From universal childcare to R&D funding for start-ups, tech companies must look at smart ways to get communities to buy in to the AI revolution, says Paul Ormerod

The recent midterm elections in America have already generated a massive amount of media commentary. Most of it of course is on the potential political ramifications.

But there was an important economic aspect to both the campaigns and the results. Namely, the antipathy which emerged towards AI. This was symbolised in the results of 45 local referendums which took place on data centres. In 44 of these the proposal for a data centre was rejected.

Democrat candidates were particularly vociferous in their hostility towards both the centres and the technology in general. This is hardly surprising, given the enormous support they attract from liberal arts graduates whose lifestyles and employment are being undermined by AI.

A coordinated campaign against data centres took place across Europe last weekend. Most were peaceful but in Amsterdam substantial damage was inflicted on a Microsoft data centre construction site.

An easy characterisation of these events is to label the voters and protesters as Luddites. The original Luddite movement peaked nationally in the decade of the 1810s, protesting against how the revolutionary technology of machines was slashing the wages, often of previously high skilled and high paid (for the time) workers.

Machinery was smashed, and the British government responded by making it an offence punishable by either transportation or death.

Despite this, social unrest persisted into the 1840s. But in the end, the Luddites lost and “machinery” prevailed. There was massive economic disruption, and many skilled workers were driven into acute poverty. But the overall benefits were far too substantial to be ignored.

The same will eventually happen this time round with AI. Apart from anything else, countries like China and India are hardly going to pause development simply because members of the middle class are being made downwardly mobile in the West.

The next industrial revolution

But we ought to be able to manage the transition better than we did in the first Industrial Revolution 200 years ago.

A paper published earlier this year by Daniel Goetz and colleagues at the prestigious Brookings Institute in the US does not offer a complete solution. But it does give some important pointers around data centres themselves.

The authors acknowledge that a data centre as such does little for the local economy. There are some construction jobs, but few permanent jobs in the centre itself. True, they are well paid, but otherwise a data centre is not that much different to a logistics warehouse. It does not contribute to the transformation of future prosperity in the area.

A data centre may of course attract more high-tech companies to locate near it. 

But the Brookings report offers more immediate and productive guidelines. These are based on deals which have either already been done or are in active discussion with local and state authorities in the United States.

The authors point out, for example, oil and gas rich states have already received direct payments from oil revenues, through state-operated entities like the Alaska Permanent Fund and the North Dakota Legacy Fund. More recently, New Mexico created a $7bn fund for universal childcare, using endowment revenues from the oil and gas industry. Similar principles can be applied to AI developments.

Local agenda can be developed for enhancing high-tech talent initiatives at local institutions and schools. Alternatively, they might involve securing abundant computing resources for local academic work from an incoming hyper-scaler, or they could entail enlisting partnerships in other forms of R&D at local universities, start-up companies, or entrepreneurial energy companies.

These are early days. But in America, at least, companies in the AI sector are beginning to engage in meaningful ways with local communities to generate outcomes which benefit everyone.

Paul Ormerod is an Honorary Professor at the Alliance Business School at the University of Manchester. You can follow hm on Instagram @profpaulormerod