Robotnomics

We’re moving on into completely uncharted waters in terms of workforce and business models. Artificial Intelligence, robotics, machine learning and so many other technological buzzwords are ever more recurrent. What if our jobs were to be taken away by robots, by software and by automated actions? What type of society would that give us? What are the opportunities and the threats?

It sure looks like this is a reality in the making, from self-driving cars to personal assistants that know what we want better than us. If we think as far back as 10 years none of these things looked quite possible, but all of the smartphones, tablets and smartwatches prompted into our lives and all of these things developed organically. And thus, here we sit at the cusp of a robotic revolution, where we are looking at technological advancements without boundaries.

Humans, beware!

When we’re saying that machines and software are replacing very ably people we’re think of blue-collar workers, but here’s where we are so wrong. Of course, non-differentiated jobs such as waitresses or cab drivers are already a reality. A good example is to talk about the creepy Pepper which already is being rolled-out by Pizza Hut on Asia and kicking humans out of a job.

But this is really tiny when you acknowledge that in 2016 the finance world already had robot advisors with 80+ Billion dollars of assets under management. The daunting prediction of Scott Smith of investment advisory firm Cerulli is that by 2021 it will be 385+ Billion dollars; that’s greater than the GDP of Norway. So, you might be thinking, why would pay all of those investment fund management fees in the first place, right? It will be a computer running the show, and that computer has no need for Lamborghinis or a really nice house. Probably it is much less likely to feel stress, remorse or panic, and therefore much less likely to make mistakes.

And the thing is not merely the replacement of x humans per one computer, it’s also the business models that are changing so dramatically. For instance, very tangible industries such as constructions are being stormed by disruptive technology such as 3D printing. You would think that there’s nothing more hands-on like building a house, right? Well, take a look how you can build a house on a single day:

What this means for society

So, we know that our society is based on human contribution. We work and get a paycheck, from there we pay taxes and get social intervention, we support our family and plan our old age. This is what we do. But the technological change that we witness is happening fast and broadly in many industries, from food retail to transportation, from the high finance to construction. It is quite clear that someone will be out of a job, and that’s applicable to blue and white-collars. So, what does this mean for us?

My guess is that at the end of the day this revolution will make society more human. Sounds pretty deep, but I guess that when quite technical industries and professions will be taken over by machines, there will be more focus from organizations on jobs where interpersonal relations and a creative touch will make a difference, such as sales, teaching, creative arts and so on. Beside those jobs, as we’ve seen from previous technology leaps in society it’s not only bloodshed and heartache, there will be room for more qualified jobs to sustain and maintain the robots and software, but the required skill-sets will be so specific that there will be great consolidation from providers. For that I think this time around things will be different, and new jobs won’t replace the missing ones.

If more jobs disappear than the ones that are created, and these robots won’t pay taxes and also less people pay taxes, then sovereign states won’t have as much money to support deficits and public debt, which will present itself as a challenge, specially to emergent markets and third-world countries where highly labour intensive jobs are near-shored to. This will present itself as a constraint for countries that are not already fostering investments on these areas of robotics, AI and so on leading to unequal economic growth and development, forcing less developed countries to increase the economic gap compared to developed ones.

Wrapping up, it seems to me that there are some areas to think about then as a global society in the brink of a disrupt revolution:

  1. How will we create equal global economic growth opportunities?
  2. How will we start reforming our global economy towards new industries to absorb an increasing unemployed population?
  3. How will we structure our governments to face this revolution?
  4. How will we maintain sustainable welfare models to protect citizens?