Innovation's Dark Side: How Tech Bites Back

From unintended consequences like cybersecurity breaches to chronic unemployment which some might argue has always been a goal of automation, there is no such thing as an unalloyed good for technology innovation.

The challenge is determining the degree to which the benefits outweigh the costs - and whether the relative net of each is being appropriately assigned.  JL

Greg Ip reports in the Wall Street Journal:

Bite-back hurts growth in two ways: it makes the original innovation less useful. Second, fixing bite-back consumes scarce resources. The opioid epidemic costs nearly $80 billion a year in lost productivity and treatment. Companies world-wide spent $78 billion on cybersecurity last year. That is rising 8% per year while overall technology spending rises just 1%. Like physical locks and security guards, cybersecurity adds to GDP but it doesn’t raise our standard of living.
For those who believe in the inevitability of human progress, the latest road accident data are sobering. In the first half of this year, nearly 18,000 people died on American roads, up 10% from last year. Fatalities per 100 million miles driven hit a seven-year high.
It’s too early to know precisely which factors caused the spike, but traffic experts are pretty sure of at least one: cellphones and other hand-held devices that take drivers’ attention off the road.
Distracted driving is a useful reminder of a phenomenon too often overlooked in the debate now raging over innovation and productivity. Optimists claim many of the benefits of innovation aren’t measured by the (now dismal) statistics on gross domestic product and productivity. They forget that the same is true of many of its costs.

 Innovation has been a relentless source of human betterment, yet it commonly brings grim and often unanticipated side effects.
“It is inconceivable to think of any innovation that doesn’t bite back,” says Joel Mokyr, a technology historian and economist at Northwestern University.
The cultivation of sugar beets in the 19th century led to vastly more consumption of sugar and a “precipitous increase in tooth decay,” he said. When lead was first added to gasoline to improve engine performance in 1921, nobody knew it would eventually be linked to learning disabilities and crime.
Bite-back, as Mr. Mokyr calls it, may help explain why today’s advances in technology, transport, energy and medicine don’t seem to translate into rising standards of living. For example, each year new treatments and devices improve health and delay death. Yet traffickers have reversed that progress by illegally manufacturing and importing fentanyl, an opioid painkiller up to 50 times as powerful as heroin, for a fraction of heroin’s price. The Wall Street Journal estimates nearly 4,000 people died of fentanyl overdoses in 10 hard-hit states last year, more than double the level in 2014. The epidemic may be shortening lifespans.
The explosion in social media and connectivity made possible by the internet and smartphones has, with a lag, also brought viruses, hacking, and identity theft, not to mention cyber bullying by mean teenagers and terrorist recruitment by Islamic State.
Every office loses productivity to web surfing. (The writing of this column was repeatedly interrupted by Twitter.) Videogames today are magnitudes more sophisticated and immersive than those of 20 years ago, but that has a dark side: They may make jobs less appealing.
Erik Hurst, an economist at the University of Chicago, has documented that young men without college degrees spent 3.8 hours per week on videogames in recent years, up 1.5 hours from 2004 to 2007. For men who aren’t working, the increase was 2.7 hours, to a total of 6.3. Mr. Hurst says that this may be one factor explaining why men in that age group work an average of 2.5 hours less per week than a decade ago.
This doesn’t necessarily prove that better videogames are why these men work less, and some economists are unconvinced, noting people still spend much more time watching television.
Still, Mr. Hurst notes these men reported higher levels of happiness than the same group reported a decade earlier, which suggests some of them aren’t working because other uses of their time are more enjoyable. But he says sacrificing early experience in the job market can erode one’s career prospects. In that sense videogames, like sugar, may raise happiness in the short run while undermining it in the long run.Bite-back hurts growth in two ways. First, it makes the original innovation less useful. Microbial resistance has rendered many antibiotics ineffectual. Hillary Clinton may have concluded that the convenience of email is no longer worth the reputational risk, and Donald Trump may eventually feel the same way about Twitter.
Second, fixing bite-back consumes scarce resources. The opioid epidemic costs nearly $80 billion a year in lost productivity and treatment, according to one study.  Companies world-wide spent $78 billion on cybersecurity last year, says Gartner, a consulting firm. That figure is rising 8% per year while overall technology spending rises just 1%. Like physical locks and security guards, cybersecurity adds to GDP but it doesn’t raise our standard of living.
Mr. Mokyr says innovators gravitate to society’s greatest needs. In previous eras, it was cheap and rapid transport, reliable energy, and basic health care. Today, seven of the top 10 problems he says are most in need of innovative solutions are instances of bite-back. They include global warming, antibiotic resistance, obesity and information overload. Fixing these problems may weigh heavily on growth. Yet Mr. Mokyr argues past productivity was overstated because it didn’t include those costs.
Nonetheless, he’s an optimist. For every unintended consequence one innovation brings, another innovation will find the answer. Fluoridation cured tooth decay, and automotive engineers found alternatives to leaded gasoline. And distracted driving? Driverless cars may take care of that plague before long.