When Robots Rule The World

Saturday, February 9, 2013

When robots rule the world

 Technological Unemployment
The so-called jobless recovery, is now showing that automation is  eliminating jobs in non-manufacturing sectors in exponentially increasing numbers. The same artificial intelligence powering Siri offers a glimpse of whats to come., and the effects will be unprecedented. 
Will robots put us all out of work? From Martin Ford's The Lights In The Tunnel to Brynjolfsson and McAfee's Race Against The Machine, the analytic evidence is building, showing that technological unemployment is probably upon us as never before.

These changes will be dramatic and change economic and social paradigms in the coming decades in an unprecedented manner.  As Andrew McAfee likes to state, "We ain't seen nothing yet."

Along with the the off-shoring of manufacturing jobs, developed nations have been accustomed to the economic evolution from manufacturing based jobs to service ones dominating.

Consider the graph above, based on data from the Federal Reserve Bank of St. Louis. It shows manufacturing employment in the United States as a fraction of all employment. As the chart demonstrates, the line heads downward in an almost perfectly straight line beginning in the mid-1950s. The line is not affected by the rise of globalization, after the passage of NAFTA in 1994 or the rise of China or other factors. The line just slopes consistently downward.

What is starting to take hold now though, and is evidenced by the so-called jobless recovery, is that automation is now eliminating jobs in non-manufacturing sectors in exponentially increasing numbers.

Currently in the United States the economy is 3.2 million jobs shy of the previous employment peak of five years ago.  Moreover, it took an average of just 24 months to regain all the jobs lost in the previous nine recessions. However, at the present pace, it will take about 80 months to regain those lost jobs.

Plus, this does not take into account the increases in the number of job seekers over the past five years, which makes the real jobs gap more like 9 million.  With corporate profits rising, the stock markets recovering and productivity levels at record highs, we are clearly seeing an economic outlook unlike anything since the industrial revolution.
The same artificial intelligence powering Siri offers a further glimpse of whats to come.

McAfee says, "When I call my cable company in 10 years, I'll most likely be talking to a robot," he said. "Unless I have a very sharp accent or a very strange problem, I'll have a robot handling my problem. And 10 years from now, I think machines will be mowing golf courses. I think most of those little trucks driving around airports will be autonomous."

"We thought human beings held the high ground in a lot of these areas," McAfee has said. "We looked around and suddenly saw computers doing things they weren't supposed to be good at it ... We're going to see computers, robots doing a lot of jobs that humans are holding today."

Some jobs will be fairly safe at least for the foreseeable future, according to David Autor, an MIT economist. Autor has said that low-skilled and low-paying jobs, such as dog groomers, restaurant wait staff and barbers, should be safe. Those are jobs that would be tough for computers or robots take on.

High-skilled, high-paying jobs, such as high-technology workers and healthcare providers, should also be safe.

The shift is going to come in the middle of the workforce. Mid-level paying jobs requiring mid-levels of education are in danger of being lost to technology. 

Additionally the global effects of the economic paradigm shift are really going to have dramatic effects.  For countries like China, there is going to be a bypass of the manufacturing-to-service sector change that other countries went through in the second half of the twentieth century.  What will the impacts be when developing countries start to loose their manufacturing and fledgling service-based jobs to automation and AI systems too?

In the video below, The Financial Times Alphaville's Cardiff Garcia and Izabella Kaminska discuss how technology is making jobs obsolete at a historically high rate, and how it may be accelerating.

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  2. "Death by Technology" by Dan Thomas