One of the popular topics among the curious minded is the coming robot revolution where, presumably, all work will be done by robots. A regular feature of the news is the story of how some function previously done by people is now being done by smart machines. The prevailing assumption is that the sort of manual labor jobs done by the working class will disappear over the next generations. That may be true, but it will not be the working man losing out initially. It’s going to be the office people who feel the pinch first.
In a report released this week by Cowen’s Andrew Charles, the analyst calculates the jump in sales as a result of the company’s new Experience of the Future strategy which anticipates that digital ordering kiosks (shown above) will replace cashiers in at least 2,500 restaurants by the end of 2017 and another 3,000 over 2018. Cowen also cited plans for the restaurant chain to roll out mobile ordering across 14,000 U.S. locations by the end of 2017 (we did not show that particular math, but the logic was similarly compelling).
“Things looked bleak for the Angels when they trailed by two runs in the ninth inning, but Los Angeles recovered thanks to a key single from Vladimir Guerrero to pull out a 7-6 victory over the Boston Red Sox at Fenway Park on Sunday.”
I think things have looked bleak for the angels at least since Milton published Paradise Lost, but things are now beginning to look bleak for grumpy columnists, and that is serious. Angels can look out for themselves.
The threat to all that is good and right in the world (consisting in large part of grumpy columnists) is that a computer wrote the foregoing tale of baseballian angst and triumph. Specifically, a program called Quill from NarrativeScience wrote it. Worse, it wrote it in about three seconds, and worse yet, it is bruited in journalistic circles that many major outlets are using Quill and various of its brethren to spit out a lot of their copy.
I find myself worrying that if they come up with a subroutine for bile, abomination, and sedition, I may be out of a job. Which I don’t have one of anyway. The logical problems of losing a job one doesn’t have are daunting.
Dear Bernie, as you continue in your never-ending “Fight for $15“, we thought you might benefit from a simple example of how economics work in a real life, functioning, capitalistic society. You see, Bernie, labor, much like your daily serving of crunchy granola, is just another “good” that businesses can choose to consume more or less of, depending on price. And, just to be crystal clear, when the price of labor (i.e. wages) increases, businesses tend to consume less of it. Finally, our dearest Bernie, when misinformed politicians radically disrupt labor markets by setting artificially high base prices, like your proposed $15 federal minimum wage, then businesses simply stop consuming labor completely and instead replace that labor with this “Big Mac ATM Machine.”
Say what?! A Big Mac ATM machine, where you can order real Big Macs, is coming to the Pru/Copley on January 31st. http://bit.ly/2jmOdwv
So, you see Bernie, pretty soon all those McDonald’s workers that you promised a “fair living wage” to make Big Macs, will have absolutely no wages at all courtesy of your “Fight for $15.”
Being as I am a curmudgeon, and delight in human folly and thoughts of huge asteroids, tsunamis, incurable plagues, continent-shattering volcanoes, and the Hillary administration, I follow the advance of robots with hope. They may finally end civilization as we know it. Currently they spread like kudzu. Herewith a few notes from my favorite technical publication, the Drudge Report. It may convince you that the robots are upon us like ants on a sandwich.
Navy building autonomous sub-hunting submarine. Robots deliver food to your door. China’s use of robots set to surge. Amazon uses 30,000 robots in warehouses. AMBER lab robot jogs like human. Japanese farming robots. Burger-flipping robot. World’s first sex-robot. China’s robot cop. China’s road to self-driving cars. Bloomberg uses robot story-writers. In theme park, robots make food and drinks. SCHAFT unveils new robot in Japan. Boston Dynamics has several ominous robots paid for by the Pentagon. Robot does soft-tissue surgery better than humans. Robotic KFC outlet in Shanghai. And of course everybody and his dog are working on self-driving vehicles.
People seldom click on links. This one, Atlas, from Boston Dynamics, is truly worth a click. Think of him coming through your door by night. Many similar critters exist, often in Asia.
The market for industrial robot installations has been on a skyward trend since 2009, and it is not expected to slow down any time soon. According to the World Robotics 2015 report, the market for industrial robots was approximated at $32 billion in 2014, and in the coming years it is expected to continue to grow at a compound annual growth rate (CAGR) of at least 15%.
That means between 2015 and 2018, it’s anticipated that 1.3 million industrial robots will be installed worldwide. This will bring the stock of operational robots up to just over 2.3 million, mostly working in the automotive and electronics sectors.
For how long can the global robot population continue to grow?
Robot Density
Perhaps the most interesting way to peek into the future of industrial robot installations is to look at potential sales in China.
Currently, the world’s most populous nation has a density of robots that is about half of the world average, equal to just 36 robots for every 10,000 manufacturing workers in China.
However, this is changing fast. It’s been the largest market for robots since 2013, and in 2014 the country bought 57,100 robots – the highest quantity ever recorded in a year. By 2018, one in every three robots in operation around the world will be in China.
What will happen if China’s density approaches that of other robot industrial centers?
Highly automated countries such as Germany, Japan, and South Korea all have robot densities that are multiples higher. South Korea, for example, has 478 industrial robots for every 10,000 workers – a ratio that is 13x higher than China’s.
With this kind of potential for growth, it’s clear that this is only the start of the robot story.
The risk of jobs being replaced by automation varies by country (credit: World Bank Development Report, 2016)
A new report from the Oxford Martin School and Citi considers the risks of job automation to developing countries, estimated to range from 55% in Uzbekistan to 85% in Ethiopia — a substantial share in major emerging economies, including China and India (77% and 69% respectively).
The Future is Not What is Used to Be provides in-depth analysis of the vulnerabilities of countries and cities to job automation, explores what automation will mean for traditional models of economic growth, and considers how governments can prepare for the potentially disruptive impacts of job automation on society.
47% of US jobs are at risk from automation, but not all cities have the same job risk (credit: Berger, Frey and Osborne/Citi Research report, 2015)
It looks like it may not be safe for millions of unskilled, low paid drones. The next couple decades may feel like getting dental work done by Szell for the burger flippers, retail clerks, and most liberal arts graduates currently working in the service industry.
If 80 million of the current 143 million jobs can be done by robots, the FSA could grow quite large. I wonder how the country would sustain itself with 70 million people working, while 200 million sit at home watching Jerry Springer?
Luckily for me I happen to be on the far left side of that chart where it is relatively safe. At least until this guy shows up some day to replace me.
Eighty million U.S. jobs are at risk from automation, a central bank official said Thursday.
In October, the U.S. employed close to 143 million people outside the farm sector.
Haldane added the jobs that are most at risk from automation tend to have the lowest wage. “In other words, technology could act like a regressive income tax on the unskilled. It could further widen income disparities,” he said.
He did allow that, in past experience, technological advances end up boosting demand for new goods from new industries requiring new workers.
“Yet the smarter machines become, the greater the likelihood that the space remaining for uniquely-human skills could shrink further,” Haldane said. He said what was previously unthinkable even a decade ago is now reality, like a driverless car.
Being a central banker, Haldane further pointed out that the narrowing of slack is having less impact on wages than in the past. “That might arise because technology has made it easier and cheaper than ever before to substitute labor for capital, man for machine,” he said.
He said the case for raising interest rates in the U.K. “is still some way from being made.”
