Just in time for the jobs report:
Robots will take over 45pc of all jobs in manufacturing and shave $9 trillion off labour costs within a decade, leaving great swathes of the global society on the historical scrap heap.
BofA Merrill Lynch now predicts in its new 300 page research tome that as soon as 2025, robots and AI will up-end the global economy in a $30 trillion per year whirlwind of “creative disruption.”
According to Oxford University, this could leave up to 47% US workers at risk of being displaced by technology over the next 20 years, with job losses likely to be concentrated in healthcare, food service, agriculture, shipping and eldercare – or in other words, the majority of the manual, low-paying jobs that have been created in the recovery years since the global financial crisis.
Not that white collar workers should feel left out. If you’re one of the +25M presently employed in law, finance, sales or medicine (really?), apparently the Bobs will want to be scheduling time with you folks as well.
Of course, this won’t apply to oil, gas and coal workers. (Who should be well established within their new careers as financial bloggers by that point.)
Not to channel Picketty on you and such, but BofA’s robot uprising, should it occur, will not exactly reverse growing inequality trends…
In fact, (if you lean GOP, now’s the time to cover your eyes…) it likely ensures Universal Basic Income as the only version of this where the 99% don’t end up in some 2050 version of Elysium-meets-Gangs-of-New York hell-on-earth.
Eternal deflation and the end of economics itself may be nigh upon us.
More on all that later.
-g
For more on the robot jobocalypse, go here and here
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Graystoke, first off, I’m really enjoying your writing, and props on putting yourself out there from the start. Glad I could be brought in at the same time you were. Great call on Varonis as well.
In regards to this post, I wanted to see what your thoughts were regarding Peter Thiel’s thesis in “Zero to One.” He posits that the economy and society will prosper and advance only if man and machine come together. Keep up the awesome work!
Thanks for the kind words.
In regards to Thiel, he’s brilliant. But its a flawed brilliance, IMHO, in that his philosophy, at times, lacks pragmatism and chooses to ignore certain realities about the world and how it works. There is a great deal to like about Thiel’s thinking, but a great deal more to question.
The success he’s seen from Paypal and the premier access he now receives for investment opportunities (Facebook, Palantir, etc…) can’t help but color his ideas with an optimism bias, and its present throughout much of his writing. Its not just about talent. Luck has more to do with success then most boot-strappers are comfortable admitting.
That said, I agree with his theory that making a real dent in the universe isn’t likely to come from incremental, me-too thinking. It requires boldness, and marketing matters. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.
In terms of the future, I think of my grandparents, and great grandparents. How they saw the world at my age, and how difficult it would have been for them to imagine the modern age. We’re probably in the same place today, as they were back then. The last 300 years has seen change on an exponential curve, and we may be on the precipice of even greater change in the next 20-50 years.
The danger is that exponential technical innovation is a two-edged sword. It gives the bad guys the same benefits of efficiency and scale. In our lifetimes, nuclear technology will be 100 years old! In that context, consider biotech. The potential for crispr/cas9 literally rewrites the rules of biology, but it also means a grad student with access to a lab and a steady hand can bioengineer a viral strain with 100% fatality rate.
(Some Australian scientists proved this 15 years ago with a mousepox strain that wiped out the mouse population that was about to overrun their continent. The folks from USAMARIID in Fort Detrick who attended the conference where the paper was presented were horrified. What they did could be immediately replicated with smallpox. Simply add distribution power of say, the common flu, mix in some ebola, add in the distribution power of the transcontinental airline networks and you have a serious problem on your hands. Check out the book Demon in the Freezer if you want a good think.)
Even though the probabilities are small, Theil doesn’t consider many grey or black swans into his thinking. Only a small number of Zuckerbergs and Jobs are going to create the monopoly-style businesses he’s espousing. What do the rest do as even the driving and fast food jobs are automated away? As a follower of Ayn Rand (who died penniless and on social security?) he likely opposes everything about UBI, yet without it, will society descend on a greater scale into the chaos we witnessed in Ferguson Missouri and New Jersey last year?
Like stocks, it seems society is operating on a combination trap-door/ejection seat…we could go either direction, and in a big way. (Perhaps one before the other, or both at the same time!) Yet, I’m sure my grandparents felt the same way about the future back in their day.
In the end, the world is far better off with Peter Thiel in it, he challenges our thinking.
Best,
-g