thinking lawmaker.
Richard Grigonis is an internationally known technology editor and writer. He was executive editor of Technology Management Corporation’s IP Communications Group of magazines from 2006 to 2009. The author of five books on computers and telecom, including the highly influential Computer Telephony Encyclopedia (2000), he was the chief technical editor of Harry Newton's Computer Telephony magazine (later retitled Communications Convergence after its acquisition by Miller Freeman/CMP Media) from its first year of operation in 1994 until 2003. Read more reports from Richard Grigonis — Click Here Now
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