Deloitte innovation chief: ‘Schools train us to become machines’

John Hagel III is an enthusiastic supporter of the opportunities that innovation and technology can bring. However, the digital transformation of the economy and society is going to be “challenging and stressful for most people”, Hagel told

John Hagel III is co-chairman for Deloitte LLP’s Center for the Edge. He is former vice-president of Atari and a founder of startups in Silicon Valley. Hagel has over 30 years of experience as a management consultant, author and speaker.

He spoke with’s Jorge Valero during the World Economic Forum in Davos.

How does current political instability affect innovation?

We have spent a lot of time analyzing what we call the ‘big shift’, the fourth industrial revolution. We believe that this ‘big shift’ creates big opportunities, but at the same time creates mounting performance pressure on us, as individuals and institutions. One of the natural reactions to mounting pressure is fear. We get very anxious about our situation, about our ability to continue thriving and succeeding.

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In that kind of context, with fear, there is a natural tendency to shorten your time horizon, because you can focus only on what is happening today, making sure that I get through today or tomorrow, versus thinking about the future. This kind of environment is very hostile toward innovation. Most innovation requires some sustain effort to develop. As an optimist, on the other side, this also creates opportunities, because if people are not focusing on innovation, those who do that can target a white space and create significant value.

Is the ‘big shift’ only a digital transformation?

It is a combination. Certainly, digital technology is a key enabler of the ‘big shift’. The other factor that it has been playing out for decades is the shift in public policy toward the freedom of movement, money, goods, people and ideas across geographic and industry boundaries. The combination of digital technology infrastructure plus freedom of movement incentivises competition no matter how will establish you are.

What is your advice to companies?

I am an optimist from Silicon Valley and I believe that, in the end, everything will work out in a positive way. Right now, I am doing some research on the impact of technology on the future of work. My shorthand message around this is that robots are going to help us in rediscovering our humanity. If you think about the way we define work in the industrial era, it was about doing highly specified tasks, in a very standardised way, and in a tightly integrated way.

That is what work is for large companies and businesses. In some cases, an algorithm can do this more effectively than a human being. Highly specified tasks, in a very standardised and tightly integrated way: that is a machine. We were doing the work of machines. Now, as machines take that work, there is an opportunity for us to step back and ask: “what could ‘work’ be?

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We could really tap into what is uniquely human. Things like curiosity, creativity, imagination, emotional intelligence, social intelligence. Things that make us humans. We could redefine our work to emphasise those characteristics, those attitudes, and use the machines to help augment our capabilities, and increase value through creativity.

Many reports highlight the risks and challenges brought by digital transformation.

I actually think that those reports are too limited. The most quoted one from Oxford University says that 47% of jobs will be taken in the US. I think it will be 100% of jobs that will be taken. Given how we define work, it is a matter of time before machines take all of that.

How long will it be before all the jobs are taken?

Probably 30 or 40 years. We have time. That is the good news. The bad news is that, since we have time, we tend to be complacent.

How should the state prepare for the transition? Would it be enough with changes to the education system, or are more radical solutions, like the universal basic income, are needed?

My particular emphasis is education, both in terms of how we give more people access to education, but also in terms of the educational systems we have today. Today’s system trains us to become machines. The purpose of the classroom is to teach you to follow instructions, and do the tasks exactly as they are assigned.

That is what a machine does. If that is what the system does, I don’t want any more students getting into that educational system. We need to rethink from the most basic level what education is. Again, it is pulling out and nurturing those uniquely human things like imagination, creativity, audacity… and really developing that in all of us.

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A universal income is a stopgap measure, it is not the answer. At best, it is going to help facilitate the transition, and God knows the transition is going to be challenging and stressful for most people. But the real focus needs to be on things like how we redesign our educational system to prepare people for this new world, and how we create an environment for people so they can set up businesses on their own.

Not everybody wants to be entrepreneur.

I am skeptical on that one. My answer is go back to a playground. When six-year-old kids play, how many of them want to be just followers, and play safe and secure? They are all taking risks, they are all experimenting. But afterwards something happened to them. What happened? They went to school! So they were taught that, if they follow instructions, they are rewarded, and that is a good life.

In this challenging transition, populism and inequality may continue increasing. Will it be a more unstable political period?

It is going to be very challenging: how we react to pressure, the notion of fear becoming predominant, the desire to protect ourselves. The system in the US, the country I know best, is becoming hugely dysfunctional. The political spectrum has fallen into what I would describe as threat-based narratives. The message to the people is we are under attack. It is all playing to that fear. What we are missing is an opportunity-based narrative that highlights what we could do if we became together, rather than polarising and splitting.

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