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The future of work in the Robot economy

50 years ago, author Isaac Asimov prophesized about the future: “What will the World’s Fair of 2014 be like?” he wrote in the New York Times. “I don’t know, but I can guess.”

His essay forecast everything from self-driving cars:

“Much effort will be put into the designing of vehicles with ‘Robot-brains’”

To Keurig machines:

“Kitchen units will be devised that will prepare ‘automeals,’ heating water and converting it to coffee.”

To photochromic lenses:

“The degree of opacity of the glass may even be made to alter automatically in accordance with the intensity of the light falling upon it.”

But Asimov’s most impressive prophecy had less to do with gadgets than perceiving what that progress would mean for society.

”The world of A.D. 2014 will have few routine jobs that cannot be done better by some machine than by any human being,” he wrote. Later, he added, ”The lucky few who can be involved in creative work of any sort will be the true elite of mankind, for they alone will do more than serve a machine.”

A proliferation of new books, scientific studies, newspaper and journal articles are informing us that it was advances in technology and automation that have contributed to the extended period of unemployment that continues in the Great Recession. They tell us that robots will take our jobs, with headlines such as: “How Technology is Destroying Jobs[i]“Will Robots Steal Your Job?  You’re highly educated. You make a lot of money. You should still be afraid[ii].” We read that: “Factories have replaced millions of workers with machines.[iii]

Automation and other productivity improvements are expected to have eliminated 2.2 million business-services jobs in the United States and Europe from 2006 to 2016, at a rate of about 200,000 jobs annually, according to the Hackett Group, a Miami-based consultancy.

The Economist magazine calls this the “Third Industrial Revolution[iv].” I call it the Robot Economy, one that millions can and should benefit from and thereby avoid being displaced with what the brilliant Joseph Schumpeter termed ‘the inevitable creative destruction‘ that will lead us out of the great recession.

Over the last 20 years there has been incredible advances in automation. Windows 3.1 was released between 1992 and 1994, the first viable desktop publishing program which catapulted more and more individuals and businesses to begin using computers. In 1993 the Internet was in its infancy, used mainly by some government department and universities – it is only in the last 10 years that internet communication has taken off and streamlined many business processes; just look at banking and airline/travel reservations. It is as recent as 2009 that we began to see the widespread use of smartphones. Manufacturers assembly lines have largely replaced people with machines.

In short technology has advanced at a vast pace and the advantages technology has brought to automating processes and improving daily tasks within homes and businesses has had a significant impact on reshaping the workplace – eliminating many jobs, whilst creating new ones.

It’s not just that the old economy, built on factory work and mid-level office jobs, has stagnated. It’s that the nature of work itself is changing, largely because of the increasing power of intelligent machines and new evolutionary companies, such as Google, Tesla and Amazon and bell-weather IBM with their Watson artificial intelligence platform.

We may all immediately think of machines and automation as common features in factories, but also consider the insurance sector, in the UK alone some 75% of car insurance is now purchased online, just one example of a multi billion dollar industry that has considerably automated its sales reach and in so doing eliminated the job of the door-to-door friendly neighborhood insurance salesman.

Smart software is transforming almost everything about work, and ushering in an era of a new meritocracy. It makes workers redundant, by doing their work for them. It makes work more unforgiving, by tracking our mistakes. And it creates an entirely new class of workers: people who know how to manage and interpret computer systems, and whose work, instead of competing with the software, augments and extends it. Over the next several decades wages for that new class of workers will grow rapidly, while the rest will be left behind.

A recent scientific study indicated that people with ‘numeracy’ skills are likely to fair better in the workplace than those with literacy skills. On average people with 1 basis point more in numeracy skills earn 18% more than those with literacy skills. Clearly numeracy skills are essential for people programming the algorithms that are driving the robot economy through software.  I’ll write more about this study in the coming weeks as I am not so convinced and creative types with marketing and psychology skills will be much in demand as Professor Tyler Cowen has written in his book Average is Over.

Finally back to Asimov, who also wrote in his essay Whatever you Wish: “It may be that machines will do the work that makes life possible and that human beings will do all the other things that make life pleasant and worthwhile.

Will we have and want more leisure time? Having meaningful work that stimulates and challenges the mind is something I certainly I hope to continue to do – isn’t that something most of us want?

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