News

Sep 21, 2023

Bank Technology Conference Highlights Disruption, Innovation and the Economy

Editor’s Note: Richmond Fed Director of Research Kartik Athreya helped

Editor's Note: Richmond Fed Director of Research Kartik Athreya helped facilitate the Bank's partnership with the Atlanta and Dallas Feds in recent years to co-host a Technology-Enabled Disruption (TED) Conference. In this piece, Athreya provides a firsthand perspective about the mission and impact of the fifth annual conference, which took place May 22–23 at the Richmond Fed.

The annual Technology-Enabled Disruption (TED) Conference was established to provide economists, business leaders and policy makers with a better understanding of the ways in which technology enables change and, especially, disrupts existing business practices, altering the environment in which they, and the consumers who are the reason we care about business in the first place, operate.

This year, our conference focused on uncertainty in technology in three sectors:

Against this backdrop, our aim with the event, which included approximately 100 participants from across the nation, and featured presentations from Richmond Fed President Tom Barkin, Atlanta Fed President Raphael Bostic and Dallas Fed President Lorie Logan, was to foster discussion on how to appropriately view the transformative activities happening in technology, and how to address these issues in a fraught macro-economic environment. Despite being faced with high uncertainty, academics, policymakers, business leaders and citizens still have to make decisions regarding critical investments — in equipment, technology, business practices and people.

Throughout the conference, speakers and panelists emphasized how quickly things are changing, specifically in the areas of climate and technology. They made it clear that as consumers we need to pick up the decision-making pace in order to keep up. Here are a few additional highlights from the event:

On Day 1, we were treated to a keynote by trained-anthropologist-turned-financial-press-leader Gillian Tett, who encouraged attendees to step out of our traditional frameworks to better understand the other "tribes" that usually must work together to solve problems in real life: Silicon Valley, Wall Street and policymakers who may each have a different set of norms, language and customs. Andrew Young, chief financial officer at Capital One, further reinforced that these past pandemic years have forced us out of the typical mode of doing business, and how now, as we normalize, we need to think through ways to keep the best of what we’ve learned. He helpfully spoke of business working to "earn the commute" that they may now ask employees to do more of.

Instead of being threatened by the uncertainty, a consistent theme from panelists was the need to accept a fast-changing world. This was apparent in a discussion about ensuring that the expertise of both legacy and alternative energy producers be leveraged to deliver a smart "all of the above" path to a cleaner future, one that would stave off the worst effects of emissions without placing inordinate costs on consumers, both here and elsewhere. One theme here was more negative: The resistance of consumers to accepting prices that more fully reflect the effects on global commons has proved extremely hard to navigate, with the result being the likelihood of damage to vulnerable populations here and elsewhere.

AI was another timely theme, and we heard from the Federal Reserve System's Chief Innovation Officer Sunayna Tuteja, who spoke of the possible "Cambrian moment" we may be on the edge of, along with Tyson Tuttle and academic Anton Korinek. It was a sobering discussion, with Korinek viewing the coming change in AI as likely quite damaging to many groups of workers, even as new and cheaper products and services would likely mushroom.

In any conference that emphasizes technology and disruption, innovation has to be front and center. Evening keynote speaker Eric Budish reviewed important research findings of his related to the issue of whether the "rules of the game" allow for the right kinds of innovation, or reward things we can all recognize as wasteful. Examples came from financial markets, where the "need for speed" in trading — to take full advantage of the specific trading protocols — led to rat races that siphoned off resources from productive activity, and in oncology, where the rewards to marginal life extension at times dominated much more powerful early-stage preventative care. A theme of Budish's remarks was that human ingenuity, at both the individual level and the level of teams who run businesses, is very powerful at extracting privately-beneficial advantage, and if society as a whole is to benefit, policymakers — who set the rules for competition — should know that a lot is at stake in getting it right.

Interested in the content presented at the conference? Recordings of sessions, and a recap of the event by Beth Anne Wilson, director of International Finance Division of the Federal Reserve Board of Governors, from the 2023 TED conference can be accessed on the conference webpage.

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