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Posted: August 18, 2014

More on reskilling America

Automation doesn't just happen

Thomas Frey

(Editor's note: This is the second of two parts. Read Part One.)

Our economy is based on people. Humans are the buying entities, the connectors, the decision-makers and the trade partners that make our economy work

Without humans there can be no economy. So when it comes to automation:

  • A person with a toolbox is more valuable than a person without one.
  • A person with a computer is more valuable than a person without one.
  • A person with a robot or a machine is more valuable than a person without one.

Automation does not happen simply for the sake of automation. It’s intended to benefit people.

If we only look at what automation will eliminate, we’ll be viewing the world through a glass-half-empty lens.

Though we have a hard time understanding the exact role of tomorrow's worker bees, even our most sophisticated machines in the future will require human owners, human controllers, human customers, and human oversight when things go wrong.

Disruptive vs. Constructive Technologies

In the 1700s, nearly 97 percent of employment in the U.S. was related to agriculture. Today, that number hovers around 2 percent.

This means that over the past two centuries, over 95 percent of all ag workers were displaced by technology.

Any industry today that is being forced to do more with less is working through a similar process of having their workers automated out of existence.

As with everything in life, all industry lifecycles form a bell curve with a beginning, middle, and end. It’s important to understand that all industries will eventually end and get replaced by something else.

Usually the starting point can be traced to an invention or discovery such as Alexander Graham Bell’s invention of the telephone or Henry Bessemer’s process for making cheap steel in large volumes. The end comes when a new industry replaces the old, like calculators replacing the slide rule. 

At some point along the way, every industry will experience a period of peak demand for their goods or service. 

Many of our largest industries today are entering the second half of the bell curve.

Leading indicators that industries are entering their top-of-the-curve midlife crisis are when the disruptors, a growing cadre of startups and their process-altering technologies begin attacking key profit centers.

Prior to reaching peak demand for these goods or service, often several decades earlier, industries will experience a period of peak employment.

Using “Peak Steel” as an example, the peak demand for steel is projected to occur sometime around 2024. This is when composite materials will gain enough of a foothold and the overall demand for steal will begin to decline.

Yet, peak employment for the steel industry happened in the 1970s. The 521,000 employed in 1974 was automated down to a mere 151,000 by 2000 even though the amount of steel produced is now more than triple that of the 1970s. 

In this context, any reduction in employment is a lead indicator of an industry cresting the bell curve, foretelling a downturn in the overall demand for goods or services, as the industry enters its waning years.

Finding the Seeds of Opportunity in Automation

According to a May 2011 study by the McKinsey Global Institute titled “Internet matters: The Net’s sweeping impact on growth, jobs, and prosperity,” the Internet has accounted for 21 percent of GDP growth over the previous five years.

They also concluded the Internet is a key catalyst for job creation. Among 4,800 small and medium-size enterprises surveyed, the Internet created 2.6 jobs for each one lost to technology-related efficiencies.

We are now transitioning from room-size automation that only large companies could afford, to desktop automation that allows small and even one-person businesses to be part of.

In much the same way that the 1985 Apple LaserWriter gave birth to desktop publishing, the 2010 MakerBot’s Thing-O-Matic 3D printer gave birth to desktop manufacturing.

Final Thoughts

As with every 12-step program, everything begins with acknowledging we have a problem. But the problem today is miniscule in comparison to the problems that lay ahead.

Matching displaced worker’s interests with the right opportunities for retraining, apprenticeships, and jobs will be a delicate balancing act at best.

The dangers of lapsing into low-challenge solutions that undercut a person’s drive and ambition can also be problematic, setting the stage for even longer-term problems.

Asking the Trekkiest question of all – “What is humanity's Prime Directive?” – should we be focused on more grandiose goals like traveling at the speed of light, colonizing other planets, controlling gravity, or mitigating the impact of earthquakes and hurricanes?

With automation and AI, we will experience exponential growth in human capabilities. But without a big picture perspective and overarching goals, the path of individual opportunity runs the risk of being hijacked by other interests – political interests, corporate interests, religious interests, and national interests.

We still lack imagination for what future generations will need. To get to this point, a mountain of work still remains.

Thomas Frey is the executive director and senior futurist at the DaVinci Institute and currently Google’s top-rated futurist speaker.  At the Institute, he has developed original research studies, enabling him to speak on unusual topics, translating trends into unique opportunities. Tom continually pushes the envelope of understanding, creating fascinating images of the world to come.  His talks on futurist topics have captivated people ranging from high level of government officials to executives in Fortune 500 companies including NASA, IBM, AT&T, Hewlett-Packard, Unilever, GE, Blackmont Capital, Lucent Technologies, First Data, Boeing, Ford Motor Company, Qwest, Allied Signal, Hunter Douglas, Direct TV, Capital One, National Association of Federal Credit Unions, STAMATS, Bell Canada, American Chemical Society, Times of India, Leaders in Dubai, and many more. Before launching the DaVinci Institute, Tom spent 15 years at IBM as an engineer and designer where he received over 270 awards, more than any other IBM engineer.

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