Where Are The Jobs? Are Humans The Horses Of The 21st Century?

10/01/2017 16:59

The documentary Humans Need Not Apply is fascinating. It states "as mechanical muscles pushed horses out of the economy, mechanical minds will do the same to humans. Not immediately, not everywhere, but in large enough numbers and soon enough that it's going to be a huge problem if we are not prepared. And we are not prepared". So the questions stands, "Are humans the horses of the 21st Century?"

We have heard from many politicians about how outsourcing and/or immigration are affecting job creation within the US and Europe and both issues were a key part of the Brexit and Trump campaigns. At some point the reality needs to hit; neither immigration nor outsourcing are the issue. The real issue is technology and the decline of jobs:

1. Driverless cars and cashier less stores:

Driverless cars are coming and soon. Google, Tesla, and Apple are all competing in the production of driverless cars and Ford and Volvo are also moving into this space. Driverless cars are just a matter of time; just imagine the impact. If Uber and other transportation services become driverless that is estimated to affect approximately 3.5 million drivers in the US alone. The cost benefits of driverless cars include companies saving on operating and insurance costs, so naturally there is a real incentive for transportation companies to implement this technology. However, from the point of view of our society, the loss of that number of jobs will have a considerable detrimental impact.

It is not just driverless cars that are changing the landscape. The broader application of technology is responsible for the loss of jobs; when we go into a supermarket or bank we are able to check out or make deposits without any human assistance. Amazon Go is a store with "No lines, no checkouts and no registers"; you buy everything via your Amazon App. It may sound futuristic, but the first Amazon Go store opens in Seattle in 2017. This is the next generation of retail with no checkouts at all. This is the new reality and it is happening now. The retail sector is one of the UK's largest employers, employing approximately 3 million people in the UK, any loss of jobs will be significant.

2. The effect on agriculture and manufacturing:

We have already seen the massive decline of jobs in agriculture. Technology has transformed the agricultural industry, from highly efficient mechanical harvesters to drones that are replacing traditional radio-controlled aircrafts, the mass workers previously required within the agricultural industry are no longer needed. In the US alone, during the 20th Century, there has been a decline from 41% to 2% of the workforce.

Manufacturing has also seen a decline in jobs, and those jobs are unlikely to return especially as we are in the era of 3D printers and other AI technology which are genuinely taking on the jobs of humans. In 2014, a PWC survey stated that 11% of manufacturing companies have already moved to volume production of 3D printed parts or products. It is just a matter of time before 3D printers are the full production line.

3. The drip effect caused by AI (artificial intelligence):

These examples highlight how technology is taking over jobs en masse and generally the jobs at the manual end of the hierarchy. However, should also consider the slow drip decline that is taking place within other sectors such as the professional services sector. Take the legal profession for example; whereas the legal profession has been slow to embrace change and technology, it is now starting to do both. As it does, we have started to see a drop in the decline of roles at the bottom of the legal value pyramid; in the UK over the last 10 years we have a seen a reduction at entry level. We expect that decline to continue.

Further, increased AI and tech improvements will result in greater productivity, which in turn will impact on employment; one person will be able to do the job of two (or more). When I started in the legal profession nearly 18 years ago, I would spend what now seems like a huge amount of time, researching, drafting and creating records. Most of those tasks are now automated and mobile and take a matter of minutes not hours. Ultimately we are more efficient and that level of efficiency and productivity reduces employment.

Efficiencies created by technology are happening across many sectors and at most levels. Think about IBM Watson, an IBM supercomputer that combines artificial intelligence and sophisticated analytical software for optimal performance as a "question answering" machine. There has been some discussion as to whether IBM Watson Health will replace jobs within the medical industry. It is more likely that initially, at least IBM Watson will create greater efficiencies which longer term will result in fewer jobs on the basis that one person can just do more. This might be great for the end user; greater accuracy, efficiency and reduced costs but will it also mean a job reduction within the industry?

4. Are the new jobs replacing the old?

The World Economic Forum has stated that by 2020 5 million jobs in the world's leading economies will have been lost, more accurately, around 7.1 million jobs will be lost and only 2.1 million will be created and it is the latter part that is the most concerning. We are creating jobs but at a slower space. Indeed, the Bureau of Labor Statistics data states that in the 1990s each new firm hired 7 to 8 workers but now they are hiring 4 to 5 workers . Tech-driven efficiencies mean we cannot create enough jobs to replace the old ones.

So, what is the plan? Andrew McAffee in Droids Taking our Jobs stated "I'm very confident we're going to learn to live more lightly on the planet, and I am extremely confident that what we're going to do with our new digital tools is going to be so profound and so beneficial that it's going to make a mockery out of everything that came before." That would of course be amazing. However, others such as Elon Musk have suggested that maybe the governments might have to pay people to ensure they have enough income. In fact a number of European countries are considering introducing a basic minimum income for its citizens. What is clear, is that we need to stop listening to politicians who say that immigration or outsourcing is the issue. Neither reason is accurate.

As we move on from 2016, the year that will go down in history as the year of major political developments, we should take a moment to reflect the real issues facing us, our communities and our children. We need a clear plan on how we are going to deal with the loss of employment and the future of our children and society, not just in terms of loss of income but to ensure we have an active, fulfilled society. We need to stop thinking that immigrants are taking our jobs or that in-sourcing is a real solution. 2020 is just round the corner. We need to focus on the real issues and to make our leaders focus on finding a real solution.