It’s hard to anticipate which new technologies will change the world. Consider the humble shipping container, which allows importers and exporters to transport standardized loads from trucks and railcars onto mammoth ocean-going vessels. In The Box, Marc Levinson describes how this seemingly unremarkable innovation made global economic integration possible. But at the dawn of containerized shipping, in the mid-1950s, people were a lot more excited about Sputnik, and the tantalizing prospect of human colonies on the moon. No one gave much thought to the possibility that a bunch of boxes would drive a massive, decades-long economic boom in East Asia, or would hasten the decline of manufacturing employment in the United States.
Are there any technological innovations in our own time that might have a similarly enormous effect, for better or for worse?
There is reason to be skeptical. Robert J. Gordon, a Northwestern University economist legendary for his brilliance and crankiness, argues that the era of robust American economic growth has come to an end. Gordon’s view, in very simplified terms, is that today’s technologists are giving us new chat software, immersive video games, and all manner of cold-pressed juices rather than truly growth-enhancing innovations like, say, the internal-combustion engine or penicillin. I happen to believe that Gordon is being too hard on cold-pressed juices. What’s not to like? But he does have a point. Smartphones have made Apple’s biggest shareholders fabulously rich, but have they done as much to boost our productivity as, say, electric lighting or the automobile? Productivity growth is the ultimate source of the increases in our collective prosperity, and productivity growth has been maddeningly sluggish for years.
But before we give in to despair, with only a wide variety of delicious juices to soothe us, there is one technology on the horizon that has at least as much potential as containerized shipping. It’s called, rather embarrassingly, “holoportation.” Over the coming decades, I suspect it will do to trade in services what containerized shipping has done to trade in manufactured goods.
What is holoportation? Basically, the mad scientists at Microsoft Research have cooked up a way to transmit pretty convincing three-dimensional holograms of friends, family, and (here’s the important part) co-workers in real time across vast distances. Most impressively, you can interact with these holographic projections, almost as though you were physically in the same place. If I were capable of explaining it any better than that, I would be in a garage building my own holoportation device. The video below gives you some sense of the technology’s potential, and how it works in practice.
Lest I be accused of pro-Microsoft propaganda, there are a number of companies driving innovation in virtual reality. Oculus, Samsung, and HTC are all releasing commercial VR products that are getting better and cheaper all the time. Though virtual-reality technology has been centered around gaming thus far, it is only a matter of time before other, more prosaic applications gain ground.
Last summer, Christopher Mims of the Wall Street Journal waxed lyrical on VR’s potential, going so far as to anticipate a time when we’ll use holoportation-style tech “not because it’s an adequate replacement for meeting someone face to face, but because it’s actually better.” Mims interviewed Stanford University’s Virtual Human Interaction Lab’s Jeremy Bailenson, who told him that the goal of his work was “ending unnecessary travel that you feel like you had to do for some implicit cultural reason.” In other words, Bailenson hoped to use VR technology to bring about what journalist Frances Cairncross dubbed “the death of distance” in her 1997 book of the same name.
Yes, I know that techno-enthusiasts have been anticipating the death of distance for decades, going back to the telegraph and the telephone. And yet, even as we load our pockets with ever more fantastical gewgaws, we travel as much if not more than we did when the only way to talk to someone was to open your mouth a reasonable distance from her ears. Despite the proliferation of Internet-enabled communication, dense cities—places where people gather to share ideas—have grown more attractive rather than less. So the death of distance is just a myth, is it not?
Not quite. The advent of new communications technologies has drastically lowered the costs associated with collaborating with people living elsewhere. If you’re working in Los Angeles, you might want to visit your colleagues in Kansas City a few times a year. But instantaneous communication via Skype or Slack allows you to sustain connections in between those visits, and to get meaningful work done. The promise of VR is that it can offer an experience a bit better and more immersive than the communications technologies we now consider run of the mill, and that it will allow you to get away with flying just a little bit less. Given growing concerns about the dangers posed by climate change, it’s not hard to imagine a world in which constant travel will be seen as scandalously irresponsible on environmental grounds alone, not to mention the fact that it can be exhausting and dispiriting.
But VR technology isn’t just going to shape the lives of the global jetset. In the years to come, it may well transform our immigration debate. Advocates of large-scale immigration argue that U.S. workers and consumers benefit from it in a number of ways, and they’re right. Less-skilled migrant workers often fill jobs that native-born workers would only take on for relatively high wages, thus making a wide array of services more available to working- and middle-class consumers. Skilled immigrant workers, meanwhile, can collaborate with skilled native workers in ways that bring substantial benefits to both.
But immigrant workers aren’t simply economic cogs, as George Borjas argues in his forthcoming We Wanted Workers. They are also human beings who fall ill, and who need to meet their own basic needs and those of their families. While consumers might welcome the prospect of paying less for restaurant meals, tutoring, or other services that immigrant workers can provide, we might be concerned when the low incomes that immigrant-headed households earn aren’t enough to provide them with a decent standard of living. Virtual reality technology provides a potential solution: What if VR allows consumers in affluent countries to enjoy all of the benefits associated with a low-wage immigrant workforce while freeing them from bearing the costs associated with providing immigrant workers and their families with Medicaid, SNAP, and the earned-income tax credit?
If that all sounds rather sinister, keep in mind that the wages one can earn in the world’s rich countries will go much further in the world’s poor ones. That is why so many citizens of poor countries seek their fortunes abroad: Many of them simply want to send money to their families back home. The World Bank has found that the remittances that immigrants in rich countries send to their relatives dwarf the sum total of foreign aid.
What if it were possible to earn in a rich country, where the costs of housing and medical care and other necessities tend to be quite high, while spending in a poor one, where these costs tend to be far lower? That is the strategy of rich-country expats who take savings accumulated in England or Arizona to finance lavish lifestyles in Costa Rica or Thailand. And of course there are many migrants who spend a few years in Dubai or Dallas and then return home to build more prosperous lives. VR technology could greatly increase opportunities for people, including those who live in the world’s poorest countries, to engage in this kind of geographical arbitrage.
If this sounds too kooky to be true, you might want to take a look at the much-ballyhooed education start-up Udacity. For $299 per month, you can sign up for Udacity’s Nanodegree Plus program, which will train you to be learn the tools of a particular software programming trade at your own pace. If you don’t land a job within six months of graduating, Udacity will refund 100 percent of your tuition.
How can Udacity afford to pull this off? The company employs paid graders around the world, who do the labor-intensive work of evaluating projects submitted by students. People with the skills and know-how to grade these projects are in high demand, and Udacity couldn’t offer such low prices if it hired only Americans to do this work. By global standards, the U.S. is a high-productivity, high-wage society, and people who know software have many other lucrative employment opportunities. So Udacity hires people in India and other foreign workers with roughly the same skills. Indians who work for Udacity while remaining in India find that wages that are low by U.S. standards can provide them with quite comfortable incomes, not to mention the fact that staying home means they can remain close to their families.
Udacity employs many highly skilled Americans, and its services help many more Americans get good middle-class jobs. But just as the iPhone is the product of American designers and Chinese assembly-line workers, Udacity is globalizing the supply chain of education. It’s not the first company to do so and it certainly won’t be the last.
If VR proves to be as big a deal as containerized shipping, we’ll soon be living in a very different world. Brainy people in poor countries will no longer have to abandon their homelands to improve their standard of living, as they can do the jobs of the future wherever they can set up their VR rigs. Consumers in rich countries will gain access to cheaper medical care and educational services, among many other things, as foreign doctors and teachers start offering their services via VR. All of our debates over occupational licensing and teachers unions will seem pretty quaint when Piotr from Gdansk can use holoportation to remodel our house by remotely controlling a man-sized Constructionbot.
Naturally, the advent of what we might call “virtual immigration” will put pressure on workers competing with these virtual immigrants, just as automation and the offshoring of manufacturing has put pressure on domestic manufacturing workers, and just as non-virtual immigration puts pressure on native and foreign-born U.S. workers. But VR is advancing at breakneck speed, and all the regulatory barriers in the world aren’t going to keep consumers from making use of service workers in other countries who are willing to do the same jobs for less. The real question is whether we will embrace virtual immigration as an opportunity or see it as a threat.
