in Business & Marketing, Digital & Tech

Automation, AI and the data economy maybe bad news for employment

Stephen Hawking recently spoke out about Automation and AI will decimate middle class jobs in the near future. Furthermore we risk this shift actually worsening inequality and causing significant political upheaval. When people loose their jobs, fear sets in and things get messy.

Over the past 2 decades, the arrival and adoption of the personal computer and everything it can do for us, including its ability to think for us and perform repetitive tasks much better and cheaper then we could ever compete with, has slowly but surely been displacing us in our jobs. Both blue and white collar workers are now at risk of automation by machines in most sectors. This is driving us to move up the food chain to jobs that require more human qualities such as complex thinking and emotional intelligence which machines do not (yet) have.

The industrial revolution, which started with the first machine age (mechanical) has now progressed to the second machine age (computing). The second machine age which we are in started with the computer enhancing our ability to think (cognition) and the arrival of the smartphone catalyzed the pace by placing a second brain in our pockets, which we carry around with us 24/7.

We are currently in the digital era of the second machine age, which is also referred to in general terms as the information age. The mobile revolution brought about largely thanks to Steve Jobs and the iPhone and everything it made possible through our enhanced ability to think and access information on the go, is about to get catalyzed again by artificial intelligence, which is going to unleash unprecedented cognitive abilities that will replace many of the low and middle class jobs we currently staff with humans today. This will force us to move up the food chain to jobs that require qualities that machines not not yet possess.

But is everyone capable of moving up this food chain at the pace technology is advancing and an even bigger question is: Is there sufficient room for everyone at this level? I am afraid the answer maybe disappointing and this is what many experts and great thinkers of our time like Stephen Hawking is worried about.

Technology, the internet and the data economy that is being created from this digital era is giving rise to a new breed of business that is nimble, agile, smart with data, lightly staffed and makes use of technology and automation like never before. The are using “data” as the new “oil” to run businesses in a digital-first world.

The inevitable low and middle class unemployment that is bound to follow will cause fear to emerge, as their human jobs are replaced by machines. It started with the blue collar factory workers in the late 20th century and will now start to affect the middle class white collar workers (including the baby boomers) in the early 21st century. We are going to have to do something about this as it is the developed countries that will feel the impact first.

In a connected world, which is what technology and the Internet has facilitated, distance and time to access information ceases to be an issue. This means that the developing country workforce is now gaining access through technology and the internet to the things that made the developed nations so successful in the past decades. These developing nations will become fully connected in the next 5 years. We will go from 3 to 6 billion people connected to the internet in the next 5 years and this doubling will come from developing countries that currently still suffer from lack of infrastructure and connectivity.

Once this happens, not only will our jobs be displaced or even replaced by machines, connectivity to 6 billion people with similar chances to access information for education and work will kick in. This will be bad news for low and middle class workers in developing countries that are not able to or equipped with the opportunity to move fast enough up the food chain to jobs that can’t be performed (yet) by machines. And even if they all make it, there will likely not be sufficient work for them at this level as this level of work is about cognition and the ability to think and do more with less using machines, artificial intelligence and automation.

A report put out in February 2016 by Citibank in partnership with the University of Oxford predicted that 47% of US jobs are at risk of automation. In the UK, 35% are. In China, it’s a whopping 77% – while across the OECD it’s an average of 57%. And three of the world’s 10 largest employers are now replacing their workers with robots.

Automation will also promote inequality as the new businesses build on the back-end of the internet allowing for enormous profits to be generated with relatively few human workers. This will leave many people out of work while the few that know how to leverage the power of technology, the internet and automation will thrive and this will widen the economic inequality gap around the world, causing instability.

Stephen Hawking says that the anxiety being fueled by this uncertain and distressing possible future is the reason for the rise in right-wing, populist politics in the West.

“We are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing. It is no wonder then that they are searching for a new deal, which Trump and Brexit might have appeared to represent.”

Combined with a range of other distressing issues such as overpopulation in cities and urban areas, climate change concerns threatening the future of our planet, disease threats and their spread in a connected world, Stephen Hawking warns:

“we are in the most dangerous moment in the development of humanity and we must come together if we are to overcome these challenges.”

Stephen Hawking also recently expressed concerns about the end of the human race in the next 1000 years.

“The development of artificial intelligence could spell the end of the human race. It would take off on its own, and redesign itself at an ever increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded.”

But what really sparked me wanting to write this article was to some extent Stephen Hawkins, but to another extent a recent publication (yesterday) in the Financial Times (which is paid but you can access the article via this cached version) titled: Most US manufacturing jobs lost to technology, not trade.

The US did indeed lose about 5.6m manufacturing jobs between 2000 and 2010. But according to a study by the Center for Business and Economic Research at Ball State University, 85 per cent of these jobs losses are actually attributable to technological change — largely automation — rather than international trade.

We are producing more with fewer people:

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Factories in the US have been doing this slowly but certainly by replacing human factory workers with machines. Low-skilled jobs are simply now being filled by robots, which caused millions of Americans to go out of work and seek new employment elsewhere or collect unemployment benefits.

How do people go broke? Very slowly and then all of a sudden.

With artificial intelligence around the corner and actually already well upon us in its primitive form, and technology advancements in the form of self-driving cars, 3D industrial printing, data-driven automation, AI robotics, disruptive social platforms like Uber, Airbnb achieving world dominance with relatively few people, there is bound to be some trouble with unimplemented on the horizon especially in developed countries like the US and parts of Europe (to name a few).

So coming back the the FT articles, by addressing increasing trade protectionism (Trump administration), we maybe addressing the wrong problem and not solve the issue at its cause, which is likely the forces of automation and the transition to a digital era and data economy.

So what can you do to prepare? Make sure you work in a position that can’t be automated by machines. This means you need to work a job that requires human qualities to operate. It means you need to become indispensable as a company starts to find ways of automating processes. Strategic work that requires the power of our complex brains for example. Strategic thinking that requires you to think about the right questions to be asked so that machines can in time provide the answers to allow you to spend even more of your time thinking, creating and strategizing on how best to put those machines to work. It’s not too late. Start planing now.

Here is a source you can read on what jobs will and will not be automated in the future. There is a nice PDF you can download here.

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