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In 1812 the British government created an Act of Parliament which made the destruction of mechanized looms – or knitting machines – a capital felony and hence a crime punishable by death. The Act was implemented as a result of so called Luddite attacks on machines.
It should be noted that in many cases the so called Luddites were not raging against the machines taking jobs, but against the employers who failed to provide them with a ‘living wage.’
According to the esteemed historian Eric Hobsbawm, the Luddites had: “no special hostility to machines as such,” their actions were in fact, “a normal means of putting pressure on employers.” Hobsbawm wrote: “Such misconceptions are, I think, due to the persistence of views about the introduction of machinery elaborated in the early nineteenth century.” Adding:
This sort of wrecking was a traditional and established part of industrial conflict in the period of the domestic and manufacturing system, and the early stages of factory and mine. It was directed not only against machines, but also against raw material, finished goods and even the private property of employers, depending on what sort of damage these were most sensitive to. Thus in three months of agitation in 1802 the Wiltshire shearmen burned hay-ricks, barns and kennels of unpopular clothiers, cut down their trees and destroyed loads of cloth, as well as attacking and destroying their mills.
Essentially Luddites were the early trade unions and not raging specifically against the machines but seeking a ‘fair wage’ for the employees by rioting and causing damage to business owners’ property by any means to press their case.
The misconceptions of the actions of the Luddites led to poor legislation and policy in the United Kingdom.
Job security requires skills only Merlin possesses
In 2013, researchers Carl Frey and Michael Osborne of the Oxford Martin School announced that 47 percent of U S jobs were at risk of computerization:
According to our estimates around 47 percent of total US employment is in the high risk category. We refer to these as jobs at risk – i.e. jobs we expect could be automated relatively soon, perhaps over the next decade or two.
In 2014 Deloitte asked them to carry out similar research in the UK, where it was stated Frey and Osborne: “estimate that on average, 35 per cent of current jobs in the UK are at high risk over the next ten to twenty years.”
Frey and Osborne’s papers have led to a deluge of bleak headlines, such as Death of the Accountant and Auditor; Advances in artificial intelligence could lead to mass unemployment, warn experts; and whilst we are on this theme maybe the most embellished article and headline of all: Technology f*cked us all: The anxiety driving Donald Trump and Bernie Sanders is really about machines taking our jobs. The pessimistic view associated with Frey and Osborne’s paper has even led to claims that we may be headed for another Engels’ Pause: a period of stagnant living standards and higher unemployment in the face of rapid technological change.
I am worried by the seemingly incurable pessimism caused by these headlines, which are also instigating governments to champion or consider policies that may not be in the long term best interests of the population they serve.
The headlines scream that if you want to make your job ‘non-susceptible’ to automation then you should make sure it has the type of skills that only Merlin possesses
It is important to realize that the methodology in the Frey and Osborne papers have never been validated with any actual evidence. Anyone with five minutes to spare, a Maths GCSE, and a modicum of common sense could pick flaws in the selection of types of jobs shown to be at high risk of being taken over by a computer algorithm.
Nevertheless, people, including policy makers, suspend their critical judgment and believe the headlines that robots are set to become a Hobbesian nightmare of breathtaking scope.
But if we look beyond the headlines and read the Frey and Osborne paper we find the authors are not stating ‘robots’ WILL take half of all jobs but computerization ‘could’ displace people from the types of jobs they have highlighted. In fact one of the authors, Carl Benedikt Frey, recently wrote in March 2016:
Although we cannot exclude the possibility that technology may reduce the overall demand for jobs in the future, this is seemingly not an immediate concern.
Meanwhile his co-author Michael Osborne has gone as far as saying:
I think a lot of the risk to professions has been overhyped.
Frey and Osborne do a good job surveying a certain type of literature on the suggested improvements being made within robotic, machine learning, artificial intelligence, etc. Although this research tends to rely too much on sources such as the International Federation of Robotics, an industry association with, in my opinion little impartiality and other publicity afforded to various robots and A.I. providers. They provide very little actual citation of work happening within the labs of developers, nor do they analyze the capabilities of current robots in any great degree through discussions with users of these robots, rather referring to the reported capabilities (or expected capabilities) of Baxter the co-bot by Rethink Robotics with a nominal number in service. They also use research that estimates that “the market for personal and household service robots is already growing by about 20 percent annually.” Which is more or less Roomba the automated vacuum cleaner, that to the best of my knowledge has not displaced any Ukrainian housecleaners in Poland!
Evidence of any actual job displacement by the current types of robotics and computerization illustrated by the authors is not shown. What the authors are doing is predicting a demise of jobs based on their research of the available literature! In fact the authors state in the paper:
We speculate about technology that is in only the early stages of development.
Nevertheless, despite the ‘speculation,’ they do make the bold claim:
In the first wave, we find that most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations, are likely to be substituted by computer automation.
So unlikely, so unimaginable
Which jobs are not at risk of automation according to Frey & Osborne?
Occupations that involve complex perception and manipulation tasks, creative intelligence tasks, and social intelligence tasks are unlikely to be substituted by computer capital over the next decade or two.
These are what the authors terms non-susceptible task characteristics.
A sub element of manipulation is manual dexterity. An indication of the level of “Manual Dexterity” computer-controlled equipment would require to perform a specific occupation. Low (level) manual dexterity corresponds to “Screw a light bulb into a light socket”; medium (level) is exemplified by “Pack oranges in crates as quickly as possible”; high (level) is described as “Perform open-heart surgery with surgical instruments”.
It is thus obvious in Frey and Osborne’s thesis that jobs at risk of automation can be summed up as follows:
The probability of an occupation being automated can thus be described as a function of these task characteristics. As suggested by Figure I, the low degree of social intelligence required by a dishwasher makes this occupation more susceptible to computerisation than a public relation specialist, for example. We proceed to examining the susceptibility of jobs to computerisation as a function of the above described non-susceptible task characteristics.
Arriving at 47% of jobs being highly susceptible to automation
The authors relied on O∗NET, an online service developed for the US Department of Labor. O∗NET defines the key features of an occupation as a standardised and measurable set of variables. It also provides open-ended descriptions of specific tasks to each occupation.
They then asked a specific question:
Can the tasks of this job be sufficiently specified, conditional on the availability of big data, to be performed by state of the art computer-controlled equipment?
The authors further identified nine variables that describe the attributes of perception and manipulation, creativity, and social intelligence and which are required to perform the attributes. These are shown in Table 1 from the authors’ paper. They then focused on O∗NET’s description of Tasks.
It should be Work Activity and Skills not Tasks
Time and time again as I look at the types of jobs Frey and Osborne say are at high and medium risk of being done by automation I can’t help but question – is it because they specifically looked at O∗NET data with respect to Tasks and not the essential element that portrays Work Activity and Skills?
Table 1 from Frey and Osborne.
Frey and Osborne indicate that their algorithm predicts that most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations, are at risk of automation within ten to twenty years,
Much of their argument about transportation employees circulates around the advent of driverless cars. We are much closer to an understanding of when driverless cars will be available to the ‘general public’ and it certainly seems that they will not be the main mode of transport in the next 3 decades if current developments and legislation is anything to go by. I do believe that we will see more semi-autonomous trucks on the roads in the coming decade, but I do not see that they will be without a human in the cab for sometime in the future. There are just too many infrastructure problems to overcome, let alone the technical obstacles.
Sports referees, Watch Repairers, Models and Manicurists jobs to be automated
Drill into the report and look at the types of jobs that they say have the highest probability of being replaced by automation and we find all sorts of jobs even the most pessimistic luddite will find hard to accept.
One job at the highest risk of automation, using Frey and Osborne’s methodology is that of Watch Repairer. According to O∗NET statistics there are 3,000 watch repairers in the United States. Now I may accept jobs of watch repairers will dwindle as sales of watches falls due to the fact nearly everybody looks at their smart phone for the time, but not that watches will be repaired by robots! If sales of watches are dwindling why invest the time and money building a robot to repair watches? In fact I suspect that Watch Repairers will become even more of a specialized job as sales of watches focus on the high value watch. I do not expect Watch Repairers will be replaced because an automated machine can repair the watch.
Another job that the authors state is at high risk of automation is Manicurists and Pedicurists – surely that requires a high level of dexterity, precision and social skill?
They also predict the days of Animal Breeders are over (is that because we will all have pet robots?), Gaming Dealers – not social at all!, Real Estate Brokers – presumably robots will arrange to show us around prospective houses. Maybe many people’s favorite choice but not likely any time soon – Umpires, Referees, and Other Sports Officials – will be automated.
Perhaps the one I most flinch at which Frey and Osborne’s algorithm predicts is at high risk of automation is Models.
Look at the tasks O∗NET provides as key for Models.
- Pose for artists and photographers.
- Gather information from agents concerning the pay, dates, times, provisions, and lengths of jobs.
- Follow strict routines of diet, sleep, and exercise to maintain appearance.
- Record rates of pay and durations of jobs on vouchers.
- Report job completions to agencies and obtain information about future appointments.
Now look at the Work Activity O∗NET provides.
- Establishing and Maintaining Interpersonal Relationships — Developing constructive and cooperative working relationships with others, and maintaining them over time.
- Performing General Physical Activities — Performing physical activities that require considerable use of your arms and legs and moving your whole body, such as climbing, lifting, balancing, walking, stooping, and handling of materials.
- Thinking Creatively — Developing, designing, or creating new applications, ideas, relationships, systems, or products, including artistic contributions.
Social Perceptiveness — Being aware of others’ reactions and understanding why they react as they do.
Surely these Work Activities and Skills are elements that fit into Frey and Osborne’s criteria for jobs that will not be automated. I have repeated detailed analysis of over 90 of the occupations that Frey and Osborne indicate are at high and medium risk of automation and each time I question the judgment of the authors.
Policy makers are well advised to do their own analysis before using the Frey and Osborne paper to pursue policies that may not be in the best interest of their constituents.
One final word from the Frey and Osborne which is often overlooked in the hype associated with the paper:
We acknowledge that it is by no means certain that a job is computerisable given our labelling.
 The Destruction of Stocking Frames, etc. Act 1812 (https://en.wikipedia.org/wiki/Destruction_of_Stocking_Frames,_etc._Act_1812)
 Eric Hobsbawm, Machine Breakers (http://libcom.org/history/machine-breakers-eric-hobsbawm)
 Deloitte London Futures: Agiletown: the relentless march of technology and London’s response (http://www2.deloitte.com/uk/en/pages/growth/articles/agiletown-the-relentless-march-of-technology-and-londons-response.html Last accessed 11th April 2016)
 Engel`s Pause: A Pessimist`s Guide to the British Industrial Revolution. Robert C. Allen, April 2007 (http://www.economics.ox.ac.uk/materials/working_papers/paper315.pdf Last accessed 18th April 2016)
 Technology at work: How the digital revolution is reshaping the global workforce. Carl Benedikt Frey, Ebrahim Rahbari 25 March 2016 (http://www.voxeu.org/article/how-digital-revolution-reshaping-global-workforce Last accessed 11th April 2016)
 Robots are leaving the factory floor and heading for your desk – and your job, The Guardian Zoe Corbyn 9th February 2015 (https://www.theguardian.com/technology/2015/feb/09/robots-manual-jobs-now-people-skills-take-over-your-job Last accessed 11th April 2016)
Main paper cited – The Future of Employment: How susceptible are jobs to computerisation? Carl Benedikt Frey and Michael A. Osborne. September 17, 2013 (http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf)
- The Phenomenology of Self-Driving Cars — why I imagine driverless cars are going to hit a much bigger obstacle than most. (Next New Deal – The Roosevelt Institute, H/T @RobertWent)
- Robots that understand — DeepMind, the UK artificial intelligence group purchased by Google earlier this year, has revealed plans to create a broad alliance with the University of Oxford after acquiring two companies spun out of computer science projects at the elite academic institution. According to the Financial Times one of those companies: “is developing systems capable of the visual recognition of objects in the real word. This means, for example, giving robots three-dimensional awareness that can allow them to understand how a cup sits on a table.”
- CyPhy Works’ New Drone Fits in Your Pocket, Flies for Two Hours. Anybody who’s ever flown a rotary wing drone will look at the stats of CyPhy Works’ new Pocket Flyer drone and be amazed. It fits in your pocket and weights a mere 80 grams. It’ll fly continuously for two hours or more, sending back high quality HD video the entire time. What’s the catch? There isn’t one, except for the clever thing that grants all of CyPhy’s UAVs their special powers: a microfilament tether that unspools the drone and keeps it constantly connected to communications and power. (I’m a huge admirer of CyPhyWorks)
- The first example of a robot automating surgical tasks involving soft tissue. “There are no bad robots, there are just bad surgeons.” New Research Center Aims to Develop Second Generation of Surgical Robots.
- Robot project envisions factories where more people want to work. Rather than taking jobs, robots will one day soon join people on the factory floor, as co-workers and collaborators. That’s the vision of a EUR 6.5 million project led by Stockholm’s KTH Royal Institute of Technology. (PHYS.org)
In 1850 the French economist Frederic Bastiat published an essay titled: That Which is Seen, and That Which is Not Seen. The essay is most famous for introducing the concept of ‘opportunity cost,’ the limits, alternatives and choices – to obtain more of one thing, we give-up the opportunity of getting the next ‘best thing,’ or because we “can’t have it all,” we must decide what we will have and what we must forgo. That sacrifice is the opportunity cost of the choice.
Many argue that opportunity cost is applied in business, once the cost of marginal labor rises too high, it makes more sense to replace minimum wage jobs with robots or other automated technology – leading to increased production and profits.
Of course this is not a new phenomenon. In his 1850 essay, Bastiat wrote:
“A curse on machines! Every year, their increasing power devotes millions of workmen to pauperism, by depriving them of work, and therefore of wages and bread. A curse on machines!
This is the cry which is raised by vulgar prejudice, and echoed in the journals… machinery must injure labour. This is not the case.”
It is a cry echoed in media today, just as it was 164 years ago – 164 years during which humans have seen the greatest advancement of technological progress, resulting in more luxury goods, improved health, longer life expectancy, better housing, and sanitary, clean water, electricity, instant communication around the globe via the Internet for free, mobile phones, planes and automobiles, heart transplants, and so on. Ninety nine percent of the poorest people in the ‘developed world’ have amenities that the wealthiest people of Bastiat ‘s time could not imagine.
Machinery does reduce some labor, but as Bastiat points out new labor from new industries is quickly created. The very industry, robotics, that is said to be eliminating jobs is in fact creating hundreds of thousands of jobs.
According to the European Union Commission, by 2020, service robotics could reach a market volume of more than 60 billion euros per year, and are forecasting 240,000 new jobs in the EU alone, backed by an investment of Euro 2.8 billion during this period.
The International Federation of Robotics has reported that Robotics will be a major driver for global job creation creating more than one million jobs by 2016.
Many of these new jobs will come from investments into the Robotics sector which is currently experiencing a major boost.
Startup Robotic companies like Jibo blasted through their crowd funding campaign raising $1,270,193 in a matter of days against a goal of $100,000. Much of the investment will allow Jibo to recruit new staff as the company delivers its artificially intelligent robot helper.
Another robotics startup, Airware the drone manufacturer raised an additional $25 million series B round on top of the $12.2 million it raised in it’s A series round. The company said it had raised the new funding: “to build out its staff.”
The South Korean government is mooted to invest $2.5 billion US dollars by the end of 2018 in joint projects with robotics companies, creating more jobs and targeting more than $6 billion US dollars in annual sales.
Japan is building a huge drone fleet. The country will invest ¥3 billion (approximately $372 million) in the coming decade to drastically expand its military unmanned aerial vehicle (UAV) program.
An estimated $6.4 billion is currently being spent each year on developing drone technology around the world, according to a report published earlier this month by the Teal Group Corp.
Whilst jobs will disappear, there are literally hundreds of companies and governments investing tens of billions of dollars in drones and robotics and in doing so creating a significant number of new jobs.
The current generation of engineers and roboticists are making science fiction stories of magical realism come true and creating millions of jobs in the process. As Bastiat put it: “to curse machines is to curse the human mind.”
Update – see also GE Reports on the Cyborg Workplace.
When the first steam powered cars (or locomotives as they were then called) first took to the roads in the early 1860’s it was feared that engines and their trailers might endanger the safety of the public, cause fatal accidents, block narrow lanes, and disturb the locals by operating at night. Many complained the cars were scaring the horses meanwhile the farmers were shooting the cars!
To allay the concerns, restrictions and speed limits were imposed by the Locomotive Act of 1865 (more popularly known as the “Red Flag Act“) which required all road locomotives, which included automobiles, to travel at a maximum of 4 mph (6.4 km/h) in the country and 2 mph (3.2 km/h) in the city – as well as requiring a man carrying a red flag or lantern to walk in front of road vehicles. The Act also included such matters as “Damage caused by locomotives to bridges to be made good by the vehicle owners.” However it was soon discovered that the steam carriages’ brakes and their wide tyres caused less damage to the roads than horse-drawn carriages because of the absence of horses’ hooves striking the road and wheels which did not lock and drag as they did on horse drawn carriages.
In the latter part of the 1800’s the British Motor Syndicate began a public relations campaign to lobby for the repeal of the Locomotive Act, which was declared the main obstacle to wider adoption of the car in Britain. The Act of 1865 was repealed in 1896.
Almost 120 years later we stand at the precipice of a new dawn in the age of the automobile – self-driving cars. Everything, from how we move goods to how we move ourselves around, is ripe for change.
Self-driving cars will require legislators to make new amendments to the current Highways Acts in place. There is already considerable debate surrounding the legal issues of driverless cars, the ethical concerns and questions over the liability of who to sue when a driverless car is involved in an accident.
Nevertheless the case for self-driving cars is considerable, the death toll (from motor accidents) is increasing worldwide with 1.3 million fatalities and 50 million injuries every year globally and around 93% of these accidents are caused by human error, and cost a staggering US$ 871 billion in the United States alone, according to the National Transportation Safety Board (NTSB) – self-driving cars will dramatically reduce accidents significantly. Autonomous cars will also reduce the burden on law enforcement, may also make streets safer and less congested, and allow those with disability greater movement – leading to a cleaner environment and improved quality of life.
Self-Driving Cars — Not if, but when
As well as the technical obstacles that are quickly being eliminated by manufacturers of self-driving cars, there are a few potential barriers that will delay the deployment or growth of self-driving cars, just as the ‘Red-Flag Act’ did in the 19th Century.
One such obstacle is Insurance Liability.
Lloyd’s of London, the insurance underwriter, has recently produced a report about how autonomous car technology will affect the insurance industry.
According to the report, insurance companies will have to create new methodologies on how they measure risk and charge motor insurance premiums:
There could be “significant changes in motor insurance: if accidents reduce in frequency, claims will also decrease, leading to lower premiums and, in turn, tighter profit margins for insurers.”
The report also highlights declining car ownership as potentially reducing the total number of insurance premiums:
Car ownership could decline in favor of a renting model and taxi companies could become owners of rentable car fleets, leading to company-wide policies.
With respect to insurance concerns Lloyds emphasized the problems with transferring risk from the driver to the machine:
With less reliance on a human driver’s input, however, increased risk would be associated with the car technology itself. Computers can do many things that a human driver cannot: they can see in fog and the dark, and are not susceptible to fatigue or distraction. However, they can also fail, and systems are only as good as their designers and programmers. With an increased complexity of hardware and software used in cars, there will also be more that can go wrong.
A new form of driving tests and licensing will be required:
By gradually transferring responsibility from the driver to the car, there is a risk that a driver could misjudge the responsibility they currently have… To mitigate this risk it is important that drivers are well-educated about the limitations of autonomous functions, and how they can retake control of the car when it is necessary.
When we rely on the car we may ‘switch-off’ and not be attentive to what is happening in the surrounding environment when it seems that their input is not needed.
If drivers are expected by law to supervise an autonomously operating car, they may find it difficult to remain focused on this task if they feel able to trust the car.
However the report does acknowledge the higher safety standards of autonomous vehicles:
The advent of autonomous cars could revolutionize the world of motor insurance. Autonomous cars could potentially lead to a substantial reduction in motor insurance claims.
Some might argue that if cars really do become crashless, there may not even be a need for motor insurance.
In many ways driverless cars may make assessments easier because it would be possible to see data such as what speeds the vehicles were travelling at.
An accident caused by autonomous technology, would need software and hardware analysis expertise in order to understand how and why it occurred. As sensors and computers become more commonplace in cars, and some driving responsibility is devolved to the car, an increase in telematics-based policies could be an option. Premiums could be better matched to exposure rather than based on proxies, and in the event of accidents, the car’s ‘blackbox’ could be examined. Whereas at present insurers using telematics devices incur the cost of their fitting, in the future the data may already be collected, making telematics a more viable option.
Whilst some analysts indicate self-driving cars will be on our roads in greater numbers with 3 to 7 years, it may be some time before the new technology earns the public’s trust. Lloyds also commissioned a Google Consumer Survey according to the survey, which was taken by 2,016 people in the UK, 50.4% male, 49.6% female.
People are uncomfortable placing their trust in a computer and they like the process of driving too much to give it up.
Automated driving will become progressively more standard in the near future, but it will require the development of high standard autonomous navigation systems and adequate safety standards, along with the implementation of new legal and licensing procedures. With a shift towards autonomous technology and away from human operators, the landscape of insurance, especially motor insurance, may change dramatically.
Picture source: 1st picture – Red Flag Act and 2nd picture Lloyds Report
In his book The Moral Consequences of Economic Growth, Benjamin M. Friedman posits that steady economic growth: “fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy.” Friedman’s hypothesis is defended with an impressive range of evidence from disciplines including economic and political history and other relevant sources. He also highlights our understanding of the relationship between economic growth and our willingness to cooperate by drawing on literature in psychology and especially behavioral economics and he emphasizes that economic growth transforms society into a “cooperative venture for mutual advantage.”
But when economic growth stagnates society has less tolerance and social unrest coupled with people less willing to cooperate and more focused on satisfying their own basic needs – a me, myself and I world. Some authors have predicted we are already in a Great Stagnation, others indicate that economic growth, in ‘advanced economies’ will continue at a nominal rate of growth of circa 1 to 2 per cent for many years, possibly decades.
The big question is – are we likely to see the growth rates of the 20th and early 21st century again? Even though much of it was built on a house of debt!
The economic boom after the Second World War was predominately built on two sectors: housing and automobiles – which collectively accounted for 40 percent of the high growth rates. In more recent years we can see the same sectors responsible for the high growth rates in emerging markets such as Dubai, Abu-Dhabi and other Emirates and in Europe countries such as Poland which emerged from Communism some 25 years ago, a housing boom and flourishing car market quickly followed. The same is happening today in China.
Flourishing housing and automobile markets have many spin-offs: fuel, highways, transportation, associated household equipment, mechanical parts, banking, finance, etc. As history shows, housing and automobile markets do slow and the consequences are now being felt across the developed world.
Without such markets how will we get the levels of employment near to 95 or 100 percent?
The facts are; new flat screen TV’s, smartphones, tablet computers, laptops, mobile Apps, etc. will not generate anywhere near the level of economic activity that is required to grow the economy and put people back to work.
Historically, technological innovation has provided the momentum for long-term economic expansion. The area with the greatest potential for technological innovation today is advanced Robotics and the associated technology of Artificial Intelligence. But let’s not kid ourselves, there is no point in developing these technologies unless they serve a significant purpose – and the overall purpose for robots and A.I., especially within the workplace, is greater efficiencies and reduced costs. Much of these reduced costs will, in the long run, come from reduced headcount – people.
I am a strong proponent of the advances in robotics. Our lives can be greatly enhanced by exoskeletons, driverless cars, artificial assistants and so on. In the short term these sectors will create more jobs, but over the next two decades the full economic benefits of investing in robots will mean one thing – less people working.
Government investment in infrastructures, green energy and other advanced technologies will of course help spur the economy. But these will have to be paid for from somewhere and with Government debts at record levels few countries can sustain the levels of investment required to make meaningful long-term investments.
This is where I believe a new welfare state is increasingly becoming one of the only sensible options. Many are calling for a ‘living wage’ or Basic income Guarantee. Seattle in the United States and Switzerland, where approximately 45% supported such a motion in a recent referendum, could prove to be very informative test cases. The former US Secretary of Labor Robert Reich has said:
We’ve got to seriously think about how we widen the circle of prosperity, how we get shared prosperity. Otherwise, who’s going to be the customer? And a minimal guarantee with regard to income, it seems to me as almost inevitable in terms the direction that the structural changes of our economy are taking us in.
With excessive household debt, low savings, wage stagnation, almost 2 in 5 on the poverty line in advanced economies it will take something of the order of a basic income guarantee to spur economic growth or we can be sure to witness Gartner’s prediction of mass social unrest in the coming decade.
On March 28, 1955, Time magazine reported on a new generation of machinery called computers. The cover featured a drawing of IBM’s Thomas Watson, Jr. in front of a cartoonish robot drawn by Boris Artzybasheff, over a headline that read, “Clink. Clank. Think.” The story marveled at a computer built by IBM, working inside a Monsanto office building. “To IBM, it was the Model 702 Electronic Data Processing Machine,” the story reported. “To awed visitors, it was simply ‘the giant brain.’”
Time equated the IBM computer with the advance of civilization. “The prospects for mankind are truly dazzling,” the article said. “Automation of industry will mean new reaches of leisure, new wealth, new dignity for the laboring man.”
The Time magazine article has echoes of Keynes prediction from his 1930 essay Economic Possibilities for our Grandchildren, that the working week would be drastically cut, to perhaps 15 hours a week, with people choosing to have far more leisure as their material needs were satisfied. In his essay Keynes may have been looking towards 2030 when he wrote: “What can we reasonably expect the level of our economic life to be a hundred years hence?”
Even though his essay was written in the second year of the Great Depression Keynes highlighted the advances in technology that contributed to the impressive economic growth that the West attained since the industrial revolution:
From the sixteenth century, with a cumulative crescendo after the eighteenth, the great age of science and technical inventions began, which since the beginning of the nineteenth century has been in full flood – coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous and familiar to catalogue.
Keynes then gave a warning of ‘a new disease in the years to come, namely, technological unemployment.’
This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.
Major current debate concerns whether new technologies are creating ‘technological unemployment’ whereby many workers are displaced by new technologies and find it difficult to become employed again.
Much of this debate points to robots as the main culprit of displacing people from the workplace. Professor Robert Gordon of Northwestern University, in a Financial Times article, invites us to: “think of every employee you’ve had contact with in the last two or three days, and think, is that person going to be replaced by a robot in the next 20 years?”
Thomas Watson Junior believed the introduction of machines into the workplace would not lead us (the average workers) into technological unemployment but provide more wealth and more leisure time and also free us up for more creative activities. From the1955 Time magazine article:
President Watson hopes to mechanize hundreds of processes which require the drab, repetitive “thought” of everyday business. Thus liberated from grinding routine, man can put his own brain to work on problems requiring a function beyond the capabilities of the machine: creative thought.
This creativity aspect is something author Tyler Cowen emphasizes in his book Average is Over, and venture capitalist Mark Andreesen screams: “Robots will not eat the jobs but will unleash our creativity.”
The fact — automation is driving technological unemployment, jobs are being obliterated. According to the International Labor Organization (ILO) there are 200 million unemployed people worldwide. Many of these, such as millions of professionals that worked in banks, insurance companies, travel agents, retail, and other service industries have been displaced as software automates their jobs.
Robots in, jobs go up
But so far companies that implement robots (a mechanical hardware and software device that incorporates movement/action) are actually adding jobs. Our research shows 76 companies that implemented industrial or factory/warehouse robots actually increased the number of employees by 294,000 over the last 3 years. Amazon famed for the acquisition of Kiva Robotics has in fact added more than 89,000 new staff to its payroll over the last 3 years. The company now employs over 117,000 people, more than four times the 28,300 employees it reported on June 30th 2010. Tesla Motors, manufacturer of electric cars and with one of the most sophisticated robot manufacturing sites has added over 6,000 new jobs.
Hundreds of thousands of new jobs are being created in drone manufacturers, industrial robot makers and other sectors of the robotic arena. The EU recently announced the world’s largest investment in robotics and a target of an additional 240,000 new jobs in the region.
It is highly probable over a million new jobs will be created in the robotics sectors in the coming 5 years. Whilst significantly less than the ILO cited numbers to solve the world’s unemployment problems, nevertheless it is a step forward – when others are screaming that robots ‘ARE’ eating jobs – let’s be realistic, software IS eating jobs; robotics is currently creating jobs.
Whilst I am optimistic about the near future for job creation in the robot sector, in the long run it is also highly probable that robots will displace people from jobs. How this will play out in 2030 is anyone’s guess – it is not too far away so I would suggest asking the same question as Professor Robert Gordon above. I also know robot manufacturers are very aware of the likely societal impact robots can have on jobs. As Melvin Kranzberg said: “Technical developments frequently have environmental, social, and human consequences that go far beyond the immediate purposes of the technical devices and practices themselves.”
It’s better to be prepared than caught out. My advice to young people — now is a good time to join the robot sector.
Update – Business Insider has a nice summary and other pointers on this article – This Settles The ‘Robots Will Take Our Jobs’ Argument Once And For All
European Commission Vice President @NeelieKroesEU, says: “Europe needs to be a producer and not merely a consumer of robots. Robots do much more than replace humans – they often do things humans can’t or won’t do and that improves everything from our quality of life to our safety. Integrating robots into European industry helps us create and keep jobs in Europe.” (SPEECH/14/421)
President of euRobotics Bernd Liepert says: “SPARC will ensure the competitiveness of European robotics industries. Robot-based automation solutions are essential to overcome today’s most pressing societal challenges – from demographic change to mobility to sustainable production“.
Robotics enables companies to continue manufacturing in Europe, where they might otherwise move operations to lower-cost countries. But the potential of robotics goes far beyond the factory: from helping nurses in hospitals to inspecting dangerous power plants and tedious farm work. Autonomous cars and drones are other examples of robots.
The project is launched at the AUTOMATICA 2014 conference in Munich.
SPARC is open to all European companies and research institutions. The partnership launched today is based on a contract signed with euRobotics aisbl on 17 December 2013 (press release).
The first call for proposals related to SPARC are run under the pillar LEIT – Leadership in Enabling and Industrial Technologies of the new EU research and innovation programme Horizon 2020.