There’s a real chance that the job you’ve been doing will disappear as the next wave of innovations pulls the rug from under the traditional labour market.
Those jobs most at risk tend to be in the low-skilled and low-wage sector, closely followed by machine-operator and driver positions. But the coming wave of innovation also threatens to “upend white-collar work”, the report says, displacing highly skilled staff in sales and community services and moving them into lower-paying service industry jobs at best “or permanent unemployment at worst”.
This scenario is not restricted to New Zealand. In the US, about 47% of jobs are considered at risk of automation. As former McDonald’s US chief executive Ed Rensi told Fox Business Network last month, “it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging french fries”.
And according to a 2014 London Future report by Deloitte, 35% of jobs in the UK are at high risk from automation over the next two decades, especially low-income jobs in office and administration, sales and services, transport, construction and manufacturing.
The logistics speak for themselves, says US tech consultant Alec Ross, a former senior adviser on innovation to Hillary Clinton. He points to giant electronics manufacturer Foxconn, which makes Apple’s iPhone and iPad, Samsung’s Galaxy phone line and Sony’s PlayStation 4. Last month, Foxconn announced a reduction in “employee strength” of 60,000, saying robotics engineering and other innovative manufacturing technologies were replacing “repetitive tasks previously done by employees, and through training also enable our employees to focus on higher value-added elements in the manufacturing process”.
Foxbots, the mechanical arms “contracted” to the corporation’s assembly line, cost on average three times a worker’s annual salary, but the operating costs are minor. Human labour, by comparison, involves little capex (capital expenditure) but has high opex (operational expenditure).
The terrain mapped out in Ross’ new book, The Industries of the Future, a prescient look at how the school-leavers of today can plan for a future that pitches opex against capex, that offers new opportunities as it pulls the rug from under the feet of the traditional job market.
As he writes, “The world in which I grew up, the old industrial economy, was radically transformed by the last wave of innovation.” But that transformation, built on the back of technology, automation and globalisation, “will pale in comparison to what is going to come in the next wave of innovation as it hits all 196 countries on the planet”.
The AI revolution
That wave is gathering now. As robots proliferate in the world, writes Ross, “the global economy will undergo a revolution spurred by artificial intelligence and machine learning that could be as consequential for labour forces as the agricultural, industrial and digital revolutions that preceded it”.
Already, the cartoon robots of Ross’ mid-20th century childhood in Charleston, West Virginia, are wobbling out of the laboratory to fill vacant spaces in the workplace. In the UK, robot janitors clean Manchester Airport. In Ukraine, a robot glove with finger sensors translates sign language into text on a smart phone.
The Japanese Government is putting NZ$35 million into developing eldercare robotics to meet the urgent demands of an ageing population – a quarter of the country’s people are over 65 – and a low birth rate. From Toyota’s small army of Human Support Robots comes Robina, a 1.2m home helper that can fetch, carry, recognise name tags, even converse. Her “brother”, a C-3PO doppelganger, can do the dishes and play the violin and is being programmed to care for the sick or immobile. As Toyota’s website says, “We hope the Partner Robots can become trusted partners, helping to provide an improved quality of life.”
Just this year, researchers at the Massachusetts Institute of Technology, University of Sheffield and the Tokyo Institute of Technology successfully demonstrated a tiny untethered origami nanorobot that can unfold from a swallowed capsule and, steered by external magnetic fields, crawl across a simulated stomach wall to patch a wound or remove a swallowed battery (every year, 3500 button batteries are reported as swallowed in the US).
Further down the robot order, drones and automated truck deliveries are set to replace jobs in the transport and delivery sector; a step ahead of Google, Walmart and Amazon, California-based start-up Matternet has been running drone deliveries of medical supplies in Haiti, Bhutan and the Dominican Republic for some years. Driverless cars, first mooted by General Motors in 1939, are now logging up autonomous miles in the US, Australia, China, Singapore and Sweden trialling the technology. Car parking businesses, Ross writes, will struggle as self-driving cars drop off passengers, then wend their way home.
And those white collar workers? Ross predicts legal assistants, even professional translators, may go the same way as “the lamplighter and ice delivery man” as computers scrutinise legal documents and Google Translate spits out millions of translations a day.
But robots caring for our parents, working in the next cubicle, cooking dinner, performing surgery? It is not happening today or tomorrow, says Ross on the phone from his home in Baltimore (robots in operating theatres currently serve more as mechanised precision tools than autonomous surgeons, he says), “but it will happen during most of our lifetimes”.
Robotics is just one of several waves crashing on the shore of our labour market. In his book, Ross describes the effect of the “code-ification of money and trust”, whereby digital technology allows for new forms of peer-to-peer transactions that bypass the traditional retail, accommodation, passenger transport and banking systems in favour of a digital, app-driven, trust-based platform reliant on transparent often star-rated feedback systems to provide the assurance traditionally given by the mainstream service or retail sectors.
Already the “sharing” or “gig” economy, whereby assets – a spare bedroom, a spare seat in the car and – inevitably, says Ross – home-cooked meals, dog walking services, maths tutoring – are made available via a purpose-built app is affecting traditional job sectors.
Consider online bed- and room-rental service Airbnb. Conceived in 2008 by three Californians who decided to rent out an air mattress on their floor to help pay the rent, the company is now worth over US$20 billion. Or app-based ride-share service Uber. Now operating in 60 countries including New Zealand, it is steeped in controversy, challenging the taxi industry, unions, government regulations and even its own drivers with its plan to “kickstart autonomous taxi fleet development” – so kicking thousands of Uber drivers into obsolescence.
But as jobs in more traditional sectors are put under threat, new opportunities are appearing. As the NZIER report states, advances in technology may displace certain types of jobs, but historically they have also resulted in net job increases: “We adapt to changes by inventing entirely new types of work, and by taking advantage of uniquely human capabilities. Technology will continue to free us from day-to-day drudgery and allow us to define our relationship with ‘work’ in a more positive and socially beneficial way.”
In The Industries of the Future, Ross points to the growing field of data analytics. As he says, we leave our digital footprints everywhere. Through cellphones, GPS signals, social media, browsing history, online purchases and, as the era of the Internet of Things (IoT) takes hold, watches, fridges, cars, garage doors, farm equipment – any object that can transmit or receive data “is leaving little beacons of data production and consumption”. This year alone, the world’s population is expected to generate 5.6 zettabytes (a zettabyte is a trillion gigabytes) of such data. By 2020, this will rise to nearly 60 zettabytes. New and evolving IoT technology will monitor our health and energy consumption, decongest roads, record productivity and further reduce the need to go to an office to work.
Normally not given to hyperbole, Ross says the digitisation of “nearly everything” is poised to be one of the most consequential economic developments of the next 10 years, not in the amount of information created but in how it is processed and used.
He writes that land was the raw material of the agricultural age and iron the raw material of the industrial age, but “data is the raw material of the information age”.
And it is being used extensively, in marketing, research, security and politics – data analytics were instrumental in the success of President Obama’s two presidential campaigns – as well as for translation services, education records and new health advances. Already, blood pressure monitors, electrocardiographs and other sensors are interacting with mobile phones to transmit vital data to remote health facilities, allowing for the delivery of diagnoses, treatment and health promotion from the best hospitals to some of the poorest regions in the developing world.
Although data analytics provide a ready pathway for young jobseekers, our increasing reliance on technology exposes our personal and public lives to attack. Through the digitisation of personal data, our private details become a public resource, vulnerable to spurious correlations, discriminatory bias or simple computer error. Systems controlling homecare robots, power plants, air traffic, pacemakers and other networked “things” are all hackable – with the click of an untraceable mouse, the functioning of whole corporate or political entities can be hobbled by viruses and other forms of malware.
“One person with a keyboard, internet connection and some coding skills has an arsenal at his fingertips,” says Ross. “That is a frightening thing.”
In 2012, hackers linked to Iran attacked Saudi Aramco, the world’s largest energy company, with information-stealing malware Shamoon, affecting computers in the US, the Netherlands and Saudi Arabia. In 2014, the Federal Bureau of Investigation blamed North Korea for a cyberattack against Sony that destroyed systems and stole large quantities of personal and commercial data following the film studio’s release of a comedy about a plot to assassinate Kim Jong-un.
The weaponisation of code is now the most significant development in conflict since the weaponisation of fissile material, says Ross. “The world has left the Cold War behind, only to enter into a Code War … If a college student asked me what career would most assure 50 years of steady, well-paying employment, I would reply cybersecurity.”
The promise and the peril
Most books about the future are utopian or dystopian says Ross: “We are going to live forever, happy and healthy, or [they are] written with fists clenched and eyes pinched shut.”
The Industries of the Future charts a steady course between the two. The changing nature of work, he writes, “contributes to the promise and peril of our future”. When people invent things, Ross says, they are solving a problem. He points to the success of branchless banking services such as Kenya’s M-Pesa, effectively creating mobile finance “because they were in an environment without easy access to financial services”. The same with Uber. “Uber is a product of young single men who like to go out and at the end of the night didn’t want to wait half an hour for a cab driver – so it is solving a 30-year-old Californian’s problem”.
Should we be worried? According to the NZIER report, as a nation we are “enthusiastic technology adopters”. We were quick to take up smartphones and our internet connectivity across regions, ages and genders is more than double the current global average. At the same time, survey respondents, irrespective of occupation, saw only a low-to-moderate degree of risk that their jobs would be automated over the coming decade.
Not just Silicon Valley
The good news is that such innovation doesn’t have to come out of Silicon Valley. As Ross argues, the geographic centre of future markets extends across the globe.
He points to New Zealand, where “domain expertise” in agriculture – as he says, “Kiwis know cows” – has led to the invention of a precision-agriculture recording system. Developed at Massey University and commercialised by C-Dax, the Pasture Meter, now used on a third of dairy farms in the country, measures grass 200 times a second, providing accurate data that, in conjunction with GPS and integrated software, allow farmers to plan grazing rotations and buffer out deficits or oversupply.
As C-Dax managing director Greig Shearer says, “It gives the farmer the information – to direct where to feed the cows, whether there’s enough grass or not enough or too much – to make decisions.”
Ross also points to Estonia, the “little country that could”. Following independence and the collapse of the Soviet Union, the embattled country was left reeling: empty shops, rationed food, plummeting wages and more than 1000% inflation. But the transitional government of the early 1990s set about a programme of reform, privatising industries, abolishing trade barriers and opening its doors to foreign investment.
Today the former Soviet republic has become a hub of technological innovation, Skype being its most notable export. It has the world’s fastest internet speeds, a universal health records system and has pioneered the use of online voting. Today, writes Ross, it’s “one of the most connected countries in the world” thanks to a “near-radical openness”.
It’s a contentious message, commending those countries investing in the familiar infrastructure of globalisation – government deregulation, austerity, the free flow of capital – while ignoring the moves by many smaller nations to protect domestic industries, build new talent, reassert control over their own technology and monetary policy and – as Evgeny Morozov, US-based writer, researcher and contributing editor for the New Republic writes – “maintain a modicum of sovereignty”.
“Open” in Ross’ use of the word, writes Morozov in the Baffler, “can only mean one thing – ‘open for business’, and particularly for business involving American capital.”
But Ross’ world view also champions other less partisan forms of openness. The countries that will “thrive” in the innovation stakes, he says, are those that are open to ethnic minorities, to religious minorities, to people who are lesbian, gay, bisexual and transgender, to women.
In travelling the equivalent of 25 circumnavigations of the globe to research the geographies of the industries of the future, Ross came to the conclusion, “based on cold-blooded analysis”, that it is in a country’s best interest to empower women in the economy and in business, and “those societies that do so most intentionally will be home to the industries of the future”.
Countries must also be open to young people, to society’s “digital natives”. He points to start-ups created by young people not just in Silicon Valley but in the youth-friendly cities of London or Berlin – “not Italy or France”.
“San Francisco is one of most expensive places in world to live, so why do 28-year-olds congregate there? Because it has the culture they want to live in. There are places in New Zealand that have a culture that tilts towards the interest of these twenty- and thirtysomethings – that is where the HQs are going to be."
But the impact of such changes will be widespread. Although increasing digitisation and the use of mobile platforms are helping to bring “frontier economies” into the economic mainstream, this next wave of innovation will challenge the middle classes in developed countries, says Ross. He anticipates increasing inequality, disruption and “the sense it is harder to get ahead”.
A strong safety net will be needed for displaced or casualised workers, a “social contract” for the information age. “But it’s not going to come from tech companies – they don’t have the interest or the aptitude. Ultimately it falls squarely on the shoulders of government.”
Industries of the future
Ross agrees that his list of industries of the future could have been longer. The commercialisation of space is provoking a lot of hoopla, “but I don’t see that becoming a trillion-dollar industry; I don’t see it impacting on our lives at home and at work like the big five industries that will drive the next 20 years of change to our economies and societies”: robotics, cybersecurity, big data analytics, the “code-ification” of money and trust, and genomics.
And he certainly could have included clean renewable energy. “One of the world’s great challenges is climate change – if in 10 years we are still burning fossil fuels to produce energy, it will be a real failing of mankind. But I chose to write about those fields in which I felt I had a depth of expertise.”
How can today’s school-leavers prepare for these new fields of work? Ross recommends children learn a foreign language (his 13-year-old son is studying Mandarin), maths, robotics and coding – if not at school then through one of the many free courses online.
At tertiary level, he advocates a mix of age-old liberal arts education – to learn how to think in different ways, to “break problems into smaller parts” – and sciences. As he writes, “Today’s youth who will enter tomorrow’s workforce will need to be more nimble and more familiar with the broader working of the world to be able to find a niche that they can fit into.”
And nimble they must be. According to a recent report by the Foundation for Young Australians, today’s school students will have about five career changes and an average of 17 different jobs during their working life.
Ross is not concerned. In the Industrial Age, he says, you would have one job and one employer for 30 years, “then you got your watch and your goodbye party. It wasn’t that evolved from the agricultural age model when you were born on someone else’s land and worked on that land and died on that land 50 years later. While it is disorientating to have to be so mobile and so flexible, by the same token there is a certain kind of tedium that comes from working for a single employer for 30 years.”
Industry, too, will have to be more flexible. In his book, Ross quotes HG Wells: “Adapt or perish, now as ever, is nature’s inexorable imperative.”
It may be nature or it may be the neoliberal reform of the world’s labour markets presented, says Morozov, as the “reasonable and future-oriented option” for developing countries to “leapfrog right into advanced, knowledge-based capitalism”.
Certainly, there is resistance from both sides of the political divide. Already Donald Trump’s success in the US primaries has been explained in part by two generations seeing their jobs under threat by software, and British economist Guy Sanding warns against the growing precariat, those living a life of unstable labour, unstable income and a lack of “occupational identity” as the job market becomes increasingly casualised (Standing advocates a universal basic income – a proposal ignored by Ross).
Either way, this new wave of innovation is already having an effect, largely unimpeded, on existing industries and labour forces across the West.
Be it a taxi company, bank or hotel chain, says Ross, “either these industries figure out how to innovate themselves or some 28-year-old from Silicon Valley will do it. The taxi industry failed to change over 60 years, so it was eventually changed by a 30-year-old from California who could not care less about the existing interests of people in that industry.
“If you think about agriculture, where does that innovation come from? Is it going to come from farmers? Or is it going to come from a 30-year-old who has figured out how to use a new technology to draw more efficiency out of the land?”
The genomics revolution
Four of Alec Ross’ “industries of the future” – robotics, cybersecurity, big data analytics and the “code-ification” of money and trust – are built on a code of 1s and 0s; the fifth will be built on our own genetic code.
“Genomics is going to have a bigger impact on our health than any other single innovation of the 20th century. We will live longer lives, but our lives will grow more complicated as we manage more information and more choices.”
Sequencing the human genome has paved the way for new commercial possibilities in the diagnosis and treatment of ill health. Ross predicts a time when computers crunching through gigabytes of sequenced DNA will be able to identify mutating proteins, allowing for early diagnosis and treatment. Already liquid biopsy trials – blood samples tested for tumour DNA – and molecular pap smears to detect ovarian and endometrial cancer are proving successful.
Again there are fears: of genetic selection and designer babies; of a new generation of drugs diverting attention from lifestyle, diet and the environment; of innovation benefiting the wealthy while elsewhere millions still suffer preventable deaths.
And still there is a mismatch between the speed and precision of genetic analysis and medicines tailored to a person’s genetics and the characteristics of their tumour. Ross writes, “Where we are today with genomics is the equivalent to where we were in 1994 at the advent of the commercial internet.” But genomics is well on the way to becoming the next trillion-dollar industry, he says, extending lives and nearly eliminating diseases that kill hundreds of thousands of people a year today.
This article was first published in the June 25, 2016 issue of the New Zealand Listener.