Category: Disruption

Could a robot put you out of business?

Automation, robots and artificial intelligence are threatening the future of many jobs and businesses

Transaction based businesses are in the firing line as robots and algorithms are taking over the tasks that are the mainstay of many service businesses.

In How To Know if a Robot Will Take Your Marketing Job, Gartner consultant Martin Kihn identifies two factors that indicate roles at risk of being overtaken by technology.

“The two dimensions relate to the things computers do best: (1) repetitive tasks, and (2) structured data,” states Kihn. “If you’re a knowledge worker, your biggest enemy is routine. To the extent your work is predictable, it’s codable . . . and you’re a target.”

Kihn describes a curve where repetitive, structured jobs are at risk of automation while at the other end are more abstract analytic roles which are relatively safe from the algorithms and robots.

will-a-robot-take-your-job

While Kihn is focusing on marketing jobs, his message is clear for all occupations and businesses – if your company makes most of its revenue from low skill, easily automated tasks then it is ripe for being overtaken by algorithms or robotics.

Even for businesses that are higher up the value chain, there are roles that can be replaced within the enterprise; a good example are the mining companies replacing high paid drivers with automated pit trucks.

There are even many management jobs that may be affected as artificial intelligence advances. Approving spending or hiring requests for example can be largely dealt with by algorithms with only the rare exceptional case requiring a manager to intervene.

So the executive suite may well be just as vulnerable as the lower status roles in an organisation.

MIT professor Andrew McAfee who Kinh quotes has been clear that we’re on the cusp of massive change in the workplace as robots, algorithms and artificial intelligence progress. It may well be there are far more jobs and businesses at risk than we think.

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Artificial meat and disruption of the cattle market

Cultured meat promises to disrupt agriculture as growing beef moves from the farm to the laboratory.

In thirty years ‘cultured meat’ will be commonplace and it will disrupt the cattle market Professor Mark Post warned the Northern Territory Cattlemen’s Association earlier this week.

Artificial, or ‘cultured’, meat is a dramatic change for the food industries and it promises, or threatens, to radically transform the cattle grazing business.

This is another example of an industry that wasn’t expected to be affected by change facing a radical transformation. It shows again few of us are immune from change.

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Prefabricating change in the construction industry

Prefabrication and 3D printing promise to radically change the construction industry.

One of the industries being dramatically reinvented by China is the construction sector as the nation’s demand on labor and materials puts stresses on the economy.

An answer local developers and builders have found to these constraints has been to turn to prefabricated construction.

While prefab building isn’t new, Chinese builders are pushing the techniques of designing, manufacturing and assembling the structures.

In Changsha, the capital of southern China’s Hunan Province, local construction company Broad Group built a 57-story building using 1200 in 19 days.

Coupled with large scale 3D printing and computerised design tools, the Chinese builders are redefining the construction industry with methods that are far more efficient and less labor intensive.

For companies, and countries, that depend upon the construction industry for employment and profit these techniques could be another disruption.

Again we’re seeing there are few industries immune from major disruption as technology changes business.

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Software eats the sports cameraman

Are sports TV camera operators the next occupation to be eliminated?

Since the beginning of industry technology has changed occupations in unexpected ways the demise of the sports TV cameraman is a good modern example of a highly skilled, specialised trade that may soon be redundant.

Years ago television studios largely replaced cameramen with remote controlled cameras but sports grounds needed skilled operators with excellent attention spans to video action at sports grounds.

At a lunch today in Sydney Michael Tomkins, Chief Technology Office of Fox Sports Australia, explained how a combination of high definition cameras and advanced software is changing the way sports are broadcast and recorded.

“Last year we put two 4k cameras in to cover the length of the ground,” Tomkins said. “Two 4k cameras can see the length of the whole ground so I get rid of four cameramen and replace them with one joystick bunny.”

“He moves a box around the screen and those become a virtual camera. The resolution of a 4k camera is four times that of our HD broadcasts. It’s quite cost effective and I don’t have to roll a crew out.”

A demonstration of how the technology works is in a YouTube clip of an Australian Rules football match from last year. While the ‘joystick bunny’ and the software is somewhat clumsy in the segment, the clip shows the power of the technology.

With abolishing most of the camera, the opportunity to rationalise the production suite also becomes possible; at present most sports events have a producer instructing a group of assistants to cut between cameras, prepare replays and all the other effects expected by viewers. With a software based system most of that labor and its skills become redundant.

Over time as higher resolution cameras become available this application is going to become common, in fact most junior and amateur sports will be able to afford static hi-res cameras for their ground that allows them to record their games.

While the demise of the sports cameraman and producers is a shame in the same way loom weavers and hansom cab drivers disappeared, it is a reflection of  changing technologies creating then destroying occupations.

TV camera image through wikipedia

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Will the tech industry beat the car makers?

Can Silicon Valley reinvent the motor industry or will others disrupt the market?

Despite the current hype over wearables and smartphones at Mobile World Congress, the real battle in tech is increasingly in the automobile industry; it’s no accident that smartcars were the start turn at the Consumer Electronics Show at the beginning of the year.

It may be however that the tech companies might take over the automobile industry as Timothy B. Lee in Vox suggests.

Lee’s argument rests mainly on the tech industry’s superior supply chain management – this is questionable as automotive manufacturing is several orders of magnitude in its complexity than PCs or smartphones – and the changing role of the motor car in modern society.

That latter aspect is probably the more crucial aspect, as car ownership falls and sharing vehicles becomes commonplace, design and manufacturing imperatives change along with the economics.

While it’s stating the obvious to say the incumbent automobile manufacturers currently have the advantage due to scale and experience, the same was said when Apple introduced their smartphone to compete against long established incumbents such as Nokia and Motorola.

Re-inventing the global automotive sector is a far bigger task than changing the smartphone or personal computer industry, although it certainly is going to happen. It may be though that Chinese or Indian groups end up dominating rather than Silicon Valley.

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Closing the video store

The rise and fall of the video rental industry is a cautionary tale of how yesterday’s hot new industry can become a dinosaur within a couple of decades.

The last video store in my neighbourhood is closing down. A few years ago there were six in the suburb.

Last year the US Blockbuster chain closed down its disk rental business and now the same thing is happening in Australia as people move from playing DVDs to streaming or downloading from the internet.

In a generation the video rental industry went from nothing to boom to nothing again; a classic case of a transition effect.

The rise and fall of the video rental industry is a cautionary tale of how yesterday’s hot new industry can become a dinosaur within a couple of decades.

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Where are all the salesfolks’ yachts?

Thinner margins for cloud services mean no more fat commissions for IT salespeople

“All the pieces are now in place,” President of Google At Work, Amit Singh, tells Business Insider in an interview about how the company’s enterprise offerings are competing in the marketplace and, perhaps most critically, undermining Microsoft’s Office products.

While Singh may be confident about Google’s products, the company’s earnings from its cloud services are trivial compared to its competition.

‘Other’ categories

Google don’t break out their income from their apps services, instead lumping it into ‘other’ revenues which also includes Google Play, Apps Engine and all their other non-search products. In the last quarter that was $1.9 billion, barely 10% of the organisation’s entire income.

Microsoft also obscure their office software earnings having split its products into the Devices and Consumer licensing division and Commercial Licensing however the last quarter Office’s income was reported it was a seven billion dollar a quarter business.

While Microsoft’s income from the various forms of Office will have shrunk in the shift onto the cloud, it’s still safe to say it still dwarfs Google’s income from Apps.

Google’s ‘other’ category is also a general bucket of products that is competing against Microsoft Office, Amazon Web Services and Apple iTunes – with a combined total of 17 billion dollars, ten times Google’s quarterly income.

Slim pickings

Another problem for Google are the margins in its cloud services, as Microsoft have found the profits from online products are very slim compared to those from boxed software or advertising. For Google to continue its impressive profits, it’s going to have to find something more lucrative than cloud office software.

These slimmer margins also have another effect on the business model as Singh would know well from this days of working at Oracle.

Oracle, like many of the 1980s and 90s software companies, boasted extraordinary margins. This allowed them to pay huge commissions to salespeople, engineers and executives. A single enterprise sale for an Oracle, IBM or SAP salesdroid could pay for a decade of private school fees or a very nice yacht.

At Google and its partners the idea of being able to pay off the mortgage with the commissions from a single corporate deal raises a hollow laugh; there simply isn’t the money to pay for armies of hungry salesfolk.

Those thin margins also mean a change to Google and Microsoft’s business models. Shareholders expecting big profits from cloud services may need to be looking elsewhere.

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