Our robot overlords will be friendly
I was talking to a potential institutional investor last week and I think I terrified him a little bit. We were discussing the advancements in machine learning and artificial intelligence and the combination of those techniques with robotics.
There is no question that automation has had a profound impact on jobs in America and across the world. Just one of many influential studies on this topic by Carl Benedikt Frey and Michael Osborne found that 47% of US jobs are at high risk of replacement by some form of automation. There can be no doubt that the impact of automation in other countries (think — China) will be as profound if not more so.
As a VC we have to think about the consequences of our investments. As a firm we at Flying Fish have a robotics company and a machine learning company in our portfolio. We are excited and proud to be partnerered with both of these investments. But there are conseqeunces.
In this space I will largely veer away from politics. But in this instance one can not completely separate the two — or at least separate public policy from our investment strategy.
A clear theme of the last presidential election was the loss of manufacturing jobs in the US. To a large extent a certain candidate blamed this on offshoring. But the real story is more nuanced today and likely to become more so in the future. Increasingly the story is automation.
This is why the response of the opposition party to this phenomenon is unsatisfactory. It generally takes the form of ‘don’t worry, clean energy manufacturing jobs will take the place of auto manufacturing jobs’. This seems unlikely. On the one hand many of these jobs will be offshored and on the other, many will be done by robots.
So what to do? It seems we are already heading to a world in which we have a fundamental oversupply of workers. One of my former colleagues from Microsoft would surely jump in at this point and suggest that we have done this to ourselves via overpopulation. Be that as it may, we are faced with a world of both opportunity and risk where there may fundamentally not be enough jobs for all available workers, regardless of government or private sector incentive programs.
Many have turned to the idea of Guaranteed Minimum Income programs, most famously Mark Zuckerberg. This is an interesting idea to debate but seems a long shot in the United States. In the current political climate it is anathema to even bring up universal health care (which every other major industrialized nation already has). Can you imagine the furor of suggesting what in essence will seem like mass welfare to right leaning voters?
Currently we don’t have an answer to this challenge. But as a firm we do spend time thinking about the downstream consequences of the investment decisions we make at a macro level. We debate possible near term and long term solutions. I encourage our peers to do the same and start a more serious conversation such that the VC industry remains a force for positive development and change and doesn’t become seen as a force for job destruction.
I think by the end of my conversation with the institutional investor I had managed to mollify him that in the next three years he was unlikely to be replaced by a bot. But in 10 years… no guarantees.
