Laurent Haug's newsletter, issue #13

Revue
 
This week: where humans will fit in an increasingly automated world, more on how the block chain will
Revue

Laurent Haug

May 31 · Issue #13 · View online
News and thoughts on society's ongoing transformation.

This week: where humans will fit in an increasingly automated world, more on how the block chain will disrupt society, robot cars, robot doctors, and a 3D printer to make your own clothes. Welcome to this week’s new subscribers (now 560+!), and if you received a forward of this message don’t forget you can subscribe and see archives here.

Machines vs jobs
This is one of the big questions I see come back again and again: what are the downsides of the digital revolution in terms of employment and income? Which jobs will remain after machines have automated a growing list of increasingly complex tasks? While it seems everyone agrees that technological progress makes the pie bigger, there is no economic law ensuring that it benefits everyone equally. So where are digital technologies taking us? Will computer take more jobs away that they will create?
Erik Brynjolfsson and Andrew McAfee of the MIT Sloan School of Management gave a recent interview to the Harvard Business Review on what they see in US numbers (a decoupling between productivity and wages), where humans will always beat robots (high-end creativity, emotion, dexterity, nurturing), the types of jobs that won’t be automated, and what kind of environment governments should create to fall on the positive side of the digital revolution.
Productivity increasing, wages not following:
Let’s look at the four key measures of an economy’s health: per capita GDP, labor productivity, the number of jobs, and median household income. When we studied the U.S. data on all those metrics, we turned up an intriguing story: For more than three decades after World War II, all four went up steadily and in almost perfect lockstep. […]
In the 1980s, however, the growth in median income began to sputter. In the past 15 years it’s turned negative […] This phenomenon is what we call the Great Decoupling. The two halves of the cycle of prosperity are no longer married: GDP and productivity have remained on an upward trajectory, but the income and job prospects for typical workers have faltered.
Why is this decoupling happening?
As computers get more powerful, companies have less need for some kinds of workers. Even as it races ahead, technological progress may leave some people—perhaps even a lot—behind.
For other people, however, the outlook is bright. There’s never been a better time to be a worker with special technological skills or education. Those people can create and capture value. However, it’s not a great time to have only ordinary skills. Computers and robots are learning many basic skills at an extraordinary pace.
Not all types of jobs are disappearing
Technologies such as payroll-processing and inventory-control software, factory automation, computer-controlled machining centers, and scheduling tools have replaced workers on the shop floor and in clerical tasks and rote information processing. By contrast, big data, analytics, and high-speed communications have enhanced the output of people with engineering, creative, and design skills and made them more valuable. The net effect has been to decrease the demand for low-skilled information workers while increasing the demand for highly skilled ones.
Where humans are still superior
1) jobs involving high-end creativity, that generate things like great new business ideas, scientific breakthroughs, novels that grip you, and so on. Technology will only amplify the abilities of people who are good at these things.
2) emotion, interpersonal relations, caring, nurturing, coaching, motivating, leading, and so on.
3) dexterity, mobility. It’s unbelievably hard to get a robot to walk across a crowded restaurant, bus a table, take the dishes back into the kitchen, put them in the sink without breaking them, and do it all without terrifying the restaurant’s patrons. Sensing and manipulation are hard for robots.
What kind of environment should governments build to get the best out of digital technologies?
1) education. Primary and secondary education systems should be teaching relevant and valuable skills, which means things computers are not good at. These include creativity, interpersonal skills, and problem solving.
2) infrastructure. World-class roads, airports, and networks are investments in the future and the foundations of growth.
3) we need more entrepreneurship. Young businesses, especially fast-growing ones, are a prime source of new jobs. But most industries and regions are seeing fewer new companies than they did three decades ago.
4) immigration. Many of the world’s most talented people come to America to build lives and careers, and there’s clear evidence that immigrant-founded companies have been great job-creation engines. The current policies in this area are far too restrictive, and our procedures are nightmarishly bureaucratic.
5) basic research. Companies tend to concentrate on applied research, which means that the government has a role to play in supporting original early-stage research. Most of today’s tech marvels, from the internet to the smartphone, have a government program somewhere in their family tree.
Education, infrastructure, entrepreneurship, immigration, all are themes I brought to the attention of the Swiss government when I presented my comments on their digital strategy in April. I missed on the basic research bit though, as Bruno Giussani rightfully pointed in his feedback, directing me to this TED talk where innovation economist Mariana Mazzucato makes a point that “the state — which many see as a slow, hunkering behemoth — is really one of our most exciting risk-takers and market-shapers”.
To read the full interview, point your browser to hrb.org
Potential digital transformation by industry
Echoing with last week’s Digital Transformation Manifesto, I found this graph in a Bain article trying to quantify several interesting things, namely:
  • how much an industry has already embarked in its transformation
  • how much more transformation is yet to come
  • how much transformation will be needed overall
I have no idea how this is measured, and by definition these figures must be taken as rough, high level indicators rather than science. Still makes for a few interesting thoughts:
  • some industries (media, tech, telecom) are already quite far ahead in their transformation, with much more to come
  • still major opportunities in sectors like insurance, auto, education, medtech, as the majority of changes is ahead of us
  • definitely a few industries that won’t really have to change much: oil & gas, mining
  • very surprised to see construction last, perhaps because 3D printing is not considered a digital innovation? Seems to me this sector will see tons of changes in the coming years.
The article makes an interesting point about how “what matters most to every company, of course, is how fast it is moving relative to others in its industry”. Definitely something that people like me tend to often overlook, and a fact behind which many executives hide, saying “our competitors are lagging behind as much as we do”. Quite a hard balance to find between the need to change and the realities of running a business on a daily basis.
My block chain education (continued)
I have to be honest and say I missed how big the block chain is. I mean, I knew it was important, but I missed it was in fact huge. I’m lucky I’m surrounded by people who keep pounding it on me, and I’m starting to see how this new way of computing could radically change a large number of industries. Here is an article that explains why the block chain is powerful, and gives a few concrete examples of what could be done with it. Some of these should leave your head spinning (just the concept of “decentralized autonomous organizations” could be discussed for hours), and on my side one question still remains: why was that thing not invented earlier?
Analysts estimate that the blockchain, using current processing volume, can save over $100 billion annually relative to traditional payment infrastructure […]
The most dramatic example of the cost and time savings within the payments industry is international remittance. Here, the cost could be reduced from 10% (or more) to 1% with settlement from five days to 10 minutes […]
Unlike with traditional payments infrastructure, there are no base or minimum fees for payment using the blockchain […]
Blockchain technology could also function as the backbone of a peer-to-peer insurance platform. […] An association of ship owners and operators effectively insure each other, might one day be amenable to using the blockchain to be its enforcement mechanism […]
Block chain will enable so-called decentralized autonomous organizations – delivering insurance coverage with the cheapest possible premiums.
A key feature of the bitcoin blockchain is that it can prove that an agreement existed at a certain point of time by being hashed into the blockchain. This can be used to establish peer-to-peer contracts. If you and your counterparty both sign the contract using your private key, the contract is in force [which] also means that we might one day be able to get rid of the antiquated notary public profession. […]
[For intellectual property] the blockchain can also be used to timestamp and store work and demonstrate ownership of data without exposing the underlying data. […]
Wills could be automatically executed with assets transferred as specified by the owner upon death. No probate, no lawyers, no estate administrators, no ambiguity, and no opportunity for interested parties to dispute it. […]
[On democratic voting:] there can be an accurate and near real-time vote counting, not to mention less time and expense wastage on manual counting and recounting.
% CEOs on social networks
Facebook definitely not the place to be for the surveyed executives (CEOs of the top 50 companies in the 2014 Fortune Global 500 rankings). The first line - “Social networks NET” - is the overall % of CEOs using social media, regardless of the platform.
Megatrends
Google sees more searches now on mobile than on desktop
IBM's Watson could diagnose cancer better than doctors
Here's your first look at Uber's test car
These 'freelance spies' are recording conversations around New York City
#wtf
In Chongqing, China, with a degree of seriousness that has yet to be determined, the city authorities have designated a 30 metre cellphone lane for people who use their phones while walking.
Startups, gadgets and tools
Sunnycase, solar powered phone charger and case
Autopilot, marketing automation software
Lark, (robot) coach and nutritionist
The Heineken door lock
Surveillance Spaulder
A Pair Of Running Shoes That Lets You Run 25 Miles Per Hour
Propeller Health, mobile platform for respiratory health management
Electroloom, 3D printing applied to clothing
Wisdom
“Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.”
Biz Stone
“I walk slowly, but I never walk backward.”
Abraham Lincoln
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Carefully curated by Laurent Haug with Revue.
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