Rapid technological advances are transforming the global workplace. But fears that automation will permanently destroy American jobs are misplaced, according to Joe Davis. Instead, the jobs that require “uniquely human” skills will proliferate, Davis said.

Davis was the keynote speaker at the Morningstar ETF conference in Chicago on September 6. He is a principal and Vanguard's global chief economist. He is also head of Vanguard Investment Strategy Group, whose research team is responsible for helping to oversee the firm's investment methodologies and asset allocation strategies for both institutional and individual investors. In addition, he is a member of the senior portfolio management team for Vanguard Fixed Income Group, which oversees more than $500 billion in assets under management.

Davis began by identifying three paradoxes that characterize the U.S. economy:

  1. Low inflation but full employment
  2. Low growth but high equity valuations – the “new normal” is news to the financial markets, Davis quipped
  3. Low volatility but uncertainty surrounding fiscal and monetary policies and ongoing geopolitical risks

Some view those paradoxes as isolated or unrelated, Davis said. But he claimed they are “touchstones of a larger force that will fundamentally alter the lives of millions of people on this planet.”

Indeed, he said, we are not in a period of stagnation, but in a period of disruption.

“Humans are remarkable at adapting to change,” he said. “Hugely disruptive technologies” will accelerate growth and create new jobs.

To understand this, Davis said we need to pivot from GDP and productivity as the dominant metrics of growth. Instead, we should focus on the standard of living.