Technovation with Peter High (CIO, CTO, CDO, CXO Interviews) Power and Progress — Nobel Laureate Simon Johnson on Why AI Is Repeating Industrial-Era Mistakes
Jan 1, 2026
Simon Johnson, a Nobel Prize-winning economist and MIT Sloan professor, dives into the parallels between AI advancements and the Industrial Revolution's pitfalls. He argues that while automation can enhance efficiency, it often neglects job creation, fueling inequality. Johnson warns that lessons from history highlight the importance of inclusive institutions. He critiques current educational funding cuts, calls for better collaboration between universities and communities, and emphasizes the need for innovation that benefits all, not just a few.
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Institutions Determine Who Wins From Technology
- Technological gains only produce broad prosperity when institutions distribute opportunities widely and allow new entrants to flourish.
- Without inclusive institutions, innovation concentrates wealth and fuels social anger, as in early Industrial Revolution Lancashire.
Textile Mechanization Left Weavers Behind
- Johnson recounts mechanization in textiles: spinning was absorbed but mechanized weaving left workers without alternatives for decades.
- That 20–30 year gap produced concentrated fortunes and widespread worker anger in Lancashire.
Automation Outpaces New Job Creation
- Automation replaces tasks at a pace that can outstrip creation of new human-focused tasks, producing long-term wage stagnation for many workers.
- Geographic concentration and globalization amplify this by removing local reemployment options.