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Posts Tagged ‘jobs’

We noted in our previous post how Elkhart, Indiana now leads the nation in robots per capita.  That opened us up to the broader topic of just where robots do, and don’t fit best.  We noted how analyses reported on by The Wall Street Journal found that the most successful robot-implementing companies have found it best to assign “repetitive, precise tasks to robots, freeing human workers to undertake creative, problem-solving duties that machines aren’t very good at.“

The big question becomes, do robots displace workers, or do they simply take on more of the “repetitive tasks” so that humans can handle the higher-value work?  In other words, do companies and their employees win or lose?

It turns out that at places like Robert Bosch in Germany and at BMW here in the U.S., letting robots take on the strenuous, dangerous and repetitive tasks have led to all-around benefits.  For example, over the past decade of automation efforts, BMW has doubled its annual auto production at it Spartanburg, S.C. plant, while more than doubling its workforce – all while handling vastly more complex autos with five times the number of parts previously used.  Clearly, that’s a win-win, both for the company and its employees.

Tesla has struggled a bit more with production of its Model 3 in Fremont, CA.  There, the use of robots reportedly got “out of hand” and caused production bottlenecks, thus halving the number of cars that could be produced each week.  One key mistake was for Tesla to try to automate much of the final assembly work, where everything has to come together.  Put simply, they learned, automating in final assembly doesn’t work.

In the end, it is reported that robots have resulted in pay cuts for low-skilled machine operators and they have eliminated positions in some occupations, like simple manufacturing, especially where there aren’t value-added jobs for those workers to move to.  For example, mining giant Rio Tinto is laying off drivers as it implements self-driving trucks which can operate longer than humans and are more reliable.  Underground, robotic drilling rigs have taken over the dangerous work of inserting explosive in shafts.

Similarly, garment and footwear workers are losing their out to technological breakthroughs made on robots that increasingly have taken on more delicate tasks like manipulating pliable fabrics.

But at an “aggregate level” the jobs created by automation outnumber those being destroyed, according to analysis done at M.I.T.  It’s just that those losing jobs are not necessarily the ones who are gaining those new jobs, as different skills are usually required.  In the U.K. for example, 800,000 lower-skilled jobs have been lost to automation in the past 15 years, but automation has created 3.5 million higher-skilled ones, according to Deloitte.  In Germany, industrial employment will rise nearly 2% by 2021 because robots are making the country’s factories more competitive.

The key, of course, is training.  While indeed many newer, better, safer, less tedious an better paying jobs will be created by this current onslaught of automation, the challenge to businesses, schools and nations will be in how quickly they can adapt to this changing landscape and create the training programs, education and internships that will be required to handle this inevitable wave of innovation.  It’s a challenge for everyone, and few jobs will be immune – but the ingenuity required and unleashed are sure to fulfill the dreams of the next generation for the course of the 21st century.

 

 

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According to Kiplinger’s, Elkhart, Indiana leads the nation in most robots per capita.  Elkhart has seen “a boom in manufacturing related to the city’s thriving bus- and RV-making industries,” noted The Kiplinger Letter in its March, 2018 issue.

With a strong economy giving rise to increased demand for RVs and cities ordering new business now that finances have improved, denizens of Elkhart are employed to the max and they, and the factory robots, are busy working overtime.  Kiplinger’s notes how Elkhart’s “tech-savvy workforce is drawing more manufacturers to the region, including boat builders,” and concludes with the comment that it’s a success story “other regions will be trying to emulate.”

Meanwhile, as The Wall Street Journal reports recently, robots are taking over some of the jobs that, frankly, you’d want them to.  Like picking up scalding-hot auto parts from an oven and inspecting them for safety, as happened at a Robert Bosch plant in Germany.  Not only does the robot reduce exposure to serious injury to the human worker, but that human worker now has the time to test 20% more parts than he did before the robots arrived.

So which industries are helped the most by automation, both for the employer and the employee?

Those who have, in the words of Journal editor William Wilkes, “cracked the code” are those that “can assign repetitive, precise tasks to robots, freeing human workers to undertake creative, problem-solving duties that machines aren’t very good at.“  That means, in short, manufacturing, the food sector and certain service sectors jobs such as billing, where time spreadsheets can be automated, freeing up workers to do higher-value tasks.

None of the above should come as a surprise, logically speaking.  Bosch factories worldwide how use 140 robotic arms, up from zero just 7 years ago, and as a result, an engineer there said “We can’t see robots having a negative impact on our workforce.”

As it turns out, robots and computers are best suited to repetitive – even if very highly or complex math-based – tasks, from playing chess or repeating a set of precise movements, while they pale in comparison to humans in the seemingly mundane tasks like brushing your teeth or running through the woods.

In the end, tasks best left to humans remain those that require involving judgment and quality control, while leaving the heavy lifting – often, quite literally – to the machines.

In our concluding post on robots in industry today, we’ll take a quick look at where they’ve made most sense, and what impact they’ve had on employment and the types of jobs they are creating today.  So, stay tuned…

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As machines get smarter, will jobs become increasingly scarcer?  That’s the fear of many, including some economists.  And while yes, some jobs will be lost, those with the right skills will partake of the silver lining of smarter machines and the future of artificial intelligence.  According to an article in the April 30th issue of The Wall Street Journal, AI “opens up opportunities for many new jobs to be created — some that we can imagine and many we probably can’t right now.”

For those who tool up, the Journal expects the following list of jobs to be among those that will benefit from our smart new future.

  1. AI Builder. Case in point: iRobot, a maker of robotic mops and vacuums has quadrupled its staff of software engineers focused on consumer robots, making robots smarter through advanced AI and computer-vision systems.  Many of these are Ph.D.-level scientists, so they’re certainly not Everyman-style jobs, and so the company has expanded its talent search to a global effort.
  2. Customer-Robot Liaisons. People are going to need help easing into working with robotic systems, and this role is currently among the most sought-after AI-related positions according to jobsite ZipRecruiter.  Ensuring clients are happy with robots that have been rented out as security guards on a graveyard shift is the job of one 36 year-old at Palo Alto’s Cobalt Robotics.  The trick, they say, is to get a “good handle” on how comfortable clients are interacting with robots by monitoring usage reports, interacting with customers through calls, texts and visits, and (what else?) building relationships.
  3. Robot Managers. While robots can be amazingly smart, their judgment and the judgment within the AI realm generally, is lacking when compared to humans. Ditto for empathy, customer relationships and a myriad of other soft skills.  The need for human oversight might be the most underestimated part of all according to one McKinsey partner who focuses on automation.
  4. Data Labelers. For AI to understand the world, it needs humans to explain what things are. That means labels.  Identifying objects in images or parsing sentences may be things we humans take for granted, but robots will need our help.  Self-driving car developers, for instance, can have hundreds of folks labeling data.  Sometimes it’s simple, sometimes it’s subtle.  Posters and pictures around an office may seem like trespassers to a robot, and they need to be ‘taught’ that these are not potential threats.
  5. Drone Performance Artists. Drones are becoming more and more a fixture in the film world, flying props, handling lighting and providing overhead shots at sporting events.  Artists who can customize them to suit the needs of different performances like concerts, musicals, circuses and sporting events are increasingly in demand.  Said one such artist, “It’s a crazy opportunity because I have a blank slate and can develop whatever I want this field to be.”
  6. AI Lab Scientists. Smart software is remaking drug development, sifting through vast troves of data faster than humans to come up with new directions for medical research.  Data scientists like computational biologists can help AI systems learn so that computers can surface novel ideas, with human technicians also testing the AI results to see which are valid and which are not.  The feedback they give AI machines only serves to make them smarter.
  7. Safety and Test Drivers. Self-driving vehicles are not there yet, in the opinion of industry insiders, but they are expected to spread slowly across the automotive landscape.  That provides opportunities for people to help the vehicles do their jobs safely, and take over when necessary.  Testers today provide feedback to manufacturers when a vehicle encounters a situation it’s unsure how to handle.  One company doing so is tripling its number of testers, and hiring test engineers to devise scenarios for shuttles, not to mention maintenance, testing and cleaning crews.

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The influence of technology in areas from retail to manufacturing is frequently blamed for everything from income inequality to the bifurcation of America.  But as the statistics show, nothing could be further from the truth.

And the truth is…

  • In E-commerce… brick and mortar employees today perform many of the same tasks as their predecessors in the 1980s, and their real wages reflect that lack of change. In fact, they earn about the same today in inflation-adjusted dollars as they did then.  Meanwhile, workers in e-commerce fulfillment equipped with tech tools and better information earn, on average, over 30% more than their brick-and-mortar counterparts (according to researchers at Progressive Policy Institute).
  • Over the past two years, brick-and-mortar employment has fallen by about 1%, or 123,000 jobs, while e-commerce has added 178,000 jobs. If you add in the new wave of express delivery workers required today, it adds another 58,000 jobs.
  • While e-commerce employment will continue to soar, increased automation of fulfillment centers will bring down distribution costs which today have been estimated to be as much as half of the final purchase price on a wide range of consumer goods. Driving down those prices of course helps customers.
  • And that fulfillment automation will then lead to changes in manufacturing too. When individual items can be sorted and delivered inexpensively, the economics of small-batch and custom manufacturing become ever more attractive and persuasive.  It’s also likely these small-batch custom manufacturers will be located closer to the ultimate consumer.
  • We’re fast moving into an Internet of Goods era, states Michael Mandel, a senior fellow at the Mack Institute for Innovation Management at the Wharton School, in an article he wrote in the October 16th issue of The Wall Street Journal .
  • And finally, if e-commerce is the indicator we think it is, tech-savvy jobs that simply require workers who “have a good mix of physical and cognitive skills, just the like the industrial jobs of the early-20th century” will mean plenty of jobs for folks that don’t have a college education. It’s all just an example once again of how the march of progress, while not a straight line, inevitably replaces old jobs with newer, better-paying ones.

And the real lesson in all this?  For the willing, tech is your friend, and it will be your future.  It will be the source of more and more (and better-paying) jobs.  It’s nothing to fear.  But it is something to learn.

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In our prior post we noted tech writer Greg Ip’s recent comments in an article in The Wall Street Journal, pointing out the little-known fact that automation today is actually creating more jobs than it is displacing.  We noted in particular the retail and banking sectors which, counterintuitively, have employed technology for their own gains, but in the process actually created greater hiring of people, due to the increased productivity that such automation has created.  Let’s continue to illustrate…

James Besson, an economist at Boston University created an early desktop publishing program in 1983 that great simplified typesetting and graphical design.  When Sears purchased his program, it eventually laid off 100 employees, and Mr. Besson worried about those job losses.

But it turns out customers used his software to expand the number of variety of their publications.  Supermarket chain A&P used it to publish dozens of versions of circulars in Atlanta with different promotions for different neighborhoods.  Mr. Besson learned that while typesetting jobs fell by about 100,000 in the 1980s, the number of designers eventually quadrupled to more than 800,000, making up for the losses many times over.

Of course, the disruption was still devastating to those whose jobs were lost.  The people displaced by automation – then as now – are rarely the same people employed in the new industries made possible by the new automation.  But over time, the net effect has been shown to be consistently positive.

Today, retail is the largest industry being displaced.  Yet evidence is beginning to show that e-commerce has probably added to overall employment.  While over the past decade about 140,000 jobs have been sliced from brick-and-mortar displacements, according to think tank Progressive Policy Institute, about 126,000 have been added in the e-commerce space.  However, that fails to count warehouse and fulfillment job gains, which have increased by 274,000 jobs during the same period.  And, they note, those jobs pay about 30% better than the ones they displaced.

As the WSJ’s Ip points out, this begs the question: “If online retailers, based on sales per employee, are much more productive than regular retailers, how can they on net add to total retail employment?  And how can they both pay more and keep prices low?”

Ip says the answer is complicated, but it comes down to this: E-commerce doesn’t just sell the same product as a store did at a lower price.  It “enables customers to peruse a vast array of products and select precisely the one they want and have it delivered in a day or two, saving the time, cost and inconvenience of visiting multiple stores.”  It’s estimated that saves the average adult about 15 minutes a week and uncovered the hidden demand for shopping from home.

None of this adds to price.  It simply results in people consuming more retail services, once adjusted for improved quality, than before.  Then, the e-commerce suppliers spur demand by using their greater efficiencies to absorb more of the delivery costs.  Amazon uses the margin it earns on goods to build and operate the logistics centers needed to profitably serve customers – and those centers are creating ever more jobs than they displace.  The day when Amazon will need fewer humans appears far off.  In fact, last month Amazon in a one-day nationwide job blitz accepted 100,000 applications and has already made 40,000 job offers.

The e-commerce boom is as real as the brick-and-mortar decline.  But the job displacements are turning out not to be doom and gloom, as the new jobs prove greater in number and pay than those displaced.

Just as it’s been happening for at least 500 years.

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For all the fears about lost jobs and the sea changes occurring in manufacturing and retail as the Internet changes everything in its path, it’s worth noting that each successive transition in society’s economic underpinnings – be it farming or steam engine, industrial revolution or information – eventually disrupts everything around it and then, inevitably, produces more opportunities, different challenges and, ultimately, more (and newer) jobs.  The Wall Street Journal’s tech writer Greg Ip points this out in a recent article.

Ip points out that as Amazon grows (and a few others), tens of thousands lose their jobs in retail.  Stores close across the community, state, country, and world.  But then again, to cite one of Ip’s examples, workers in former textile towns like Fall River, MA, find new beginnings.  There, Amazon planned to hire 500 workers for a new fulfillment center last year.  Already employment there has soared to 2,000.  And workers there are earning more than at previous retail jobs.

The demise of brick-and-mortar has been accompanied it seems by the less well-publicized boom in e-commerce that has actually created more jobs in the U.S. than traditional stores have cut.  And those jobs, it turns out, pay better because workers there, augmented by the latest in software and hardware technology, are so much more productive.

Throughout history automation often creates more jobs – and better-paying ones –than those it displaces.  Ip points out the critical reason, a point often lost in all the bad press and noise:

“Companies don’t use automation simply to produce the same thing more cheaply.  Instead, they find ways to offer entirely new, improved products.  As customers flock to these new offerings, companies have to hire more people.”

The underlying angst over job displacements goes back 500 years as each successive new generation of revolutionary technology displaces the former, along with its adherents and workers.  It is interesting to note that in 1589 Queen Elizabeth I refused to grant the inventor of a mechanical knitting machine a patent for fear of putting knitters out of business.  More recently, in the 1930s economist John Maynard Keynes warned of tech unemployment due to the modern ability to economize the use of labor faster than new users for labor could be found.

These fears have repeatedly proven baseless.  When ATMs first appeared in the 1970s it was thought to lead to fewer branches and fewer staff.  Wells, Fargo itself predicted as much for the new cost-cutting technology initiative.  And indeed, the average branch used one-third fewer workers by 2004.  But… ATMs made it so much cheaper to operate a branch that banks ended up opening 43% more branches!  The result: today, banks employ more tellers than they did in 1980 and those jobs have expanded into more interesting roles that ATMs can’t duplicate today, like “relationship banking.”

We are in a watershed period for technology, with its pace increasing steadily.  This is scary stuff.  People are rightly concerned.  But if the past is prologue to the future – and it often is – there will once again be silver linings.

This topic is, we think, important enough to extend into a follow-up post, which we’ll do in our next one. Stay tuned…

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… of jobs being lost to the new wave of automation, robots and artificial intelligence, total aggregate employment in our nation continues to increase relentlessly, even with bumps along the way.  In other words, robots are not going to steal all our jobs.

With Elon Musk recently warning that robots will “do everything better than us,” and a 2013 paper from the Oxford Martin School claiming that 47% of all jobs are at high risk of falling to computerization in the coming decades, the fact is that jobs are constantly changing, shifting and evolving.  It’s nothing new, and it’s nothing that we – especially those involved in U.S. manufacturing – need panic over.

A recent analysis by the Information Technology & Innovation Foundation quantified the rate of job destruction and creation for every decade going back to 1850, based on census data.  Among other things the report showed that 57% of jobs that workers did as recently as 1960 no longer exist today (adjusted for workforce size).  The largest losses were suffered among office clerks, secretaries and telephone operators.  That’s a lot of Mad Men era folks out of work, right?   And let’s not forget elevator operations, bowling pin setters and gas station attendants.

The point is, we have a long tradition of losing jobs due to automation, but invariably we see new jobs take their places.  More often than not today, robots, artificial intelligence (AI) and the like are often automating discrete tasks more than they are jobs.  By 2055, McKinsey predicts, more than 50% of all work-related tasks will be subject to automation.

So why, with this long history of job attrition, do some continue to insist that the sky is falling, or that this time is different… that we are headed to some jobless future of mass unemployment?

The gist of the doomsayers’ argument voiced by many futurists and experts, according to a recent article in the Wall Street Journal (7-22-17) seems to be that the new wave of AI computers and robots can “do virtually any job that humans can do, so everyone’s job is on the chopping block.”  AI is getting so intelligent, the logic goes, that it’s smart enough to recognize cats, drive cars, identify cancers and translate across languages, notes the Journal.  So won’t it soon be capable of doing anything a person can?

Not so fast.  What these tasks have in common mostly is finding patterns within large data sets.  It would be a mistake to extrapolate from this big data analysis some giant leap in duplicating human intelligence.  Today’s AI is often just straining through massive bits of data, whether it’s recognizing a face or putting bunny ears on your selfie.  They are no more a threat to “human primacy” says the Journal, than “automatic looms, phonographs and calculators, all of which were greeted by astonishment and trepidation by the workers they replaced when first introduced.”

Moreover, as wealth continues to increase (as it historically always has) those consumers are likely to allot a growing share of their income to personal services, the very sector where face-to-face interactions are critical to the value delivered.  Says the article’s author, Stanford AI Professor Jerry Kaplan, “the irony of the coming wave of artificial intelligence may be that it heralds a whole new era of personal service.”

And that means: plenty of jobs.  After all, once over 90% of us were farmers; today it’s 3%.  And unemployment is near an all-time low, while employment is at an all-time high.  Meanwhile, standards of living around the world continue to improve as we shuffle jobs from one category to another in the familiar cycle of creation and destruction.

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