The Economist "Effect of technology on tomorrow’s jobs immense - no country is ready"

[Abraxas]

http://www.economist.com/news/leade...rows-jobs-will-be-immenseand-no-country-ready

Coming to an office near you

The effect of today’s technology on tomorrow’s jobs will be immense—and no country is ready for it

Jan 18th 2014 | From the print edition

INNOVATION, the elixir of progress, has always cost people their jobs. In the Industrial Revolution artisan weavers were swept aside by the mechanical loom. Over the past 30 years the digital revolution has displaced many of the mid-skill jobs that underpinned 20th-century middle-class life. Typists, ticket agents, bank tellers and many production-line jobs have been dispensed with, just as the weavers were.

For those, including this newspaper, who believe that technological progress has made the world a better place, such churn is a natural part of rising prosperity. Although innovation kills some jobs, it creates new and better ones, as a more productive society becomes richer and its wealthier inhabitants demand more goods and services. A hundred years ago one in three American workers was employed on a farm. Today less than 2% of them produce far more food. The millions freed from the land were not consigned to joblessness, but found better-paid work as the economy grew more sophisticated. Today the pool of secretaries has shrunk, but there are ever more computer programmers and web designers.

Remember Ironbridge

Optimism remains the right starting-point, but for workers the dislocating effects of technology may make themselves evident faster than its benefits (see article). Even if new jobs and wonderful products emerge, in the short term income gaps will widen, causing huge social dislocation and perhaps even changing politics. Technology’s impact will feel like a tornado, hitting the rich world first, but eventually sweeping through poorer countries too. No government is prepared for it.

Why be worried? It is partly just a matter of history repeating itself. In the early part of the Industrial Revolution the rewards of increasing productivity went disproportionately to capital; later on, labour reaped most of the benefits. The pattern today is similar. The prosperity unleashed by the digital revolution has gone overwhelmingly to the owners of capital and the highest-skilled workers. Over the past three decades, labour’s share of output has shrunk globally from 64% to 59%. Meanwhile, the share of income going to the top 1% in America has risen from around 9% in the 1970s to 22% today. Unemployment is at alarming levels in much of the rich world, and not just for cyclical reasons. In 2000, 65% of working-age Americans were in work; since then the proportion has fallen, during good years as well as bad, to the current level of 59%.

Worse, it seems likely that this wave of technological disruption to the job market has only just started. From driverless cars to clever household gadgets (see article), innovations that already exist could destroy swathes of jobs that have hitherto been untouched. The public sector is one obvious target: it has proved singularly resistant to tech-driven reinvention. But the step change in what computers can do will have a powerful effect on middle-class jobs in the private sector too.

Until now the jobs most vulnerable to machines were those that involved routine, repetitive tasks. But thanks to the exponential rise in processing power and the ubiquity of digitised information (“big data”), computers are increasingly able to perform complicated tasks more cheaply and effectively than people. Clever industrial robots can quickly “learn” a set of human actions. Services may be even more vulnerable. Computers can already detect intruders in a closed-circuit camera picture more reliably than a human can. By comparing reams of financial or biometric data, they can often diagnose fraud or illness more accurately than any number of accountants or doctors. One recent study by academics at Oxford University suggests that 47% of today’s jobs could be automated in the next two decades.

At the same time, the digital revolution is transforming the process of innovation itself, as our special report explains. Thanks to off-the-shelf code from the internet and platforms that host services (such as Amazon’s cloud computing), provide distribution (Apple’s app store) and offer marketing (Facebook), the number of digital startups has exploded. Just as computer-games designers invented a product that humanity never knew it needed but now cannot do without, so these firms will no doubt dream up new goods and services to employ millions. But for now they are singularly light on workers. When Instagram, a popular photo-sharing site, was sold to Facebook for about $1 billion in 2012, it had 30m customers and employed 13 people. Kodak, which filed for bankruptcy a few months earlier, employed 145,000 people in its heyday.

The problem is one of timing as much as anything. Google now employs 46,000 people. But it takes years for new industries to grow, whereas the disruption a startup causes to incumbents is felt sooner. Airbnb may turn homeowners with spare rooms into entrepreneurs, but it poses a direct threat to the lower end of the hotel business—a massive employer.

No time to be timid

If this analysis is halfway correct, the social effects will be huge. Many of the jobs most at risk are lower down the ladder (logistics, haulage), whereas the skills that are least vulnerable to automation (creativity, managerial expertise) tend to be higher up, so median wages are likely to remain stagnant for some time and income gaps are likely to widen.

Anger about rising inequality is bound to grow, but politicians will find it hard to address the problem. Shunning progress would be as futile now as the Luddites’ protests against mechanised looms were in the 1810s, because any country that tried to stop would be left behind by competitors eager to embrace new technology. The freedom to raise taxes on the rich to punitive levels will be similarly constrained by the mobility of capital and highly skilled labour.

The main way in which governments can help their people through this dislocation is through education systems. One of the reasons for the improvement in workers’ fortunes in the latter part of the Industrial Revolution was because schools were built to educate them—a dramatic change at the time. Now those schools themselves need to be changed, to foster the creativity that humans will need to set them apart from computers. There should be less rote-learning and more critical thinking. Technology itself will help, whether through MOOCs (massive open online courses) or even video games that simulate the skills needed for work.

The definition of “a state education” may also change. Far more money should be spent on pre-schooling, since the cognitive abilities and social skills that children learn in their first few years define much of their future potential. And adults will need continuous education. State education may well involve a year of study to be taken later in life, perhaps in stages.

Yet however well people are taught, their abilities will remain unequal, and in a world which is increasingly polarised economically, many will find their job prospects dimmed and wages squeezed. The best way of helping them is not, as many on the left seem to think, to push up minimum wages. Jacking up the floor too far would accelerate the shift from human workers to computers. Better to top up low wages with public money so that anyone who works has a reasonable income, through a bold expansion of the tax credits that countries such as America and Britain use.

Innovation has brought great benefits to humanity. Nobody in their right mind would want to return to the world of handloom weavers. But the benefits of technological progress are unevenly distributed, especially in the early stages of each new wave, and it is up to governments to spread them. In the 19th century it took the threat of revolution to bring about progressive reforms. Today’s governments would do well to start making the changes needed before their people get angry.

To me, the most interesting and potentially challenging thing about the article is the take away that within a few decades, if the Oxford study it to be believed, a full half of the jobs out there right now can be replaced by either robots or software. While new jobs will come about to take their place, as the list of things humans can do better than machines shrinks, I am reluctant to accept that the number of jobs added would be sufficient to replace those lost - let alone keep up with new additions to the labor force. What's more, there don't seem to be any new market sectors on the horizon that don't require extremely high levels of skill and specialization that most low skill workers are never going to be able to achieve regardless of how much training they get.

If this is to be believed, it seems likely to me that we are, in the near future, going to start seeing 20%-40% unemployment or higher as a permanent fixture of the modern economy and getting worse as technology gets better. In particular this seems to hold unless massive reforms are undertaken to change how we understand the function of employment in society. There are things that can mitigate it, such as a reduction in the number of hours in a work week (thus increasing the number of full time workers needed to perform a task), lowering the retirement age (to get people out of the labor market faster and free up their jobs), or moving back to a model like we had a few decades ago where the average household had a primary "breadwinner" but all of these seem like half-measures at best.

Do we need a fundamental realignment of how we view the role of working in a society and the idea that one must work to eat? Is the idea that machines will take all of our jobs overblown or much further away than Oxford or The Economist indicate?

In addition to the article, some of the comments on The Economist's website were interesting as well.

SweetDoug Jan 20th, 15:52

Meet the future. The future doesn’t need you.

Oxford Professors: Robots And Computers Could Take Half Our Jobs Within The Next 20 Years
http://www.prisonplanet.com/oxford-professors-robots-and-computers-could...

Meet the Robot Telemarketer Who Denies She’s A Robot
http://newsfeed.time.com/2013/12/10/meet-the-robot-telemarketer-who-deni...

Google Wants To Build A Robot Army For The Manufacturing Sector
http://www.businessinsider.com/google-robot-technology-2013-12

Motor Authority Nissan Nissan Leaf Self-Driving Car
A Self-Driving Nissan Has Successfully Navigated Public Roads In Japan
http://www.businessinsider.com/a-self-driving-nissan-has-successfully-na...

Doctor Robot Will See You Shortly
http://www.bloomberg.com/news/2013-09-26/doctor-robot-will-see-you-short...

The World's Largest Miner Wants To Replace Its Overpaid Train Drivers With Robots
http://www.businessinsider.com/rio-tinto-replaces-drivers-with-robots-20...

The Less Obvious Dangers Of The Robot Economy
http://www.businessinsider.com/dangers-of-the-robot-economy-2013-9

Robots help counter soaring labor costs
http://www.chinadaily.com.cn/china/2013-11/14/content_17103496.htm

Foxconn Planning To Hire 1 Million Robots
http://techcrunch.com/2011/08/01/foxconn-planning-to-hire-1-million-robots/

Darpa PetMan Robot - Complete info
http://www.youtube.com/watch?v=5S4ZPvr6ry4

SCHAFT robot wins DARPA Robotics Challenge Trials
http://www.youtube.com/watch?v=Rs8m3czkes4

http://www.businessinsider.com/3d-printer-builds-house-in-24-hours-2014-1

Meet "Smart Restaurant": The Minimum-Wage-Crushing, Burger-Flipping Robot
http://www.zerohedge.com/news/2014-01-12/meet-smart-restaurant-minimum-w...

BANK OF AMERICA: 'Long Robots, Short Human Beings'
http://www.businessinsider.com/bofa-long-robots-short-human-beings-2014-1

Patented Book Writing System Creates, Sells Hundreds Of Thousands Of Books On Amazon
http://singularityhub.com/2012/12/13/patented-book-writing-system-lets-o...

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[BurnItDwn]

The way our society is set up is flawwed.. If 50% of jobs can be replaced by robots, then that means there's less work that needs to be done by people. Thus, everybody can work half as much to get the same amount done ...

Every time productivity goes up, it seems like the people get screwed. When in reality, everybody should be able to gain from this. More free time for all with no loss in productivity. Awesome!

 

[theeedude]

The way our society is set up is flawwed.. If 50% of jobs can be replaced by robots, then that means there's less work that needs to be done by people. Thus, everybody can work half as much to get the same amount done ...

Every time productivity goes up, it seems like the people get screwed. When in reality, everybody should be able to gain from this. More free time for all with no loss in productivity. Awesome!

That's how I see it too. This automation is not actually improving working people's lives all that much, because while productivity is higher, the bargaining power of workers is lower. Used to be you could support a family on one working class income. Now we got both parents working, and still much less financially secure.

 

[Abraxas]

The way our society is set up is flawwed.. If 50% of jobs can be replaced by robots, then that means there's less work that needs to be done by people. Thus, everybody can work half as much to get the same amount done ...

Every time productivity goes up, it seems like the people get screwed. When in reality, everybody should be able to gain from this. More free time for all with no loss in productivity. Awesome!

Great in theory but the problem is that the jobs that remain tend to be more specialized and higher skill which makes it very challenging to transition those who have their jobs displaced and just have everyone work half the time. Plus that incurs additional costs on businesses in benefits when they have twice as many workers even if they are only working half time. It is a start and I see it helping some, but I think that is only a partial solution.

 

[Triumph]

As a thought experiment its a good exercise to take the advance of technology to its logical extremes - complete replacement of almost every job function. In that case, what are humans left to do? Some optimists see a future of altruistic people who spend their time creating art and music and studying the heavens and loving everyone. Yeah, right. When people aren't occupied by a job, and everything is provided to them, things turn bad.

 

[theeedude]

I don't think education is going to be a savior it once was either.
You aren't going to outrun Moore's law. No amount of education will make human productivity double every 18 months on average. Whatever education you are getting, there is a good chance computers will be able to do it, and if not, there is going to be a glut of other educated people competing for those jobs.

 

[Franz316]

How humanity adapts our society to ever advancing technology is going to be the story of this century. Some hard questions of how the economy should operate are going to need to be asked. I personally think automation should be embraced and its fruits passed on to everyone.

Nothing about increasing automation or having more college educated people should ever be considered a 'problem.' It's only a problem if you cling to the past and are unable or unwilling to adapt to a changing reality.

 

[Franz316]

As a thought experiment its a good exercise to take the advance of technology to its logical extremes - complete replacement of almost every job function. In that case, what are humans left to do? Some optimists see a future of altruistic people who spend their time creating art and music and studying the heavens and loving everyone. Yeah, right. When people aren't occupied by a job, and everything is provided to them, things turn bad.

We don't know that yet. There has never been a time like this in human history. Will some people sit on the couch all day and drink booze? Probably.. but that would get old really fast. That viewpoint also comes mainly out of our current thought processes. People still have an inclination to contribute to a greater cause whether money is involved or not. I.e. open source, volunteering, hobbies, charities, etc. There will always be more to learn and explore, humans are curious like that.

 

[amyklai]

If this happens, it will further strengthen the position of the company owners vs the employed.

Considering that today Oxfam published a study according to which the richest 85 people in the world have more wealth than the poorest 3.5 billion, that's definitely not good news.

 

[Vic]

Luddite nonsense.

 

[Aldon]

Inequality will be at a record high as more jobs will be controlled by technology. The poorest are also considered to be less educated than the wealthiest, unfortunately. Who's going to get that job that requires more technological knowledge?

Yes, technology eliminates and creates, but this is and will not be different for anything that is thought to fix anything. There will also be a consequence for an action.

Our education system sucks ass. Badly. Investing into preschool is a waste of money. There are hundreds of thousands of people trying to get that one interview, but lack the degree.

 

[ivwshane]

So the real questions are, to me, what does the future look like? Does capitalism still work? How does the "Star Trek" future work? Why are we not pushing for that future now? Why not embrace it instead of waiting for it to happen?

Either violence or war will break out and everything will be reset (which is essentially what has happened in history, time and time again), or people come together and usher in a new golden age.

All I hear or see is capitalism!!! Rah! Rah! Socialism, communism boo!!!
Anything supporting the former is cheered and anything that doesn't have to do with any of the above is accused of being socialist or communist based. Looks like a reset will be the result.

 

[Abraxas]

Luddite nonsense.

How so? One can be in favor of new technology, in favor of pushing the development of new technology, while believing new technology is going to fundamentally change the way global economics works going forward and change how we see ourselves in a society where we define ourselves by our profession.

 

[Jhhnn]

Inequality will be at a record high as more jobs will be controlled by technology. The poorest are also considered to be less educated than the wealthiest, unfortunately. Who's going to get that job that requires more technological knowledge?

Yes, technology eliminates and creates, but this is and will not be different for anything that is thought to fix anything. There will also be a consequence for an action.

Our education system sucks ass. Badly. Investing into preschool is a waste of money. There are hundreds of thousands of people trying to get that one interview, but lack the degree.

In the end, it doesn't make much difference how many people have degrees if the number of jobs for such individuals is well below their numbers. Such is the case today, and likely into the foreseeable future.

The current emphasis on education doesn't solve employment issues but rather just delays them. We have a whole generation of college students acquiring degrees for jobs that won't necessarily be there.

What it amounts to is that we need to create an alternate distribution system or we need to create more jobs, and we need to be able to automatically trend one way or the other depending on the labor market.

We need to accept the idea that less total human work is necessary, figure out how to have that fact work for everybody.

 

[DucatiMonster696]

We don't know that yet. There has never been a time like this in human history. Will some people sit on the couch all day and drink booze? Probably.. but that would get old really fast. That viewpoint also comes mainly out of our current thought processes. People still have an inclination to contribute to a greater cause whether money is involved or not. I.e. open source, volunteering, hobbies, charities, etc. There will always be more to learn and explore, humans are curious like that.

+1

People are jumping the gun and forming conclusions based on what they know today and not on what develops tomorrow which is something no one can reasonably, with 100% accuracy predict. There are way to many variables involved such as where do population rates go, what happens in regards with human exploration of space, etc and how such automation will work, versus where you will need the human touch, etc.

 

[woolfe9998]

http://www.economist.com/news/leade...rows-jobs-will-be-immenseand-no-country-ready



To me, the most interesting and potentially challenging thing about the article is the take away that within a few decades, if the Oxford study it to be believed, a full half of the jobs out there right now can be replaced by either robots or software. While new jobs will come about to take their place, as the list of things humans can do better than machines shrinks, I am reluctant to accept that the number of jobs added would be sufficient to replace those lost - let alone keep up with new additions to the labor force. What's more, there don't seem to be any new market sectors on the horizon that don't require extremely high levels of skill and specialization that most low skill workers are never going to be able to achieve regardless of how much training they get.

If this is to be believed, it seems likely to me that we are, in the near future, going to start seeing 20%-40% unemployment or higher as a permanent fixture of the modern economy and getting worse as technology gets better. In particular this seems to hold unless massive reforms are undertaken to change how we understand the function of employment in society. There are things that can mitigate it, such as a reduction in the number of hours in a work week (thus increasing the number of full time workers needed to perform a task), lowering the retirement age (to get people out of the labor market faster and free up their jobs), or moving back to a model like we had a few decades ago where the average household had a primary "breadwinner" but all of these seem like half-measures at best.

Do we need a fundamental realignment of how we view the role of working in a society and the idea that one must work to eat? Is the idea that machines will take all of our jobs overblown or much further away than Oxford or The Economist indicate?

In addition to the article, some of the comments on The Economist's website were interesting as well.

I've been saying exactly this for years on P&N. The argument is never refuted, but it never gets much attention. Example:

http://forums.anandtech.com/showthread.php?t=2363762&highlight=woolfe9998

No, the idea isn't overblown. You can already see such things as automated check-out in supermarkets replacing cashiers, computer chatboxes dispensing an ever increasing portion of customer service, and robot cleaners evolving to where they can eliminate the need to pay people to clean your house (for those who do not do it themselves).

We aren't going to re-train everyone for jobs which require more innate intelligence and/or talent than they have, even if such jobs could exist in sufficient numbers. Re-training through improving education was possible in the past because a high percentage of people doing menial work were intelligent enough to do more complex work. That was back when 85% of the work force did menial jobs. We're now at the point where virtually everyone who is capable of doing cognition intensive work has been to college and is already doing it. Those who are not, cannot. Which means that as technology eliminates most forms of physical labor and simple, repetitive non-physical labor, short of wide-spread genetic engineering, there will be an enormous percentage of the population out of work.

The problem with the part time work idea is that entities which employ workers do not consider it to be efficient, for the most part. They'd rather have fewer workers who are full time. I suppose governments could mandate that most or all work be part time, but that still doesn't solve the basic problem: that in the future the available jobs will be beyond the innate abilities of a good portion of the population. It doesn't matter if there's a part time job available if you cannot do the job.

All of this mean exactly what you suggest above - that the entire paradigm of earning one's basic subsistence through labor will become outdated. And the left/right argument about "redistribution of wealth" will become moot. It doesn't matter if social safety nets encourage laziness and low motivation when the jobs do not exist. The question then becomes rather academic: we can either let them starve, or not.

 

[chucky2]

This is why I'm in favor of reducing our population and locking down the borders. These problems are going to take large sums of money and be complicated to solve the more people exist in countries that can afford these technologies - and nearly all countries will be able to afford them eventually.

Start getting control of our population before it gets control of us.

 

[Hayabusa Rider]

we can either let them starve, or not.

Why do you think "we" have a say in any of this. You can eventually be replaced by a machine and I as well. There won't be anyone who has much of a say, unless we're looking at a worldwide equivalent of the French Revolution.

This is a very hard problem as it requires a shift away from how businesses are viewed and the role they and government play. What will need to go is the concept of meeting the next quarter goals and market expectations and that's not nearly all. What we consider to have value has to change as well. If not then the French Revolution comparison may not be far off at all. People will simply not lie down and starve.

 

[woolfe9998]

Why do you think "we" have a say in any of this. You can eventually be replaced by a machine and I as well. There won't be anyone who has much of a say, unless we're looking at a worldwide equivalent of the French Revolution.

This is a very hard problem as it requires a shift away from how businesses are viewed and the role they and government play. What will need to go is the concept of meeting the next quarter goals and market expectations and that's not nearly all. What we consider to have value has to change as well. If not then the French Revolution comparison may not be far off at all. People will simply not lie down and starve.

If half the population is out of work but due to high productivity, goods and services are cheap, having a safety net will be a no-brainer. If for no other reason than to stave off political and social unrest, i.e. what you refer to as the "French revolution."

I'm not as cynical as you are. I seriously doubt apoclypic scenarios including global revolutions and other conflagrations. I think enlightened self-interest will likely be sufficient to avoid the most extreme outcomes. There will be pain along the way though.

 

[WhipperSnapper]

That's just another article that attempts to blame technology and a lack of education for the effects of Global Labor Arbitrage.

 

[Hayabusa Rider]

If half the population is out of work but due to high productivity, goods and services are cheap, having a safety net will be a no-brainer. If for no other reason than to stave off political and social unrest, i.e. what you refer to as the "French revolution."

I'm not as cynical as you are. I seriously doubt apoclypic scenarios including global revolutions and other conflagrations. I think enlightened self-interest will likely be sufficient to avoid the most extreme outcomes. There will be pain along the way though.

There are many things which ought to be no-brainers as you say. Not waiting for inevitable consequences would be one, but that is precisely what happens. Our best hope lies in deux ex machina.

 

[glenn1]

The way our society is set up is flawwed.. If 50% of jobs can be replaced by robots, then that means there's less work that needs to be done by people. Thus, everybody can work half as much to get the same amount done ...

Every time productivity goes up, it seems like the people get screwed. When in reality, everybody should be able to gain from this. More free time for all with no loss in productivity. Awesome!

Most people are already at the upper limits of their productivity. And the very last thing people on the bottom end of the productivity curve need is more free time; if anything we need to enforce some level of production from them even if their output is basically useless.

 

[glenn1]

That's just another article that attempts to blame technology and a lack of education for the effects of Global Labor Arbitrage.

Is "global labor arbitrage" your fancy way of saying pay rates should depend on geography and the accident of birth location rather than actual skills or production, e.g. an American should get paid more simply because they are American, instead of because they have marketable skills beyond what can be done by a completely unskilled 2nd grader in Bangaladesh?

 

[Jhhnn]

Is "global labor arbitrage" your fancy way of saying pay rates should depend on geography and the accident of birth location rather than actual skills or production, e.g. an American should get paid more simply because they are American, instead of because they have marketable skills beyond what can be done by a completely unskilled 2nd grader in Bangaladesh?

And you claim that ownership based on geography & accident of birth is a more legitimate way to distribute reward? Are you claiming that American Execs should be paid more than Bangladeshi execs for the same job?

 

[Jhhnn]

Most people are already at the upper limits of their productivity. And the very last thing people on the bottom end of the productivity curve need is more free time; if anything we need to enforce some level of production from them even if their output is basically useless.

Ooooh! OoooHHH! Make the lazy bastards work!

Just stroking that classist authoritarian chubby, huh?