Digital transformation in industrial organizations often takes place in the form of automation: using robots instead of human capital. This has many upsides: it increases productivity and employees get on average a higher income and higher living standards. However, automation is not benefitting everyone, studies show that inequality rises. Low-skilled labor gets replaced and they do not always get new and better jobs. There is a shift from labor income to capital income. And finally, automation in the form of robots is often polluting and thus bad for the environment.
How to cope with these challenges? We need a new economic model that can deal with this ‘ automation capital’. An idea that is often proposed is: Robot Tax. This tax however comes with several complications: 1) what is a robot (and what not?). 2) We need innovation so we shouldn’t discourage automation by taxing.
What could be done? It would help to link environmental sustainability with social sustainability. Robot tax could tax only what we do not want: pollution, emissions and energy use. Then we won’t tax what we do want: innovation. We use the proceeds from taxing to fund programs for low-skilled workers: social security and education.
This is a preliminary research proposal developed at the Think Tank in Mannheim. Do you have any feedback or questions for the group? Please post it below. Do you want to join the group, please press the button on the right.