Machines based on digital technology have been replacing humans in many phases for quite a while, but we have barely noticed it. Now, we are entering the phase where the introduction of new complex digital applications is going faster and faster as shown.
Pilot less Airplanes
Driverless Cars
Language Translation
U-tube
the I-Pad II
the I-Pad
the I-Phone
the I-Pod
IBM's Watson wins Jeopardy
ATM machine, Internet, e-mail, cell phone, digital cameras,
The authors point out that Information Technology (IT) is transforming manufacturing, distribution, retailing, media, finance, law, medicine, research, management, marketing and almost every other economic sector. The book’s sub-title, “How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversibly Transforming Employment and the Economy”, describes the scope and magnitude of the change. The authors state that the rate of improvement in the digital technology and the adoption of it are exponential.
Mathematically speaking, exponential growth starts very small, so small that the growth is practically indistinguishable, and then, once it starts growing, it grows faster and faster, so fast that it shoots right up through the top of the graph.
Pattern recognition and voice activated instructions used to be the domain of the human mind, but machines are catching up and in some cases exceeding the unique capability of the human mind. Currently, digital technology is doubling every 18 months, and the experts have no idea how far this development can go. However, they are convinced that computer hardware, software and networks will become ever more powerful, swift and will have an ever increasing impact on jobs, skills and the economy. Moreover, adoption is worldwide, including China, and there will be no way to stop that. Worse for humans, the race has just begun, and we ain’t seen nothin’ yet.
In a word, investment in machines is replacing and will continue to replace investment in humans. The authors claim that: “We are in the throes of a Great Restructuring and our technologies are racing ahead while many of our skills and organizations are lagging behind.” This book is a must read.
Pattern recognition and voice activated instructions used to be the domain of the human mind, but machines are catching up and in some cases exceeding the unique capability of the human mind. Currently, digital technology is doubling every 18 months, and the experts have no idea how far this development can go. However, they are convinced that computer hardware, software and networks will become ever more powerful, swift and will have an ever increasing impact on jobs, skills and the economy. Moreover, adoption is worldwide, including China, and there will be no way to stop that. Worse for humans, the race has just begun, and we ain’t seen nothin’ yet.
The reason for the acceptance of the digital technology is that the machines perform better than humans. They make far fewer mistakes; they work 24/7, don’t get sick or require maternity leave, don’t take vacations, don’t join unions and go on strike and don’t demand higher wages, health care insurance or pensions. And the machines have become more applicable and less and less expensive as the technology has improved.
A couple of examples of whole industries being impacted are worth noting. You have doubtless noticed that your dentist and doctor now read x-rays on their computers. Digital has replaced an entire industry that used to be based on silver halide photographic prints. Today, Eastman Kodak, the once giant company that created much of the film technology, teeters on the edge of bankruptcy. They either did not see digital coming or treated it as a passing fancy that would have no major impact upon their silver based business.
A second example was discussed in an earlier blog, namely, the new electronic book
(e-book) invented by Amazon called the Kindle. The Kindle is four years old this month, and is already replacing the traditional paper-based book. The e-book has the potential of eliminating all the human work involved in manufacturing and marketing a paper book from cutting the tree, converting it to paper, printing the paper, binding the book including the publishing and subsequent shipment of the book to stores and libraries. The number of human jobs that will be eliminated from this one application alone is gigantic.
Given the information about the degree of penetration of digital technology into our daily lives and the number of human jobs displaced, one might expect that it would be a main topic of discussion in Media, Business, Institutional and Government publications; but there is virtually no mention of the impact of digital technology anywhere.
Instead, we hear from our Media, Congress and especially our President that evil, greedy, immoral and possibly illegal Wall Street has somehow caused Main Street to lose income while an ever increasing amount of remuneration is going to Wall Street employees. In short, the argument goes, “the rich are getting richer at the expense of the Main Street middle class who are getting poorer”. We are told over and over that the Occupy Wall Street movement reflects his mood.
However, based on what the authors of “Race the Machine” are telling us, Wall Street has nothing to do with what is causing the Great Restructuring. Since we now know how broadly and pervasive the adoption of job-stealing digital technology is and how businesses, government, non-profit institutions and we as individuals are taking advantage of it, we have found the culprit. In the words of that famous possum of comic strip days, Pogo, “We have met the enemy, and they is us.”
In summary, why the recovery from the Great Recession has been jobless is now clear.
- The jobs are being taken by machines, and they won’t be coming back.
- Because capital investment in and maintenance of machines is low, employers have an incentive to continue to replace humans.
- Humans will not win the race against the machine given that the machine will be able to take over more and more human activities, and as the digital technology expands to do ever more complex work, the rate of human replacement will grow exponentially.
- Humans will have to team up with machines to survive.
The impact of this phenomenon is immense and must be addressed very soon with meaningful programs because it is true that Humans without jobs will not be able to purchase the goods that are made by robots and will not be paying the taxes required to sustain social programs. Consequently, the owners of the robots will become richer and the replaced humans will become poorer.
Creating class warfare by blaming this on those who own and/or have the knowledge to manage the robots is not only irresponsible but extremely dangerous. We already see mobs in the streets. Therefore, it is urgent that our leaders grasp the significance of this structural shift and begin to develop plans to deal effectively with it.
How to Begin:
The job creators should be divided into three phases: (1)Corporate and Institutional Businesses that can afford to purchase and manage digital technology, (2)Entrepreneurial Businesses Developing New Digital Applications and (3)Small and Start-up Businesses who cannot afford or don’t need to install or manage digital technology.
Major Corporate or Institutional Businesses These firms are already adopting the latest digital technology so they want workers who have the skills required to utilize and manage the digital equipment and programs. This means college and advance degrees in what is called STEM (Science, Technology, Engineering and Mathematics) and will require constant upgrading of skills. The authors call this “Racing with the Machine”. These humans will earn good salaries, and if they keep up with the latest developments they will remain fully employed.
What This Group Needs:
- Taxes and regulations reduced to create a Level Playing Field with foreign competition.
- To fill the shortage of workers with STEM degrees (Science, Technology,Engineering,Math)
- Provide some financial assistance to students taking STEM courses
- Encourage females who make up 60% of college graduates to take and stay with STEM majors
- Encourage foreign students educated in STEM to stay and become citizens
Entrepreneurial Businesses Developing New Digital Applications: These are businesses that are creating new applications for digital technology that will extend the uses beyond Facebook and Twitter. They will attract the very smart extremely creative persons, and it will not matter what degree of education they have.
What this Group Needs:
Small and Start-Up Businesses: These firms are too small to afford to purchase and man digital technology or where digital technology cannot currently compete with humans. They will be able to employ those who have normal high school, trade school and junior college as well as college diplomas. A partial list of those in this category includes all of the trades such as plumbing, electrical, carpentry, construction, auto mechanics as well as health care and some phases of education
What This Group Needs:
If financial assistance is needed for those thrown out of work by the new digital machines, the present unemployment insurance program should be used. But the recipients of such assistance should be required to take courses that would permit them to compete in the new markets or they should be required to perform meaningful work for the community that the community cannot afford to staff.
If our government would undertake such programs, we would see economic activity increase in proportion to the confidence instilled in businesses, and jobs would begin to grow again. The revenues lost as machines take tax payers jobs would be replaced by additional taxpayers who will manage the machines, those who create new machines and those whose jobs are immune from machine take over.
