WASHINGTON – An excellent TIME magazine story about robots and automation, (The Robot Economy, September 9, 2013), delivered a clear warning to anybody currently in jobs that consist mostly of fulfilling routine, repetitive tasks: “Find something else to do, in sectors that require personal creativity, and/or the provision of constantly changing personal services, because your current job is about to disappear“. (These are my words).
Most repetitive jobs will disappear
Indeed, at this stage in the automation revolution, most repetitive tasks, such as stacking a warehouse, or welding auto parts are performed or will soon be performed by robots. The trend is unmistakable. The only unknown variable is the speed of this historic transformation that will largely depend on the sophistication of the new machines and their cost. Clearly, from a social and economic perspective, a slow transition will give people more time to adapt to a new, mostly automated economy. But this is not something we can control.
Technology replaces human labor
Broadly speaking, there is nothing new in this process of technological innovation . Since the beginning of the industrial revolution in the late 18th Century there has been a relentless “machine replaces human labor” process. Still, until not too long ago, machines favored employment growth. Indeed, they allowed (for the first time in human history) the mass production of consumer goods. This novel large-scale process required a significant amount of human inputs and therefore the use of human labor on factory floors. Thus machines boosted employment. A growing manufacturing sector implied employment growth. Think of the assembly line that allowed to mass produce automobiles.
But now we have come full circle. Assuming that we shall still make large number of cars for decades to come, most of them will be made entirely by robots. No more assembly line workers. At most there will be some super qualified engineers who will monitor from control rooms the work performed by the robots.
3 D Printing: “home manufacturing”
And if we go beyond traditional manufacturing, we see that the scope for enormously disruptive change is potentially much larger. Take 3 D Printing, now still in its infancy. Without getting into too many details, think of a 3 D printer as a mini do-it-yourself manufacturing plant that will soon be able to “make” even sophisticated objects you desire, in your own home.
Right now, if you want to buy a coffee machine, and you do not have much time, you go on-line. You check brands, prices, what’s on sale, and then you place your order, using your credit card. A well oiled logistics chain managed by Amazon or equivalent will receive your order, place your coffee machine in the hands of FedEx, UPS or the Post Office and in a couple of days you get your order, delivered to your door. This system (now common place) is pretty good: user-friendly, cost-effective and reasonably fast.
No more factories, no more FedEx
Well, fast forward to a not so distant day in which when you want a new coffee machine, you buy the software containing the design and the “assembly process” on-line and then you literally “manufacture” your coffee maker at home using your 3 D printer. Same coffee machine, mind you, but obtained via an entirely different process.
And what are the implications of this new process made possible by 3 D printing? Enormous, truly revolutionary and truly scary, if you are in the manufacturing/logistics business.
Right now your coffee machine is probably made in China, because Chinese labor is cheap, and therefore this is the country where small electric appliances are made. Once produced and boxed by the factory, your coffee machine, stacked with many others inside a container, endures a long journey entailing a trip by truck or freight rail to a port. There the container is loaded onto a ship. After having sailed across the Pacific Ocean, your container is unloaded in California. From there it is taken by truck to an Amazon warehouse.
Complex distribution system
After you placed your order on-line, the Amazon distribution system determines the most efficient way to deliver this item to you. In order to make this happen, they usually partner with a major shipping service, like FedEx or UPS. And so, your coffee machine takes another trip by truck and then by plane. Once unloaded at an airport close to you, it is loaded onto another truck that will deliver it to your door.
This is the best we can do today. And it is cost-effective. You place an order on line, pay by credit card, and soon enough you get a reasonably cheap, made in China, coffee maker, delivered to your door.
Even if you account for the added cost of shipping, warehousing, sorting and delivery, you get a very good deal. And consider the added bonus: you saved time. You did not need to get to a store to buy your item. You just spent some time on-line checking options and prices, until you made your final choice.
Disruption
Well, think for a moment about the incredibly disruptive consequences of the unfolding 3 D printing “revolution”. No more Chinese factories making coffee makers. This means no more factory jobs. And no more business for the Chinese logistics companies transporting these goods to the nearest port. By the same token, the container ships become scrap metal, while the US logistics network that handles the goods upon arrival is also redundant.
Amazon may survive as a supplier of software. Or it may altogether disappear because the consumer will be able to buy the software for his/her 3 D printer directly from the inventor.
Are we ready?
Now, let’s look at the implications of this unfolding technological revolution. The most obvious is that over time millions of jobs –from manufacturing to logistics– will be lost. This is inevitable and of course scary. If you own a small appliances factory in China you really do not want to see rapid progress in 3 D printing, because you know that this little devilish machine will eventually kill your business.
More broadly, it is obvious that rapid, highly disruptive technological changes create an enormous challenge for political leaders. By and large elected leaders (too many of them lawyers with modest understanding of science, technology or business) are several steps behind technology. American scientists jokingly call this inauspicious state of affairs a huge gap between a “Digital Nation” and “Analogue Washington“.
Lack of understanding
Indeed, because of their lack of understanding of historic trends and because of their short term political calendars, elected leaders rarely look into the future. They are accustomed to respond to the pressures of the organized interests that fight for the preservation of the status quo –meaning existing businesses and existing jobs. And therefore, in the name of economic and social stability, and for the sake of saving jobs, incomes and families the politicians usually engage in rear guard, ultimately losing battles aimed at preserving the economic interests of their constituents. The net effect of these battles usually is to delay unavoidable change.
Unprepared policy-makers
That said, it would be very hard for any politician to run on a platform of technological change that will imply large-scale jobs destruction. Human beings like change. But only up to a point.
And if change implies the loss of their livelihood, then it is a catastrophe. The problem about capitalism “creative destruction” is that it is hard to anticipate which new sectors my be created after the destruction of the old ones.
Indeed, what if there will be no new sectors? Or what if the new sectors will require just very few people? What will all the others do?
However, one thing we do know. The era in which people with even a modest education could still find factory/clerical jobs with decent union wages is over. Going forward, we know that any repetitive task –in industry or services– can and therefore will be automated.
It is just a question of time.
Opportunities only for creative people
Furthermore, truly disruptive technologies will not just automate certain tasks; they will cause the total disappearance of manufacturing sectors and of all the logistical services that have been created mostly to support them. And what is the alternative? Professions that require personal creativity.
Well, fine; but how many screen writers, marine biologists, cancer researchers, fashion designers, actors, singers, musicians, investigative reporters, yoga instructors, personal shoppers, architects, CEOs and deal makers will the world need? And what will all the others do?
We better start thinking. While many will not like any of it, a world with fewer and fewer conventional employment opportunities is in our future.
Paolo, well done piece. I wonder if this technology will have a big impact on countries which are currently not in the manufacturing business/race. If the technology is in fact a great levelizer from a (complex?) manufacturing standpoint it may have global repercussions w/r/t the incremental spread of industrialiization and associated transfer payments.