Text 2 Innovation, the driver of progress, has always cost people their jobs. Over the past 30 years the digital revolution has displaced many of the mid-skilled jobs that supported 20th century middle-class life. Although innovation kills some jobs, it creates new and better ones. Optimism remains the right starting-point, but for workers the dislocating effects of technology may make them evident faster than its benefits. Even if new jobs and wonderful products emerge, in the short term income gaps will widen, causing huge social dislocation and perhaps even political changing. Why be worried? It is partly a matter of history repeating itself. In the early part of the Industrial Revolution the rewards of increasing productivity went disproportionately to capital; later on, labor reaped the most of the benefits. The pattern today is similar. The prosperity brought by digital revolution has gone overwhelmingly to the owners of capital and the highest-skilled workers. Until now the jobs most vulnerable to machines were those that involved routine, repetitive tasks. But thanks to the exponential rise in processing power and the universality of digitized information, computers are increasingly able to perform complicated tasks more cheaply and effectively than people. One recent study by academics at Oxford University suggests that 47% of today’s jobs could be automated in the next two decades. If this analysis is halfway correct, the social effects will be huge. Many of the jobs most at risk are lower down the ladder, whereas the skills that are least vulnerable to automation tend to be higher up, so median wages are likely to remain stagnant for some time and income gaps are likely to widen. Anger about rising inequality is bound to grow, but politicians will find it hard to address the problem. Shunning progress would be as the Luddites’s protests against mechanized looms in the 1810s, because any country that tried to stop would be left behind by competitors eager to embrace new technology. The freedom to raise on taxes on the rich to punitive levels will be similarly constrained by the mobility of capital and highly skilled labor. The main way in which government can help their people through this dislocation is through education systems. Now schools need to be changed, to foster the creativity. There should be less rote-learning and more critical thinking. Technology itself will help, whether through MOOCs (massive open online courses) or even video games that simulate the skills needed for work. In the 19th century it took the threat of revolution to bring about progressive reforms. Today’s government would do well to start making the changes needed before their people get angry.