April 05, 2017      

The idea of a universal basic income is growing in popularity worldwide, from Canada and Finland to India and beyond. Why? Like proposed taxes on automation, it’s one reaction to the predictions that millions of people will lose their jobs to robots.

In my previous article, we looked at how different countries are looking to offset displacements from robotics and artificial intelligence. Now, let’s consider the pitfalls of and challenges to a universal basic income (UBI) and what it means for robotics companies.

Business Takeaways

  • Countries could deploy and deliver a universal basic income in different ways. One nation might simply provide money, while another could enact new regulations on robotics companies.
  • There are several unknowns around basic income schemes. How will they affect worker motivation and productivity?
  • UBI may be the first of several steps that governments take to rein in automation and the impact of robotics and AI on society.

Land of laziness?

Each business depends on its employees to be productive. But what incentive is there if workers receive a basic income from the government, regardless of how they perform?

Last year, The New Yorker examined a basic income pilot that took place in Manitoba, Canada, during the 1970s. The program’s goal was to see how UBI might alter people’s behavior. For instance, would they quit their jobs?

A basic income could be part of a country's existing social programs.

It remains to be seen whether a basic income would lead to a proletariat’s paradise or an employer nightmare.

The pilot found that society could actually benefit with the introduction of a basic income. The number of people in hospitals declined, and young teenagers stayed in the education system, according to the test data.

The Guardian proposed that the U.K. already has a basic income scheme and that the recipients of this scheme aren’t lazy. They are the members of the royal family.

The point is that, besides a few trials, there is a void in understanding how employees would change if their incomes were no longer tied to their jobs.

For most of us, the typical basic income scheme wouldn’t replace all of our salaries. But it could supplement them enough to affect our choices — even beyond the workplace.

Delivering a basic income

How would universal basic income be delivered? In advanced nations, there is little concern over bank transfers or checks being sent out via mail. But the situation is different in the developing world, where corruption remains rampant and many people do not have bank accounts.

Take Uganda. Early this year, eight Belgian charities launched a two-year basic income scheme. All residents in 50 homes would receive basic income that translates into $18.25 (U.S.) for adults and $9.13 for children, every month.

The problem is there are more cell phones than bank accounts in Uganda. Only 29% of adults have access to banks.

Perhaps this is where a technology like blockchain can play a role. In January, a charity that hands out Grantcoins sent out “basic income grants” of this digital currency to 1,132 people in 79 countries. This is the second time it has used blockchain.

Blockchain could be a model for delivering basic income in the developing world.

Such technologies could be a model for delivering UBI to populations in emerging economies, like Uganda or India, where people are more likely to have phones and mobile bank accounts than traditional bank accounts.

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Consequences for robotics companies

Universal basic income schemes could affect robotics suppliers and end users in several ways. The first consequence is rather ironic. The very technologies that robotics companies are developing could force governments to introduce basic income. This could in turn will affect their own employees’ productivity and change a society’s behavior and economy.

Second, because UBI is not limited to developed countries, how it takes off around the world may differ. For example, how UBI is deployed and delivered in the Netherlands may be completely different from how a country like Saudi Arabia responds.

The Netherlands could simply tackle UBI by delivering financial assistance. But Saudi Arabia might also look at how to control robot-induced joblessness through new regulations.

Third, some countries may not want to introduce basic income schemes because of a political backlash or other reasons. Their governments could instead work with businesses to ensure that people aren’t laid off when they adopt robotics or AI in their operations.

Pros and cons of basic income.

Are robotics companies prepared to change their products and services to accommodate government fears?

Universal basic income has long been viewed as a social program, and it continues to be viewed through that lens. The truth is that UBI may be part of social change, and it has broad consequences for industrial users, workers, and countries as a whole.

Robotics companies need to view basic income as a direct government response to their own innovations. This is similar the way Uber viewed public policy as a direct response to its offerings.

Automation technologies will be far more disruptive than ridesharing, and robotics companies should begin preparing for government reactions such as UBI. It might be just the first of several policy shifts.