Could Robots and Automation cause an Unemployment Crisis — CACM Article

July 11, 2013 5 comments

I have an an article in this month’s Communications of the ACM (a leading journal for the computer science community). The main point of the article is that most of the work required by the economy is on some level routine and predicatable. This is true of both blue and white collar work, and it includes many skilled occupations.  A key point is that acquiring more skills will not necessarily be a defense against advancing automation technology. Machines are getting better and better at acquiring skills. 

You can read the article here:

“Could Artificial Intelligence Create an Unemployment Crisis?”

There is also an introduction by the editor-in-chief, Moshe Vardi, here:

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The Automated Economy — How Will it Work?

June 14, 2013 1 comment

A few months ago, I did an interview with CBC/Radio-Canada on how a future economy might work in the age of robots and automation. In it, I describe many ideas from my book, The Lights in the Tunnel, and in particular, the need for a guaranteed minimum income — perhaps incorporating some basic incentives.

The program is airing this weekend and the podcast is here.


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Links – Robotics, AI, Automation

April 29, 2013 15 comments
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Technology is Killing Jobs for Skilled, College Educated Workers

April 2, 2013 49 comments

In my 2009 book, The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future, I argued that advancing technology — and especially software automation — would increasingly threaten the jobs taken by college graduates, and might eventually undermine the incentive to attend college. At the time, this was a very unconventional view. Here’s part of what I wrote:

The unfortunate reality, however, is that the college dream is likely at some point to collide with the trends toward offshoring and automation. The fact is that college graduates very often become knowledge workers. These jobs — and in particular more routine or entry level jobs — are at very high risk from automation. The danger is that as these trends accelerate, a college degree will be seen increasingly not as a ticket to a prosperous future, but as a ticket to a job that will very likely vaporize. At some point in the future, the high cost of a college education, together with diminishing prospects for college graduates, is likely to begin having a negative impact on college enrollment. This will be especially true of students coming from more modest backgrounds, but it will have impact at all levels of society.

This is, obviously, a very unconventional view. Most economists and others who study such trends would probably strongly argue exactly the opposite case: that in the future, a college degree will be increasingly valuable and there will be strong demand for well-educated workers.

This is essentially the “skill premium” argument — the idea that technology is creating jobs for highly skilled workers even as it destroys opportunities for the unskilled. I think the evidence clearly shows that this has indeed been the case over the past couple of decades, but I do not think it can continue indefinitely. The reason is simple: machines and computers are advancing in capability and will increasingly invade the realm of the highly educated. We’ll likely see evidence of this at some point in the form of diminished opportunity and unemployment among recent graduates and also among older college-educated workers who lose jobs and are unable to find comparable positions.

We may not see an actual closing of the gap in aver-age pay for college v. non-college graduates because opportunities for workers of all skill levels are likely to be in decline. I am not suggesting that high school graduates who would have otherwise gone to college will choose to remain completely unskilled, but I do think there is likely to be a migration toward relatively skilled blue collar jobs if there is a perception that these occupations offer more security.

As new high school graduates begin to shy away from a course leading to knowledge worker jobs, they will increasingly turn to the trades. As we have seen, jobs for people like auto mechanics, truck drivers, plumbers and so forth are among the most difficult to automate. The result may well be intense competition for these relatively “safe” jobs. As high school graduates who might previously have been college-bound compete instead for trade jobs, they will, of course, end up displacing less academically inclined people who may have been a better fit for those jobs. That will leave even fewer options for a large number of workers.

Economists are now finding hard evidence that this trend has been underway since 2000. In a recently published paper, three Canadian economists argue that there has been a “great reversal in the demand for skill and cognitive tasks.”  Here’s part of the abstract for the paper:

Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000. In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow. We go on to show that, in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.

At present, high percentages of high school graduates are continuing to enroll in college, often taking on punishing levels of debt in the process. As nearly any recent college graduate knows, many of these people are ending up working in lower wage service jobs (Baristas for example).  I think it is entirely possible that future high school graduates will begin to look at these outcomes begin shying away from college.

Inexpensive online education may offer a partial solution, but it won’t necessarily address the fact that the most important incentive for seeking further education is being undermined. If there is no job waiting after all that work, a great many people probably won’t be motivated to make the investment, and the result may be a less educated population. In a world that is becoming increasingly complex and connected, and in a future that will hold unprecedented global challenges, the last thing we need is an an even less informed and educated population and electorate.

I think this is perhaps one of the greatest challenge we will face in the future. As technology destroys both high and low skill jobs, the conventional solutions — nearly all of which tend to emphasize still more education and more training — are very likely to be ineffective. A great many people will do all the right things but nonetheless fail to find a foothold in the economy of the future.  What will we do then?

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Links – AI & Robots

March 12, 2013 3 comments

Robot Co-workers – The Economist

Real Robot Talk – The Economist

Jobs for People to Assist Algorithms – NY Times

Could this Robot Save Your Job?  (no)- NPR

IBM Watson to Pass the Medical Licensing Exam – Computerworld

A New Federal Initiative to Map the Human Brain and also this – NY Times

Cloud Based Brain for Robots – Gigaom

Rise of the Robots beyond the Assembly Line – Seattle Times

Telepresence Robots – The Economist

Robotic Sorter – Singularity Hub

Robots will Steal your Job, but that’s Ok (book — I’m not so sure it will be ok…) –   Federico Pistono

Definitely not ok:  How AI (and a few other things) could wipe us all out – aeon Magazine

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Rise of the Robots – Links

February 5, 2013 2 comments

The Robots are Coming – The Washington Post

A multi-part series from the Associated Press:

Video: The Robot Unemployment Threat –  Financial Times  (The video uses this graph from my book, The Lights in the Tunnel).

Autonomous Healthcare Robots – Singularity Hub

Robot Serves Up 360 Hamburgers per Hour – Singularity Hub

British Army using Micro-Drones in Afganistan –  TechCrunch

March of the Machines – CBS, 60 Minutes

Robot Makers Spread Global Gospel of Automation – NY Times

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Why the Robot Revolution May Turn Out Worse than you Think

January 18, 2013 51 comments

Paul Krugman has recently taken a keen interest in the rise of robots and automation — an issue that I have been focusing on since the publication of my book on this subject back in 2009.

In a recent post, Krugman says the following:

Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.

I think there is a fundamental problem with this way of thinking: as jobs and incomes are relentlessly automated away, the bulk of consumers will lack the income necessary to drive the demand that is critical to economic growth.

Every product and service produced by the economy ultimately gets purchased (consumed) by someone. In economic terms, “demand” means a desire or need for something — backed by the ability and willingness to pay for it. There are only two entities that create final demand for products and services: individual people and governments. (And we know that government can’t be the demand solution in the long run). Individual consumer spending is typically around 70% of  GDP in the United States.

Of course, businesses also purchase things, but that is NOT final demand. Businesses buy inputs that are used to produce something else.  If there is no demand for what the business is producing, it will shut down and stop buying inputs. A business may sell to another business, but somewhere down the line, that chain has to end at a person (or a government) buying something just because they want it or need it.

The point here is that a worker is also a consumer (and may support other consumers). These people drive final demand. When a worker is replaced by a machine, that machine does not go out and consume. The machine may use energy, resources and spare parts, but again, those are business inputs—not final demand. If there is no one to buy what the machine is producing, it will get shut down.  Think of on industrial robot being used by an auto manufacturer. The robot will not continue running if no one is buying cars.*

So if we automate all the jobs, or most of the jobs, or if we drive wages so low that very few people have any discretionary income, then it is difficult to see how a modern mass-market economy can continue to thrive.  (This is the primary focus of my book, The Lights in the Tunnel).

There is plenty of evidence that consumers are already struggling with the structural shift occurring in the economy. The years leading up to the current economic crisis were, of course, characterized by people consuming on the basis of debt rather than income.  A just-released report shows that an ever increasing number of Americans are raiding their retirement accounts to pay current bills.

Does Paul Krugman really believe that it is possible to have a “society that grows ever richer” while a tiny number of robot owners hoover up more and more of total income — and the jobless masses consume the output by running up their credit cards or cashing in their 401(k)s?

The point is that the robot revolution is not just about income inequality. It will ultimately impact the sustainability of economic growth.

Innovation requires the existence of a market. New ideas will not receive the necessary backing if investors do not anticipate healthy market demand.  A future with a dearth of viable consumers will be a far more zero-sum future. It will mean less of the type of innovation we associate with Steve Jobs — and more of the type you would find at Goldman Sachs.

One of the main points I make in my book is that I think we will ultimately have to treat the  market itself as a kind of renewable resource.  Jobs and wages have historically been the primary mechanism that redistributes income (and purchasing power) from producers back to consumers. Widespread reliance on robots and automation may ultimately cause that mechanism to break down — and that will be a threat to continued prosperity.

So what is the solution? In the long run, I think there will be no alternative except to implement direct redistribution of income.  One possibility is a guaranteed minimum income funded by more progressive taxes (on the robot owners), and possibly by other sources (for example, a carbon tax).

It goes without saying that implementing such a solution would be an enormous social and political challenge.  And it will intertwine with the other major problems we face.  Meaningful action on climate change, for example, will become even more difficult in world where much of the population is increasingly focused on individual income continuity.

Make no mistake, responding to the impact that accelerating technology has on the job market could turn out to be one of the defining challenges for our generation.

* Not all robots are used in production, of course. There are also consumer robots. If you own a toy robot, it may “consume” batteries. However, in economic terms, YOU are the consumer — not the robot. You need a job/income or you won’t be able to buy batteries for your robot. Robots do not drive final consumption — people do.

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