Today, I added “Rise of the Robots”, by Martin Ford, to my Books That I Recommend tab. Mr. Ford is a technology entrepreneur and a Futurist. As I begin this post, there are two points that I should make: 1. The terms Robots or Technology both include Robots, Algorithm-reading machines, and other forms of Automation; 2. Moore’s Law, an off-handed comment in 1965, which predicted that technology will double in both speed and capacity every couple of years, has been relevant ever since. That means that speed and capacity grow exponentially!
Whatever happened to secretaries and office pools, or afternoon newspapers? Why do some old downtown bank branches have many more teller windows than are ever opened? Your desktop word processor made clerical workers unnecessary, and who needs the afternoon newspaper when CNN, and the rest of the 24/7 news cycle is more up-to-date? And, many teller positions became unnecessary, once customers began to use ATMs and on-line banking from their home.
Consider IBM’s Watson Computer that beat Chess Grand Champion Gary Kasparov, and then went-on to beat Ken Jennings, the All-Time Unbeatable Jeopardy Champion—twice. By 2013, Watson—now twice as fast—has been assisting the Cleveland Clinic and University of Texas, MD Anderson Cancer Clinic diagnose problems and refine patient cancer treatment plans. Watson can sift through the 9,000 global medical journals, building its resource database, at light speed. No group of physicians can match that!
So far, robotics is only considered a threat by those in the industrial sector, where different versions install car doors, lift heavy aircraft engines into place, and apply paint to a varied range of home appliances. Robots are best-aligned with routine jobs, and are often regarded as potential threats to low-end jobs such as monotonous warehouse or assembly lines jobs. But, they have mastered various high-end jobs, as well.
Algorithm-reading machines have demonstrated that they can sort through voluminous boxes of documents, weeding-out those that will be relevant to coming court cases, faster than any junior attorney, and more cheaply. Radiologists too might also feel the threat since computers can read charts just as well as them, and they don’t sleep or ask for a salary. Writing newspaper articles are already among algorithm-reading machines’ everyday jobs, while composing symphonies are still in the test stages.
Back in early 19th Century England, the Luddites rebelled against the outsourcing of weaving to India; however, in time, these workers found employment in other occupations. This time, jobs at all levels—even burger flippers—are slowly being replace by robots, and in multiple industries.
We often think of Amazon as a retail corporation, which has been causing many retail companies to fold; but, it is also the largest player in cloud computing, and it has a robotics companies that sells its products globally.
Initially, many people thought that some people would still be able to work with, and “supervise”, the robots. The article (at bottom) describes a woman who is currently doing that at Amazon; however, she realizes that she is actually teaching a robot to do her warehouse job!
In the book, Mr. Ford draws from his own technology background, history and very sound economics. Over time, as more and more businesses automate, eventually they reverse the outsourcing to lower pay-scale countries, bringing the work back. Basically, many robots work more cheaply than overseas low pay-scale workers!
Many Americans have insufficient retirement funds set aside, and much of credit had been tapped-out in The Great Recession (4Q07-1Q09). As unemployment increases, college graduates and middle-income employees displace minimum-wage workers. Also, if banks continue to make bad loans, there could be anther banking crisis.
China cannot become the global economic locomotive, since its economy is 65% based on export. But, to where? As the number of workers who are unemployed, or underemployed increases, there will be few consumers left to buy anything other than the bare necessities. Benevolent business owners who refuse to automate, and keep their current labor forces, they will lose business to the competition, which can undercut them on price. But even there, without middle-income consumers, who will businesses sell their products to?
Mr. Ford does offer some possible solutions, such as a Guaranteed Income Credit; however, they will take a cooperative bipartisan Congress, and a rational President, to pass any such legislation into law. Customer-interface businesses, such as plumbers, electricians, and roofers, would be the last to automate. The most vacant professional positions are nurses, since they provide one-on-one patient care. But, even these business and occupations cannot prosper in a vacuum!
Now, none of this is going to occur this year, or next, but like ATMs and desktop computers, the range of robots will infiltrate the workforce gradually. So, if you are currently employed, begin to separate yourself from the pack. Get your credit straightened out, and build that retirement fund. And, as I wrote in my last post, add some focus on Technology and Health Care in any investment funds that you might have.
Consider picking-up Rise of the Robots at your Library, or buy the paperback version. Hopefully, we might see a new day–one of cooperation and common sense–in Congress. There are solutions; but, it would help to have the whole thing sorted out ahead of time