AUTOMATION – The Search for Productivity and Jobs of the future

 

Imagine a world where you have more time for leisure because someone else is doing it for you. Hang on a second... Does that sound right? Are we talking about modern day slavery where we are not slaves to work but rather using some new more productive slaves? I am talking about automation and the future of work. In our search for greater productivity, we are increasingly reliant on automation to do repetitive jobs, using artificial intelligence to do mind boggling analysis of data and enable uses of technology that don’t require human beings.

We are heading back to where it all started. 150 years of industrial revolution transformed cottage industries and agriculture based economies. We are reaching that stage in the developed world where there will be increased peer to peer trading and exchange of goods and services rather than mass employment to produce goods and services. Now is that a good thing or a bad thing?

I have had a few discussions with my friends and contemporaries on this subject. I have always maintained that when all economies of the world are equal or on a level footing then free trade will truly happen because you will exchange good and services rather than a lopsided business transaction. Right now balance of trade is severely imbalanced for all countries in favour of Chinese manufacturing.

Spare a thought for the Danes, Swedes and Swiss. The smaller economies who produce high quality goods that are exported to other countries. Their own markets are small with populations of 2-5 million people. They cannot possibly consume all that they produce but on the other hand they don't make underwear either which they have to import from low cost countries. 

Movement of labour and free trade is complicated. India and China did benefit in last 20 years with the investments coming in from USA and Europe but these Western economies are now suffering because those jobs could have been theirs.

In global manufacturing organizations it’s a constant challenge to balance market demand through designated factories or market allocation strategies. Some factories are not happy because they want the business but they cannot have it because they are too expensive!

A friend of mine countered stating that this was basically arguing in favour of a constraint. Lack of free trade is why economies don't become equal. Why be more productive or competitive when you can artificially create competitiveness by tariffs. It is always survival of the fittest. Free trade forces you to compete with the best in everything. Either we make everyone better or become weaker as a species.

To which I countered “Yes but what do you do with the hungry millions? Or is the best way forward to abolish the concept of money, stock returns, etc.? If there are no such economic pressures can a barter system work that will benefit mankind and society. It's a utopian view I realize but also the free trade view poses its own set of challenges. Theoretically, “survival of the fittest” may sound fine. But when the survival of a human being depends on eating, paying rent or mortgage, education and healthcare, then the argument becomes hard to swallow.

On the other hand one may view the argument as not being theoretical at all. We have created a construct that encourages laziness and mediocrity. If we go back to hunting days then one pretty much dies if one can't hunt. Now we have the option to not hunt all the time but everyone has to hunt. If someone wants to avoid hunting altogether and live off others then it is a problem.

There is soundness in this argument but when human beings were just hunter gatherers the human population on earth was 1% or less of what it is today. The scale of the problem is amplified by the population explosion which has occurred over the last century. This has created a drain on planetary resources.

Truly! Human beings are to blame for the situation we find ourselves in. Another friend chipped in. After all, we eschew paying for traditional newspaper format, instead wanting curated online newspapers, wanting to shop at midnight, rather than meet fellow human beings at stores. We are essentially killing the ecosystem for our children. As he put it “Technology - a method to progress and make it easy for humanity to become Lemmings.”

Another friend who is an academic at Purdue and now a Jefferson fellow working in Washington to help the US administration with its social policies. One of his areas of research is “Design for Human Instinct”. He argues that it will probably be an innovation economy with “innovators” being localized monopolies. We are seeing some trend towards this already.

With the rapid up take of automation you sometimes wonder whether it's innovation of the bored mind. Innovation for the sake of innovation just to find an outlet for creativity is fine but is it really fine when it disrupts the ecosystem we all live in? The taxi drivers who are losing jobs Uber and the irony being that Uber drivers will themselves be out of jobs as Uber moves to driverless cars! Or the radiographers losing jobs to IBM Watson who can do the job of analysing scans, x-rays, etc. to come up with accurate diagnosis. Even Goldman Sachs has replaced a major chunk of its workforce, the highly paid traders, with software algorithms that do stock and commodity trading on exchanges. One has to question whether the pursuit of productivity is simply the pursuit of profits.

 

Industrial powerhouses in the United States and Europe have hitched their wagon to the Industrial Internet of Things (IoT) and Industrial robots citing that automation, connectivity and higher productivity will drive the Fourth Industrial Revolution. Industrial IoT is running on the backbone of work that software vendors, network operators and telecom firms are doing which is great. The sensor in a farm tractor informing the manufacturer that the axle is going to fail at some point in time so be ready to intervene. But this sensor is also the weakest link because it exposes you to security vulnerabilities.

 

As an example, when you get an integrated national electricity grid in the USA it's very easy to bring it down. Ukraine had a massive blackout where Russian hackers switched off 110 circuit breakers in the nation's network and 6 months down the line it's not fully restored. All automated networks have security vulnerabilities. Cybersecurity is the most pressing challenge facing governments and corporations. Such vulnerabilities are created because of the high level of automation and the desire for ever increasing use of technology in our everyday lives to turn on home heating systems, washing machines, coffee makers, etc. remotely from the comfort of our smart phones.

 

Does it not create an unhealthier living lifestyle by discouraging us to get up and do normal and routine chores which we were or are still used to doing? Then in order to get and stay healthy we spend on expensive gym memberships to get fit. This is the start of a downward spiral. The pursuit of growth touches all aspects of our lives: jobs, health and well-being, lifestyles, social welfare and plenty others.

 If we commit to act with good intentions and concern ourselves with the welfare of ourselves, family, friends and general humanity then we are not competing to outdo one another. We are instead growing together. It's not a communist or socialist principle but just the principle of equality. All men are created equal. So why not strive to ensure this equality and pursue social and technological development holistically that ensures a sustainable future for mankind.