Feb 192017
 

 

The statistics continue to come about the challenging future of work with the Harvard Business Review looking at how artificial intelligence is changing the role of knowledge workers and the World Economic Forum reports how Japan is already well down the track of automating many ‘white collar’ roles.

A couple of decades or so back, the assumption was ‘knowledge work’ represented the future of employment and the thought of management being replaced by computers or robots was unthinkable.

That hasn’t proved to be so as the low end jobs, which we thought would be taken up by displaced industrial workers were offshored, subject to a ‘race to the bottom’ in pay rates and, now, are increasingly becoming automated.

While the robots first came for call centre workers, it’s quite likely the next wave of will affect white colour workers reports Dan Tynan in The Guardian who has an overview of some of the likely fates of various occupations.

A good example of the shift, are lawyers with Tynan citing the company DoNotPay which uses AI to help customers fight traffic infringements as an example of the legal profession being automated out.

Bad for young lawyers

This though isn’t new in the legal profession. Over the past twenty years many roles in fields such as property conveyancing and contract drafting have been offshored, so much so that junior lawyer’s payrates and job prospects have collapsed as entry level jobs have dried up.

How the legal profession has used automation and offshoring is a good indicator of how these tradition industries are evolving, now a senior lawyer can handle more work and the need for juniors and paralegals is reduced. The work stays with the older worker while younger workers need to look elsewhere.

While Tynan discounts the effects of automation on the construction and health industries, those sectors are similarly being changed. Robot bricklayers, for example, allow older workers to stay in the industry longer and increase productivity.

The internet of things and artificial intelligence are similarly taking the load of nurses and doctors while making diagnostics faster and easier with major ramifications of these industries.

Dirty data

There are weaknesses in a data driven world and this gives us clues to where the future jobs may lie, the Harvard Business Review optimistically notes many roles can “composed of work that can be codified into standard steps and of decisions based on cleanly formatted data,” however obtaining ‘cleanly formatted data’ is a challenge for many organisations and managing exceptions, or ‘dirty data’ feeds, shouldn’t be underestimated.

Unexpected consequences exist as well, the media industry being a good example. While the demand for content has exploded, the rise of user generated content on social media and the collapse of advertising models has upended publishing, writing and journalism. While artificial intelligence and animation can replace actors and reporters, it hasn’t done so in a major way yet.

How industry sectors will be affected by automation is something the US Bureau of Labor Statistics looked at in 2010.

The roles which the US BLS estimates may be less affected by automation may be more affected than we think – how the retail and media industries changed in the twentieth century is instructive where the models at the beginning of the century were upended but by the end of the millennium employment in those sectors was higher than ever.

The future of work isn’t obvious and the effects of automation bring a range of unforeseen consequence and opportunities – this is why we can’t rest on our laurels and assume our jobs, trades and professions will be untouched by change.

Feb 082017
 

“Neo liberalism is dead” was Paul Mason’s opening for his talk ‘Will Robots Kill Capitalism?’ At Sydney university on Monday night.

Mason, who was promoting his book ‘Postcapitalism: A Guide to Our Future’ was exploring how we create an alternative to the failing neo-liberal world while avoiding the failings of the past.

Describing the current ennui towards establishment politics as being “the biggest change since the fall of the wall in 1989,” Mason believes that the neo-Liberal, pro-markets, view of the world is now failing because the general population increasingly can’t afford the credit which powers the current system.

Increasing voter hostility

With increased insecurity the general population’s hostility towards the global elites is only going to increase, Mason says, as a low work future is traps people into low income ‘bullshit jobs’.

Mason describes a bullshit job as being something like the hand car washes that have popped up around UK (and Australia) where workers are paid the absolute minimum to provide a service cheaper than any machine.

With bullshit jobs, it’s hard not to consider the white collar equivalent – just yesterday The Guardian, which Mason writes for – described a report by UK think tank Reform which suggested 90% of British public service jobs could be replaced by chatbots and artificial intelligence.

It’s easy to see those same technologies being employed in the private sector as well with middle management and occupations like Human Resources and internal communications being easily automated out by much flatter organisations.

A low work future

The result of that, which we’re already seeing, is increasingly profitable corporations that barely employ anyone.

However for companies like Google, Facebook and Apple those business models also present risks as they are valued by the market far beyond any reasonable expectation of return – even if they do manage to eat each other.

Another risk to today’s tech behemoths is the commoditization of many of their industries. “Not all of the high tech economy will be a high value economy.” Mason point out, going on to observe that Google may have recognised this in carrying out their Alphabet restructure.

The neoliberal Anglos

Not all countries though have followed the Anglo Saxon neo-liberal model over the past forty years though. In what Mason describes as “The yin and yang of globalIzation,” he point out China, Germany, Japan and South Korea Have focused on production and raising living standards while the English speaking nations enforced austerity on their populations with large groups being left behind both socially and economically.

Which leads to Mason’s key question, “will the low work future see neoliberalism replaced by ‘neo-feudalism’ or something more enlightened?”

To support the latter, Mason suggests a transition path into the ‘low work future with the following features;

  • automation
  • basic income
  • state provided cheap, basic goods
  • externalising the public good
  • attacking rent seeking
  • promoting the circular economy
  • investing in renewable energy

That list seems problematic, and at best hopelessly idealistic, in today’s economies – particularly in the neoliberal Anglosphere.

A need for new mechanisms

Mason’s points though are important to consider if we are facing a ‘low work’ society as there has to be some mechanisms to allow citizens a decent standard of living even if the bulk of the population is unemployed.

Even if we aren’t facing a low work future, the transition effects we’re currently experiencing where many of today’s jobs are going to be automated away threaten serious political and economic dislocation in the short to medium term.

What Mason reminds us is that the political and economic status quos can’t be maintained in the face of dramatic technological change. We have to consider how we’re going to manage today’s transformations so we don’t end up in a neo-feudal society with the discontent that will entail.

 

Jan 182017
 
social media is about connecting with friends

As the UK government ties itself in knots over what Brexit means, the French administration has announced a new set of skilled and tech visas, reports Tech Crunch.

While the French tech sector is nowhere near the size or diversity of the British ecosystem, it has been growing rapidly and various European centres are jostling to take London’s position as the continent’s leading IT city as Britain seems determined to squander its position.

Like many of these national initiatives the question will the French government have a long term commitment to this program? There is a strong possibility that the next administration in Paris may be as hostile as the British towards foreigners or, once the elections are out of the way, the momentum is lost.

It would be a shame if the French commitment turns out to be fleeting. With France’s economy stagnant, like most of the EU, new industries and talent are essential to triggering growth.

Over the next few years the forces of protectionism and xenophobia are going to cripple many of the world’s economies and societies. Where these visas are in a year’s time will tell us whether France will be one of those nations that’s turned its back on the 21st Century.

Nov 172016
 

Then the robots came for the wealth managers…

While much of the focus on the effects of automation in the workforce falls upon manual, skilled and lower level clerical jobs, much of the impact of the next wave of automation will fall on higher level roles.

The rise of the robot financial advisor is a good example of this, as Finextra reports, Well Fargo bank has teamed up with fintech startup SigFig to automate wealth management.

Wealth management has been a lucrative field for banks in recent years however it has come with a reputational risk as poorly trained, incompetent or unethical advisors have pushed customers into investments more aligned with the staffs’ commission structures than the clients’ interests.

Given the costs and risks of employing well paid financial advisors, it’s understandable banks would be attracted to automating the function.

The problem for the banks is automated tools will commoditise the marketplace and almost certainly drive down margins.

So, along with the well paid jobs, the river of gold that was wealth management dries up for the banking sector.

Sep 182016
 

What would happen if the world’s richest people invested in startup businesses? Bloomberg Business ran an interesting, if flawed, thought experiment looking at how many nascent companies each country’s richest individuals could invest in.

It’s surprising how low those numbers are and, if anything, the result underscore how the 1980s and 90s banking sector ‘reforms’ caused the world’s financial system to pivot from its historical purpose of funding commercial enterprises into speculation, rent seeking and manipulating markets.

Apart from a smattering of venture capital not much has replaced the banks in funding the SME and entrepreneurial sectors, if anything it has been those ultra high net wealth individuals who have been financing the investment funds providing capital to entrepreneurs.

How the finance industry evolves in the face of the fintech boom and a world that’s slowly becoming less indulgent of the industry’s greed will be one of the defining things of next decade’s business environment. For the small business and startup sectors getting the funding right will also be a key factor.

The biggest question though is job creation, being able to fund new and innovative investments will be one a critical concern for societies dealing with the effects of an increasingly automated economy.

Sep 022016
 

US retail giant is to slash 7,000 back office jobs reports The Wall Street Journal as the company looks to focus on customer service. The process that’s seeing those jobs lost are part of a bigger shift in management.

The automation of office jobs isn’t new – functions like accounts payable have been steadily computerised since the early days of computers – but now we’re seeing an acceleration of white collar and middle management roles.

As increasingly sophisticated automation and artificial intelligence increasingly affects middle management roles, we can expect further changes to organisations’ management structures.

The opportunity to streamline and flatten management will be something company boards will have to focus on if they want to keep their enterprises competitive and responsive in rapidly changes markets.

For managers, there’s a lot more disruption to come for their roles. Those stuck in 1980s or 90s ways of doing things are very much at risk.

Aug 222016
 
building sydney as a smart city

There’s a mayoral election pending in Sydney and the talk of the city becoming a startup hub is becoming one of the issues.

Over the next few days I’m hoping to interview each of the four major candidates on their policies regarding how they see Sydney competing against the likes of Singapore and Shanghai, let alone San Francisco or London.

In 2009, I was working with the New South Wales state government on their Digital Sydney project which looked at how the state capital could become a global centre, one of the things we found was that the city had many of the attributes successful creative centres had – diversity, tolerance and access to talent.

That project died in the face of bureaucratic ineptitude but the idea still kicks around with last week’s launch of the NSW Government’s Jobs For The Future report which, despite its opening thirty pages of buzzwords and waffle, contains some serious analysis of the state’s reliance on inward facing service industry jobs.

Refreshingly, the NSW Government strategy looks beyond the current mania around tech startups based on the Silicon Valley venture capital model – something the Federal government’s Innovation Statement failed to do – and discusses how to encourage growth and investment in other emergent sectors both inside and outside the inner city startup communities.

While Sydney can be an attractive place to live for the digital elite, it falls down in a number of areas with property being among the most expensive in the world, telecommunications being costly and unreliable coupled with a complacent corporate sector and a stingy investment community.

Making the city more attractive is going to take a number of initiatives that including easing the cost of doing business, improving links between academia and industry along with tapping into Sydney’s diverse immigrant populations.

Some of these factors are within the City of Sydney’s purview but most of them are state or Federal matters. By definition this limits what local politicians can do.

Which doesn’t mean they shouldn’t try to do them and it’s good to see these topics have become issues in the local elections. For Sydney though, one suspects it’s going to business as usual until The Lucky Country’s luck runs out.