By Lauren Keyson and Sarah Grieco
McCarter & English represents about a dozen venture funds, a number of private equity funds, angels and hundreds of tech, tech-enabled and life sciences enterprises. They also created their own unique accelerator program and cofounded a venture fund. Roughly 65% of their client base is the company side now, which crosses virtually every technology center and life sciences. David Sorin is Partner, Co-Chair of the Venture Capital and Emerging Growth Companies Practice, recognized by Pitchbook as among the most active law firms in venture financings, ranking it third in the East, eighth nationally, 10th globally, second in consumer products technologies, 11th in software and 10th in global early stage..
David Sorin: In our client base, we think about the applications of technology and what they do to transform underlying business processes. It’s not merely how you fund any company, but how do you take your company and integrate the new AI and Chatbots – or other technologies – into your business and make it more valuable? What does it do to help monetize your company? While you may not be an AI company yourself, you likely will be using or integrating the technology.
The reliance on artificial intelligence is going to be ubiquitous over the next number of years. I don’t want to put a date on it, but if you asked me when are we going to have driver-less cars all over the place — it’s going to happen and it will be sooner than later. There are people who may not like that; just like people often don’t like or fear change. People love to drive. So the idea of being merely a passenger in a car is not particularly compelling to me, but it is going to happen. I’m not involved in politics, but its something our own political leaders need to focus on. The displacement has been occurring over many years, but the rate of displacement is increasing. We damn well better have policies in place to deal with this.
15 or so years from now – or less — millions of bus, cab and truck drivers will become technologically obsolete. What are we going to do with this gigantic part of our workforce? We’re becoming an increasingly less labor-intensive economy. AI, for example, is going to replace a lot of workers – what happens to those millions and millions of people? We need the equivalent of a Marshall Plan or a GI Bill to ensure that this sizable portion of the workforce will be trained – not for the jobs we are losing, but for the jobs of the future – jobs we don’t currently envision.
Think about the employers in this country. I’m not proud of this fact but look at McDonalds, which I believe is among biggest employers in this country. What happens when businesses opt to replace human capital with less expensive, more productive, more accurate robotic technology for food prep and delivery? What happens when we have forms of payment systems that don’t require order takers to take your money and give you your change? We have to be thinking about what we are going to do in the face of that. I don’t mean to be political. But, instead of talking about putting people back in coal mines, which makes no sense to me, and the way we’ve had this reactionary approach to what’s going on in the world, we should be talking about how are we going to train the workforce for whatever jobs in the future are going to be!
Lauren Keyson: So what do you think of Donald Trump and technology? Do you think he’s going to help it or hurt it?
DS: Well, many of us who are in tech and innovative spaces, also tend to be people who embrace diversity and might be more liberal-minded thinkers. My fear is that so much of what the last election was, and so much of the politicking that exists today, underlies a rightful concern. The role of largely white, middle-aged men has changed and continues to change – frankly many are disenfranchised and have lost their place in this society and economy. It’s not the fault of anybody else; it’s progress and innovation. When millions of truck drivers don’t have jobs anymore, they’re going to be angry and scared. They’re going to be increasingly disenfranchised, and that’s natural. They also will not be prepared if swift, decisive and bold action is not taken. But what we shouldn’t allow to happen is take that fear and anxiety and transform it into a reactionary political environment, which I think is going on right now. Instead of moving boldly into the future and creating the educational and economic systems necessary to meet these changes and challenges, we have become reactionary, blaming immigrants, outsourcing, appropriate and necessary environmental protection laws.
My fear is that the kinds of promises that Trump has made to put people back in coal mines, or to bring manufacturing jobs back or to roll back regulations that are protective of the environment, the air we breathe, the water we drink are foolhardy and do not work to solve the root problems. Instead of fighting to put people back into coal mines or in jobs that are less valuable in a technologically and productive economy, we should accept and embrace the changes and implement policies to extract value. One of my fears is that with the kind of political environment that we have, we can see some sort of technology backlash from the people negatively impacted by progress and innovation. Increasingly we will see that the immigrant is not the enemy, that productivity enhancements are not the enemy and that globalization is not the enemy. Technology itself may soon be viewed as the enemy and that will be a terrible result. I’m afraid of that because if we have that we could start developing policies that will chill innovation rather than encourage it. This is an anti-tech backlash, but I don’t think people are expressing it that way. People are talking like immigrants are taking jobs away from “law-abiding Americans”.
LK: Nobody wants to clean bathrooms at $5 an hour…
DS: That’s partly the point. All of this re-enforces the need to have education reform. We need to have policies to encourage innovation. I liken it to, if you’re standing on the beach on a sunny day and you decide I really don’t want the waves to hit the shore. Well, it’s a fool’s mission because those waves are going to hit the shore no matter what you think or what you want. And innovation and globalization IS going to happen. What we need to do is embrace that and develop policies to encourage the type of innovation that will ultimately improve everybody’s lives. And, we need to educate our students and train our workforce to be capable of meeting the new challenges, not try to hold onto a past that no longer performs.
That means there will be change and a transition. It’s always scary and painful but it doesn’t mean you can or should stop it. I think that’s the problem. What we fear so much today is how do you reverse the loss of jobs in coalmining or jobs in old-lying technological industries. My answer is no, you don’t reverse that at all. Embrace the change, boldly move forward and innovate to create new jobs from new solutions. As your own organization’s name reveals – disruption is necessary and healthy, even as it does cause pain and loss for some. Society needs to incentivize the actions that move us forward, not the actions that seek to reverse course and prevent innovation.