Dave Heatley

I am a principal advisor at the Productivity Commission, currently working on the Technological change and future of work inquiry. I joined the Commission at its inception in 2011 and have worked on five inquiries: international freight transport, trans-Tasman economic relations, services sector productivity, social services and tertiary education.

Sweden vs. New Zealand, with Taiwan in the lead - COVID-19

Dec 11, 2020

Is the Covid pandemic and our collective responses to it best framed as health vs. the economy? That is, are countries forced to make a horrible trade-off between: minimising Covid infection rates at high economic cost; and accepting higher Covid infection rates, this being the cost of maintaining economic activity? This framing underlies many of the popular narratives comparing the performance of individual countries. For example, many have contrasted New Zealand’s “elimination” goal to Covid with Sweden’s “mitigation” approach. These narratives typically characterise New Zealanders as valuing health over the economy, and Swedes as valuing their economy over health.1 We are well into the pandemic now, so we can test this framing against the data.2 I plotted countries with their expected economic performance in 2020 (vertical axis, best performers at top) against their performance in keeping Covid case numbers low … Read More

Moon landings, automation fears and commissions of inquiry - FutureworkNZ

Jul 27, 2019

The 50th anniversary of the moon landings got me thinking about 1960s tech and work. Not that I was working back then – I watched a scratchy B&W TV broadcast at primary school. Source: Wikimedia Commons John F. Kennedy’s 1962 speech is remembered for the line: “We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard”. JFK was responding to evidence of the technological superiority of the USSR, which he saw as an existential threat. As he said, “the vows of this Nation can only be fulfilled if we in this Nation are first, and, therefore, we intend to be first”. The 1960s saw significant change to tech and to work, and concern about possible downsides. To achieve the … Read More

The perils of straight-line forecasting - FutureworkNZ

Jul 25, 2019

Skills scarcity is great. At least when it’s your skills in demand. Scarce skills command a wage premium and those with them are much less likely to face unemployment. (Employers are much less fond of skills scarcity, but they do benefit from skills gluts.) But, when considering training or retraining, how do you pick skills and occupations that will be scarce in the future? Well, one way or another, you will end up relying on a forecast. It’s hard to think in an organised way about the future without forecasting. So, it’s a significant theme in this blog. I’ve previously covered job-loss predictions, technology predictions, AI tech forecasts and diverging forecasts. Along the way I’ve found some bloopers worth sharing. This recent … Read More

Blocking agri-tech doesn’t mean we can block its undesired effects - FutureworkNZ

Jul 18, 2019

New tech. A traditional local industry. Who wouldn’t we be concerned about potential negative effects? So why don’t we just stop it at the border? The problem is that price effects can undermine the effect and the intent of banning tech at the border. In this post I explore three ways that could happen with new agri-tech and what lessons we might draw about trying to block the introduction of automation tech in general. Example 1: A local ban on agricultural-robots to protect workers Let’s say that an agricultural product is produced in NZ and one other country. Call it Chile. Both countries sell to their local markets and export to the rest of the world. Now suppose robots become available that reduce production costs by 20%. Chile decides to import robots. NZ bans them – with the intent of … Read More

What to do when forecasts diverge? - FutureworkNZ

Jul 17, 2019

The nice thing about forecasts is that you have so many to choose from.1 For the weather, you can choose between MetService, metvuw, yr, the Weather Channel and many others. It’s best if they agree to guarantee a perfect day in the mountains… Mt Tasman and Fox Glacier. Photo: Sue Rundle But what should one do when faced with diverging forecasts? I’ve been hunting out the headline job loss figures from studies and reports looking at automation and the future of work. My inspiration came from a Deloitte report that graphed the headline figures from seven studies2. With some studious Googling, I found a further eight. Here’s my update of Deloitte’s graph: Admittedly, the studies aren’t all forecasting the same thing. Read More

The demand for statisticians and Easter bunnies - FutureworkNZ

Jul 08, 2019

The right job in the wrong place. For many, that’s the reality of job search in New Zealand’s less populated regions. And regional employers face the flip side – the right worker in the wrong place. Labour markets are inherently regional because commuting time subtracts from work and leisure time. On average, New Zealander workers spend 40 minutes a day travelling to and from work.1 Few are willing to travel for more than an hour each way, so two towns more than an hour’s travel apart are essentially separate labour markets. The size of a labour market matters. The larger the town (or city), the more likely it is to have what economists call a “thick” labour market. Labour markets are typically characterised by heterogeneous workers and jobs. Good matches between the skills and talents potential employees have, and the … Read More

Reading past the job-loss headlines - FutureworkNZ

Jul 01, 2019

“Machines take jobs” cry the headlines. A journalist friend once said the media only publish two stories: “it’s that terrible” and “isn’t that wonderful”. “Machines take jobs” is clearly “terrible”. But its logical opposite, “machines create jobs”, is unlikely to make the grade as “wonderful”. Such selection effects mean that bad news crowds out the good. Today I’m going to look at just one such headline: Exclusive: Amazon rolls out machines that pack orders and replace jobs. Reading past such a headline tells us a more nuanced story. When we hear about job losses our concerns naturally turn to those losing the jobs. But, without further information, we may also assume that the direct job loss figures also accurately describe the aggregate labour market effects. This post makes the general point that while the direct labour … Read More

Is the post-2012 acceleration in automation tech sustainable? - FutureworkNZ

Jun 28, 2019

Can automation tech keep improving at the current rate? First, how good is today’s AI-enabled software? There is no question that it is a lot better at specific tasks than its predecessors. These tasks are more than toys – they include classifying photos, language translation, speech recognition and text synthesis. My photo library has lived on an iPad for many years now. More recently, Apple added AI-based image classification to its operating system. Search for “beach”, and scenes like this pop up: Dave Heatley. But Apple’s AI makes some perplexing errors. On the left, Turoa ski field is a “beach” (a false positive), while on the right, Murray Beach on Stewart Island doesn’t make the cut (a false negative).                         … Read More

Which technologies drive concern over the future of work? - FutureworkNZ

Jun 24, 2019

Biotech. Nanotech. Cleantech. Gene tech. Cloud computing tech. Successive waves of technological change are the norm for those of us in the developed world. These waves typically rise, peak and ebb while barely raising a concern about wider labour market effects. Further, it seems strange to be worrying about unemployment – technologically induced or otherwise – when, according to The Economist, across the rich world, an extraordinary jobs boom is under way. In New Zealand, workforce participation is at a historic high while unemployment is also very low (in its second-lowest dip in nearly 40 years). So, what is this “tech” that has everyone worried? And how does it differ from the regular, garden variety tech? Most of the noise is around robots, autonomous vehicles, bots and artificial intelligence (AI). Broadly speaking, these are automation technologies, … Read More

The future of volunteer work - FutureworkNZ

Jun 21, 2019

I only know one economist joke. A plane carrying economists plummets towards the ground after its engines fail. In a quiet cabin, an economist pipes up: “in my model the demand for parachutes just peaked, and the market will increase supply”. This caricature of economists — withdrawn, unemotional and overly trusting in simplistic models — has at least a grain of truth. But reality is, as always, much more interesting. Today I’d like to acknowledge National Volunteer Week by considering what economics has to say about volunteer work and what might change in a more-automated future. The author with a freshly banded kea, Stuart Mountains, Fiordland. Photo: Sue Rundle Karl Marx in the 19th Century and John Maynard Keynes in the 20th both wondered what we’d do with our spare time once machines produced all … Read More