Technology and the Economy of the Future_2 pptx

THE LIGHTS IN THE TUNNEL / 72 CopyrightedMaterial–Paperback/Kindle available @ Amazon chess moves, then why can it not also iterate through every known legal argument since the days when Cicero heldforthintheRomanForum?Wouldthisbea“lesser” formoflegalcreativity?Perhapsitwould.Butwouldthat mattertoourlawyer’semployer? Althoughthepracticalapplicationsofartificialintelli- gencehavesofaremphasizedbruteforcesolutions,itisby nomeanstruethatthisistheonlyapproachbeingtakenin thefield.Averyimportantareaofstudyrevolvesaround theideaofneuralnets,whichareaspecialtypeofcomputer thatisbuiltuponamodelofthehumanbrain.Neuralnets are currently being used in areas such as visual pattern recognition. In the future,we canprobablyexpect some importantadvancesinthisarea,especiallyastheengineers whodesignneuralnetswork morecloselywithscientists whoareuncoveringthesecretsofhowourbrainswork. Onethingthatprobablyjumpsoutatyouaswespeak oflawyersandradiologistsisthatthesepeoplemakealot of money. The average radiologist in the United States makesover$300,000.Infact,wecanreasonablysaythat software jobs (or knowledge worker jobs) are typically highpayingjobs.Thiscreatesaverystrongincentivefor businessestooffshoreand,whenpossible,automatethese jobs.Anotherpointwecanmakeisthatthereisreallyno relationshipbetweenhowmuchtrainingisrequiredfora humanbeing,andhowdifficultitistoautomatethejob. Tobecomealawyeroraradiologistrequiresbothcollege and graduate degrees,butthiswill nothold off automa- tion. It isa relatively simple matter to program accumu- Acceleration / 73 CopyrightedMaterial–Paperback/Kindle available @ Amazon latedknowledgeintoanalgorithmorenteritintoadata- base. Forknowledgeworkers,thereisreallyadoubledose ofbadnews.Notonlyaretheirjobspotentiallyeasierto automate thanother job typesbecause no investment in mechanical equipment is required; but also, the financial incentiveforgettingridofthe jobissignificantlyhigher. Asaresult,wecanexpectthat,inthefuture,automation willfallheavilyonknowledgeworkersandinparticularon highlypaidworkers.Incaseswheretechnologyisnotyet sufficient to automate the job, offshoring is likely to be pursuedasainterimsolution. Given this reality, it may be that the simulation we performedinChapter1wasactuallysomewhatconserva- tive.Lookbackatthetablelistingtraditionaljobsonpage 59. Veryfew of thesepeopleare knowledgeworkers. In our simulation, we assumed that automation would fall evenlyonsomesignificantpercentageoftheaveragelights inthetunnel.Wenowsee,however,thatautomationmay, in fact, arrive in a relatively “top heavy” pattern.It may wellbethatagreatmanyofthebrighterlightsinourtun- nelwillbeamongthefirstimpacted. Whatdoesthismeanforabusinessthatoffersprod- ucts and services in the mass market? Clearly, it implies thatautomationmaybepoisedtosomedayeliminatenot justuntoldmillionsofyourpotentialcustomers—itislike- lytohithardatyourbestcustomers. THE LIGHTS IN THE TUNNEL / 74 CopyrightedMaterial–Paperback/Kindle available @ Amazon Automation, Offshoring and Small Business Wetendtothinkofautomationandoffshoringasprimari- lyimpactingjobsinlargecorporations.Afterall,ittakesa substantial investment to set up a relationship with an overseasoutsourcingfirmorbringinspecializedautoma- tionequipmentorsoftware.In thenearfuture,however, bothofthesepracticesarelikelytobecomeincreasingac- cessibleandinexpensiveforeventhesmallestbusinesses. Thereisasignificanttrendtowardbreakingjobsinto smallerpiecesorspecifictasks—whichcanthenbeeither automatedoroffshored.Thiscapabilityisincreasinglybe- ing offered to small businesses either as pre-packaged softwareorthrougheasytouseonlineinterfacesoverthe Internet.Taxpreparationisoneareawherethisapproach is already widespread. Instead of making a large invest- ment in sophisticated automation software, a small busi- nessownerormanagerwillbeabletovisitawebsiteand then rent access tothe softwareon either a per-houror per-taskbasis.Ithinkitisverypossiblethatthesamewill happen with task-specific offshoring. Competition be- tweenserviceproviderswillquicklyproducelowerprices, easiertouseonlineinterfaces,andawidervarietyofser- vices. Theresultwillberapidpenetrationofthesepractices intobusinessesofallsizes.Aswesawwiththeradiologist and the lawyer, once significant portions of jobs can be automated, the number of workers employed will imme- diatelybegintofall.TheU.S.SmallBusinessAdministra- tion estimates that businesses with fewer than 500 em- ployees have generated from 60-80 percent of all job Acceleration / 75 CopyrightedMaterial–Paperback/Kindle available @ Amazon growth over the past decade. 25  As it becomes easierand cheaper for business owners to employ automation and offshoring,wemaywellfindthatthesepracticeswillbe- comeasignificantdragonAmerica’sprimaryjobcreation engine. “Hardware” Jobs and Robotics A“hardware”jobisajobthatrequiressomeinvestmentin mechanicalorrobotictechnologiesinorderforthejobto be automated. The automation of hardware jobs started long before the computer revolution. Machines used on assemblylines, farm equipment, and heavyearthmoving equipmentarealltechnologiesthathavedisplacedmillions of workers in the past. As history has shown, repetitive motion manufacturing jobs are among the easiest to au- tomate. In fact, as I mentioned, this is how the Luddite movementgotstartedbackin1811.However,themerger of mechanics and computer technology into the field of robotics will almost certainly impact an unprecedented number and types of jobs. Whether a specific hardware job isdifficultoreasytoautomate reallydepends onthe combinationofskillsandmanualdexterityrequired. Foranexampleofajobthatisverydifficulttoauto- mate, let’s consider an auto mechanic. A mechanic ob- viouslyrequiresagreatdealofhand-eyecoordination.He or she has to work on thousands of different parts in a varietyofdifferentengines,ofteninhighlyvariedstatesof repair.Inotherwords,arobotmechanicwouldfacemany visual recognition and manipulation problems similar to theoneswediscussedearlierwiththerobothousekeeper. THE LIGHTS IN THE TUNNEL / 76 CopyrightedMaterial–Paperback/Kindle available @ Amazon In addition, the robot mechanic would require a much higherdegreeofproblemsolvingskillthanthehousekee- per. In fact, this diagnostic skill it not something that couldbesolvedwithsoftwarealonebecauseitextendsto nearlyallthehumansenses.Amechanicmaylistentothe soundanenginemakesorevendiagnoseaproblembased onaspecificsmell. As things stand, we can say that becoming an auto mechanicisprobablyaprettysafechoiceforthetimebe- ing. But, as wesaid with the housekeeper,that doesnot imply the job will be safe forever. Advances in robotic technology will continue relentlessly until many of these problems are solved. However, an even more important factorislikelytobechangesmadetothecarsthemechan- ic is working on. Advancing technology has already im- pactedthewaymechanicswork;computerizeddiagnostic toolsarenowusedtoreadfaultcodesprovidedbymicro- processors embedded in the engine. We can expect that thistrendwillcontinue,andthat,atsomepointinthefu- ture,carsmaywellbedesignedspecificallytobeworked onbyroboticmechanics. Atruckdriverisanotherexampleofajobthatislike- lytobeprotectedforthetimebeing,but,inthelongrun, the reason will probably not be so much technology as socialacceptance.Themilitaryisalreadymakingsubstan- tialinvestmentsinautomatedtrucksthatcouldbeusedon thebattlefield.Thesecouldbecompletelyautonomous,or theymightbeprogrammedtosimplyfollowaleadtruck. Similarly,manycarmanufacturerswillsoonbedeploying collisionavoidancetechnologyincars.Thesesystemswill Acceleration / 77 CopyrightedMaterial–Paperback/Kindle available @ Amazon help drivers avoid mistakes that might lead to accidents; howeverovertimetheycouldevolveintotechnologyca- pableofdrivingthecarautonomously—justasjetairliners nowroutinelyflyandlandwithoutassistance. While the technology forautomated carsand trucks may arrive, it is somewhat difficult to imagine thatmost peoplewouldbeeagertosharetheroadwith50-tondri- verless trucks. A second important issue would likely be thepoweroftheTeamstersunion.Onceagain,however,I have to givemystandard disclaimer: this doesnot mean truckdrivingjobswillalwaysbeprotected. The job types that are likely to be threatened fairly soon byadvancesinroboticsare the jobs thatfit some- wherebetweentheautomechanicandtherepetitivemo- tion assembly line worker. As an example, consider the shelfstockerina supermarket or chain retailstore. This jobrequiresmoreflexibilitythanworkingonanassembly line,butstillfallsfarshortofwhattheautomechanicfac- es. Thelayoutofasupermarketisstandardizedandcould easilybeprogrammedintoacomputer.Theaislesarewide andthefloorsaresmooth;idealterritoryforanindustrial robot.Everyitemhasaspecificplaceontheshelves.Bar codesmakeitasimplemattertoidentifyitems,andspecial location markers could be placed on the shelves: a shelf stocking robot faces few of the visual recognition issues that challenged our housekeeping or auto mechanic ro- bots.Designinga robot that couldmoveinventoryfrom the stock room and place it on shelves is certainly well withintherealmofpossibilityinthenottoodistantfuture. THE LIGHTS IN THE TUNNEL / 78 CopyrightedMaterial–Paperback/Kindle available @ Amazon Needless to say, if a robot can be designed to stock shelves, then it can also be made to unload trucks and movematerialofalltypes. Skepticalthatrobotsmightsomedaybesteppinginto thesejobs?Considerthatasfarbackas2005,CNETNews Blogpublishedanarticleentitled“WhysoNervousabout robots, Wal-Mart?” 26 Thearticlepointedout thatreports hadsurfacedaboutWal-Marttestinginventory-takingro- bots.Thesewouldberobotsprogrammedtonavigatethe aislesatnightandautomaticallytakeacompletestorein- ventory. When the CNET reporter contacted Wal-Mart management, he received anunusually abrupt denialthat Wal-Martwasconsideringusingrobotsinanyway. WecantakeWal-Mart’smanagementatitswordand assumethatit,infact,hasnoplanstouserobots.Inthe long run, however, that won’t matter. At some point, if oneofWal-Mart’scompetitorstriestogainanadvantage by employing robots, then Wal-Mart and every other competingbusinesswillreallyhavenochoicebuttofol- lowsuit.ThepointofthisisnottovilifyWal-Martorany otherbusinessthatmightsomedaychoosetoemployau- tomation.Wehavetoacknowledgethat,inafreemarket economy,everybusinesshastorespondtoitscompetitive environment and employ the best available technologies andprocesses.Ifitdoesnotdoso,itwillnotsurvive. Historyhasshownthatjobautomationveryoftenin- volves pushing a significant portion of the job onto the customer.Automationinthecustomerserviceareaisreal- lyself-service.ThishasbeenthecasewithATMs,automated checkoutaislesandevenself-servegaspumps.In there- Acceleration / 79 CopyrightedMaterial–Paperback/Kindle available @ Amazon cently opened Future Store 27  near Düsseldorf, Germany, in-storeretailsalesandcustomerassistanceisbeingauto- matedviaacell-phoneinterface.Shoppersareabletoget realtimeassistance,whileshopping,throughtheirmobile phones.Theycanalsoscanbarcodesastheyshopand,in thenearfuture,willbeabletopayfortheirpurchasesdi- rectly through their phones—presumably avoiding the checkoutislealtogether. Thespecterofnearfullyautomatedsupermarketsand chainretailstoresiscauseforgenuineconcern.Theseare nowthejobsoflastresort.Thesearethejobsthatworkers displacedfromotherindustriestakebecausethereisnoth- ingbetteravailable.Lookbackatthetableonpage59.We havealreadymentionedthat3.5millioncashiersarepoten- tiallyatrisk.Thetableshowsanother4millionretailsales- personsand2.3millionlaborersandfreight,stockandma- terialmovers,aswellas1.7millionstockclerksandorder fillers.Whatnewjobscouldwepossiblyfindforallthese people? Readanyarticleinthepopularpressaboutthefieldof roboticsanditspotentialfutureimplications,andyouwill almostinvariablyfindasentencepointingoutthat“inthe future, robots will be used to perform tasks which are dangerous for people, or jobs which people don’t really want.” That is surely true, but it implies the somewhat wistful assumptionthatrobots won’t beused injobs that peopledowant.Thatisobviouslyasillyassumption.Ro- bots,andotherformsofautomation,willbeusedinstead THE LIGHTS IN THE TUNNEL / 80 CopyrightedMaterial–Paperback/Kindle available @ Amazon ofpeopleassoonitbecomescosteffectiveandprofitable forbusinessestodoso. *  “Interface” Jobs AthirdtypeofjobiswhatIcallan“interface”job.The people who hold these jobs, toalarge extent, fill inthe crackswhichcurrentlyexist betweenvariousinformation formats and technologies. As an example, consider what happenswhenyouapplyforahomemortgageloan.Ifyou workwithanindependentmortgageagent,heorshewill probablygiveyouapaperapplicationtofillout.Next,you willneedtoretrieveandmakecopiesofyoursupporting documentation: pay stubs, tax returns, bank statements, insurancedocuments,etc. Allofthis documentationwillbeonpaperoritwill befaxedtoyou.Apropertyappraisalwillbedone,andthe reportwillbeforwardedtotheloanagent.Oncetheloan agentcollectseverythingtogether,heorshewillprobably faxit all to thebank, wherealoanofficer will review it. Ultimately,numberssuchasyoursalary,creditrating,and the equity to loan ratio will be plugged into a computer programandtheloanwilleitherbeapprovedordenied. Clearly, the bulk of the labor associated with this process is in collecting, copying, collating and faxing in- formation.Theintellectualportionofthejob—eitherap- provingordenyingtheloan—isprobablyalreadyessential- lyhandledbyacomputer.Throughouttheeconomy,there   * Formoreonroboticsanditspotentialimpactonemploymentand on society, see Marshall Brain’s “Robotic Nation” blog at http://roboticnation.blogspot.com. Acceleration / 81 CopyrightedMaterial–Paperback/Kindle available @ Amazon areprobablythousandsofjobsforclerksandofficework- ersthatcontinuetoexistbecauseofthisclunkyinterface betweenwhatexistsonpaperandwhatneedstobeina computer. Clearly,wecannotexpectthatthisstateofaffairswill continueforever.Financialstatementsarealreadyavailable online. Standard data formats are making it increasingly easy for computers to talk directly to one another. The “XML” standard is a very popular format that is already widely used to move data between different businesses overtheInternet.UsingXML,thecomputersatamanu- facturingcompanycantalkdirectlytothecomputersbe- longingtothecompany’ssuppliers.Thecontinuingdrive towardpaperlessdocumentsandseamlesscommunication islikelytoeliminatemanyofthesehumaninterfacejobsin thecomingyears. The Next “Killer App” Since the beginnings of the personal computer industry, computerhardwaresaleshaveoftenbeendrivenbyapar- ticularsoftwareapplicationsocompellingthatithasmoti- vatedcustomerstopurchasethemachinerequiredtorun it.WhentheAppleIIwasintroducedin1977,it wasin- itiallyasuccesswithinarelativelysmallgroupofcomputer hobbyists. It wasn’t until the first electronic spreadsheet, VisiCalc,wasdevelopedthattheAppleIIbegantogener- ate wider interest. VisiCalc was the catalyst that helped transformtheAppleIIfromaninterestingtoyintoatrue businessmachine.Likewise,whentheIBMPCwasintro- duced,Lotus1-2-3fulfilledthe“killerapp”role.Later,it [...]... of automation will, of course, be in addition to that of offshoring.) Many of these people will be highly educated professionals who had previously assumed that they were, because of their skills and advanced educations, beneficiaries of the trend toward an increasingly technological and globalized world.* Military Robotics One of the biggest investors in robotics technology is the Pentagon In his... factory called the ribosome, the recipe captured in the bar code is again read by other nano-machines that build protein molecules It is these protein molecules that are the true building blocks of life Our muscle tissue, the hemoglobin in our red blood cells, the insulin that we need to process sugar, the enzymes that digest our food—all of these and countless thousands of other structures and chemicals... reverse-engineer it In time, they might begin to tinker with the spacecraft and make it operate in new and different ways Eventually, they would understand the technology at a fundamental level, and they would begin using it to build new machines of their own This will quite probably be the path along which nanotechnology will evolve.30 Nanotechnology is currently in its infancy, and it is likely that it... Nonetheless, the field offers enormous promise and may someday touch nearly every aspect of our lives Amazing new treatments and cures in the field of medicine, the possibility of generating virtually limitless energy from the sun, even faster and more powerful computers, unimaginable newpossibilities in manufacturing—all these things and more may come from nanotechnology But as we contemplate these... possibilities, there is another question we need to ask: will nanotechnology create jobs? Will our displaced cashiers and shelfstockers and office clerks find employment in the nanotechnology industry? A simple application of common sense should give us the answer We speak here of manipulating matter at the molecular level The level of precision required is obviously beyond any human being, and nanotechnology... developed nations and to the developing ones The consumers that drive our markets are virtually all people who either have a job or depend on someone who has a job When a substantial fraction of these people are no longer employed, where will market demand come from? The world economy is a closed system; there are no export markets to prop up the world economy in the way that the Southern slave economy was... In fact, by the time econometrics shows clear evidence of what is happening, it will be very late in the game Economists looking at past data are always looking back at the flat (left) part of the geometrically increasing technology line Prior to the point where the impact becomes obvious, there is really no way past data can show them the steep vertical part of the line that lies ahead The Luddite... relationship between the level of education and training required for a person to do a job and whether or not that job can be automated While doctors are probably not in danger of losing their jobs in the foreseeable future, the same cannot be said for many thousands of knowledge workers and middle managers in the private sector It’s important to note that, while humanoid interfaces like Microsoft’s virtual... really happening may be that they are simply too buried in their data In recent decades, the field of economics has been increasingly taken over by the branch of the field known as econometrics Econometrics is essentially a merger of economics and statistics Econometricians engage in the task of analyzing reams of past economic data They apply advanced statistical techniques and create complex computer... Amazon THE LIGHTS IN THE TUNNEL / 86 ly autonomous role in warfare in the air, on the ground and at sea All of this makes for a rather harsh contrast between the foresight shown by the military as compared with civilian economists and analysts Consider the uneven terrain and the highly unpredictable and dynamic situations that would be faced by battlefield robots Now compare that with the environment inside . food—all of these and countless thousands of otherstructures and chemicalsthatcomprise ourbodies and make usfunctionareproteins. And they areallconstructedthroughnanotechnology. Itislikelythat the coming“nanotech”revolutionwill begin. collating and faxing in- formation. The intellectualportion of the job—eitherap- provingordenying the loan—isprobablyalreadyessential- lyhandledbyacomputer.Throughout the economy, there   * Formoreonrobotics and itspotentialimpactonemployment and on. cohesive thoughtorplanningisbeinggivento the disruptiveimpact thatthesetechnologieswillcertainlyhavein the commer- cialsector and on the overall economy.  Robotics and Offshoring Aswe’veshown,“software”jobsarehighlysubjecttooff- shoring and potentiallyalsotoautomation.Those“Hard- ware”