Amazon Go and the Future of Work

The Inside team (but especially @jason) was blown away yesterday by the news about Amazon’s new Seattle market, the grab-and-go Amazon Go store. So we decided to do what we do and write a lengthy roundup post about it! But not just the Amazon Go; we went a little further, to look into all the ways automation threatens to change and even upend our economy and our daily lives.

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EVERYTHING MUST AMAZON GO

First, the basics: Amazon has created a small Seattle grocery store that allows customers to just take what they want off the shelves and leave, without having to wait in line or check out with a cashier. In addition to traditional grocery items, Amazon Go will also feature meal kits with fresh ingredients to be prepared at home.

For now, the 1,800 square foot Amazon Go store is only open to Amazon employees, but the company plans to open the doors to the public in early 2017. The company didn’t announce further expansion plans, but based on the slick promotional video released yesterday, it seems evident this isn’t a one-off idea.

Earlier this year, Business Insider reported that Amazon was planning a grocery store pilot program, and may ultimately aim for 2,000 markets around the US in the next decade. They may very well have been talking about Amazon Go plans.

And it doesn’t seem like the Amazon Go concept is the only groundbreaking physical retail innovation the company has planned, either. The Wall Street Journal quotes an anonymous source indicating that Amazon may also be looking into a drive-through location, along with a location offering both in-store and curbside purchase pick-up.

Popular Science looked a bit deeper into the inner workings of Amazon Go’s technology. How does the store know what’s in your basket? And who you are, so that it can charge you?

Basically: When you enter the store, you start up the Amazon Go app on your smartphone. The store then uses a a lot of cameras and LIDAR sensors (lasers) to track everything you do once inside the store. As well, through “deep learning,” sensors are trained to detect very specific movements and variations in weight, so that you can grab a cupcake from a shelf, and the store knows exactly what you took, and whether or not you put it back a second later.

Popular Science online director Carl Franzen pointed out that Steven Spielberg’s “Minority Report” partly predicted this scenario with its creepy interactive Future-Gap store. Mashable discovered an IBM ad from 2006 where a guy runs through a supermarket, grabbing whatever items he likes, only to — in a surprise twist — have already paid for them using RFID technology.

WHAT THE WEB HAD TO SAY

Many bloggers were bullish on the Amazon Go concept, and Amazon’s willingness to make a bold gamble more generally. On Twitter, Tim O’Reilly called it “the future of all retail.” Ben Bajarin looked forward to the same frictionless payment he enjoys with Uber. VentureBeat’s headline says it’s “mind-blowing.” The Daily Caller raved about the promo, saying it “changed the game,” and posing the rhetorical query “how is technology that advanced?”

In Forbes, Phil Lempert says other retailers should fear them, not just because of the technology, but because of their savvy ability to market it and communicate their vision, and (apparent, based on the video) superior marketing and merchandising within the store itself.

And of course, there were jokes. Quick-on-the-draw @midnight redubbed the promo, making it into an anarchist message in praise of stealing. @Vineyille imagined the dark scenario of a self-driving car crashing into an Amazon Go store. Caroline McCarthy went for the “Stranger Things” reference. The Gregory Brothers wondered if this retroactively explains shoplifting. @LEGIQN wonders if you can just steal someone’s phone and eat like royalty now. Many noted that the app would be a boon for the anti-social.

But not everyone seems equally impressed or excited. On CNBC’s “Squawk Alley,” tech investor Roger McNamee said the announcement “doesn’t seem like an earth-shattering thing,” and noted that human interaction is a positive part of the shopping experience. Forbes writer Ryan Mac disagreed with his colleague and concluded that, “for now,” Amazon Go is “all hype.”

CNET suggested some different online destinations that could use their own real-world stores, including Etsy, Instagram and, of course, Pinterest.

ON AUTOMATION

But of course, the exciting news about Amazon Go’s convenience also brought with a deep level of concern about all those cashier jobs that will now go to our smartphones.

Currently, according to the Bureau of Labor Statistics, cashiering is the second most-common occupation in the United States, with 3.5 million employed. The grocery business accounts for about 17% of all US retail, to the tune of around $800 billion. (It’s a category currently dominated by Wal-Mart.)

These worries aren’t just limited to Amazon and its impact on the retail grocery space. In fact, on the same day that the Amazon Go news broke, Greg Hayes, the CEO of United Technologies — parent to the air-conditioning manufacturer Carrier — revealed that the company’s much-celebrated still-open Indiana facilities will ultimately use automation to keep costs down. (They’re even talking about it on “The View”!)

https://www.youtube.com/watch?v=dRI7OWy9B6Y&t=2s

Concern that robots and automation will some day soon supplant human workers en masse has been a recurring theme for close to a century. General Electric coined the term “automation” back in 1947, and even before that, in 1936, the Trades Union Congress issued a leaflet warning about the potential for machines to replace human factory workers.

But focus on the coming robotics revolution has picked up pace in the last few years, and with good cause.

A 2013 study found that 47% of American workers had jobs considered a “high risk” for potential automation. This includes not just the more obvious categories, like truck drivers, manufacturers or cashiers, but some occupations thought to be a bit safer and more insulated, such as accountants, architects and management. Lawmakers have started to pay attention to the issue as well. Members of the Congressional Joint Economic Committee heard testimony on the subject back in June (and concluded that it’s too soon to tell what kind of impact robotics will have on the job market).

Pacific Standard notes that many highly skilled jobs, the sort once assumed to be the exclusive province of thinking human beings, could soon be replaced by artificially intelligent machines. The combination of AI and physical automation has already decimated careers like postal employees and bank tellers. Many more — from attorneys to radiologists to stockbrokers to, gulp, news writers and curators — could soon follow.

In the past, the assumption has always been that automation CREATES more jobs than it destroys. (The old “Well, someone needs to design and build the machines that do all the work!” adage.) But once we create artificially intelligent machines capable of doing most of our jobs, they’ll be able to do THESE jobs more efficiently as well.

Earlier this year, following an extensive study on AI technology, the McKinsey Global Institute concluded that only a few jobs — around 5% — will be entirely overtaken by physical robots or algorithms, but agreed that — long term — about 45% of all activities are potentially on the chopping block. But it’s not ALL doom and gloom. It appears that the full changeover will take decades to actually happen.

https://techcrunch.com/2016/12/03/robots-jobs-and-the-human-fear-of-change/

In TechCrunch, Steve Cousins, whose company Savioke develops and deploys autonomous robots, more directly argues the concerns are overblown, making the case that machines tend to take over “repetitive and laborious tasks” while creating exciting new opportunities. He also cites a 2015 London’s Center for Economic Research study indicating that robots in the workforce not only have zero impact on overall employment, but also increase productivity and wages.

THE END OF WORK?

But what would the end of “work,” in a conventional sense, actually mean? One proposal that keeps coming up to counteract the coming robotic revolution is Universal Basic Income (UBI). Tesla and SpaceX founder Elon Musk has predicted that, eventually, governments would likely provide baseline income for every citizen, regardless of their employment status, saying “I’m not sure what else one would do.” In a discussion with Wired Magazine and MIT’s Joi Ito, President Obama also predicted that universal basic income is “a debate that we’ll be having over the next 10 or 20 years.” And the Canadian province of Ontario has already started considering a trial run of the concept, dedicating C$25 million to providing basic income for senior residents.

But would it work? The New Yorker says UBI “may be an idea whose time has come,” and points out that all ambitious social welfare programs seem utopian and improbable at first. The New York Times examines the concept simply as a tool for fighting poverty. As part of a lengthy examination, FiveThirtyEight concludes that there isn’t a lot of scientific or mathematical evidence about whether the scheme would work or not, but that it’s appeal is “less about pure science than living a lifestyle.”

http://www.nytimes.com/2016/06/01/business/economy/universal-basic-income-poverty.html

In a popular Medium post, writer Scott Santens compares the economy to a Monopoly game, pointing out that it’s only playable if everyone starts out with some capital to buy properties: “A sufficient amount of money for all market participants is absolutely key to the market system for it to work properly.” He also notes that a safety net, guaranteeing that you won’t go broke and hungry, encourages people to take bigger risks, increasing rates of entrepreneurship.

The Atlantic argues, as part of an extensive look at the issue, that universal basic income could fuel creativity in place of industrialization, and a return to a more careful, hand-crafted, artisanal way of building and making things. Former union president and senior fellow at Columbia University’s Center for Business, Law and Public Policy, Andy Stern, argues that UBI is actually a conservative policy, as it empowers individual citizens with funds “and get[s] the state out of the business of managing an overwrought welfare system.”

Rutgers history professor James Livingston is perhaps most direct in an editorial for Aeon magazine titled, simply, “F*ck Work.”

There are counter-arguments, of course. A tweetstorm from Chris Arnade makes the case that it’s inequality of social capital, not wealth, that causes so many issues for everyday Americans. The National Review calls UBI “a terrible idea,” arguing that it would cause government institutions to become more bloated, not streamlined. In Quartz, Allison Schrager argues that even low-level or service jobs have a lot of value for the people who work them, and that giving everyone a check for not working would cause everyone’s skills to stagnate.

In a lengthy response on Quora, Balaji Viswanathan calls UBI proposals “a massive scheme to rob the retired,” pointing out that programs like Social Security and Medicare provide more benefits to the elderly, and would be wiped out if we passed a more sweeping “basic income” proposal.

FROM THE MAILBAG

We asked Inside readers what THEY thought about Amazon Go and what sort of impact it might have. Sean writes that Amazon Go’s concept is great, but will likely be ripped off by everyone else in the industry. (He specifically cites Facebook stores as the future, suggesting “Facebook could serve you ads online based on products you’re actually purchasing in stores…in real time!”

http://www.seattletimes.com/business/amazon/amazoncom-unveils-self-driving-brick-and-mortar-convenience-store/

Nicholas believes mass job loss to automation is not only inevitable, but already upon us. “The jobs have disappeared already. This is proven case study territory not speculation/market research ‘what if?’ territory…” Wayne asks how Amazon will get around a President Trump, who seeks to punish companies that take jobs away from Americans.

But we want to know what YOU think! Is Amazon Go just a sign of far more automation to come? Are we staring down the “end of work” as we know it? Would you support a proposal for Universal Basic Income for everyone in your country? Email daily@inside.com and let us hear from you!


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