A Few Notes
For simplicity I will refer to the large umbrella of AI-automation and robotics as AAR, as the former is a mouthful. My definition is inclusive of nascent automation software already available up to sophisticated physical robotics driven by artificial intelligent programs; and everything in-between.
When discussing AAR, it’s surprisingly easy to go down a rabbit hole of the philosophical implications on society and civilization which can oftentimes paint a dystopian picture. These conversations are important to have, however I am more interested in discussing what I perceive to be near-term implications (5-20 years). Although AAR is a transformative power in the global economy, this post is written from an American perspective.
Finally, this is not an academic paper. It is a personal opinion piece written in my spare time.
The Revolution
The automation revolution currently underway is referred to as our generation’s industrial revolution; parallels are often drawn between these two disruption events. Drawing these parallels may in fact be inadvertently leading to a dangerous false sense of security whose byproduct is a lack of urgency in developing skills in areas not anticipated to be automated within the next decade.
The industrial revolution brought about the development of modern machinery that in many ways enabled a dramatic evolution in humanity. At the time there was a genuine concern that given this new “mechanization” workflow, the workforce would become obsolete. If machines were capable of doing what human beings could do and far more efficiently, what would become of human beings?
Fast forward to today and looking back retrospectively we saw that many roles threatened by the industrial revolution did in fact disappear. What was unexpected at the time was the degree in which the variety, quantity, and velocity of new jobs would be created. As we moved into the mid-20th century, technological progression leading to the development of the modern semiconductor and thus modern computing, altered life so dramatically that jobs inconceivable in previous decades were rapidly created.
When discussing the impending displacement of what some analysts predict to be upwards of 50% of jobs in the coming decade, we must embrace it with open arms while simultaneously incentivizing the development of skills in areas not easily automatable and/or that contribute to a seamless adoption where that is not the case. The industrial revolution is often used as a rebuttal shielding concerns that there is nothing to see here, new jobs will be created and the masses will prosper. I am vehemently against this notion and find it’s core argument duplicitous for the following reasons:
1. Unlike the industrial revolution, in AAR the core premise initially requires less-than-traditional human capital, but as it continues to improve itself over time via independent and self-sufficient learning, it will require even less and theoretically none.
2. Not only is the implementation of AAR more beneficial to revenue generating companies from a quantifiable productivity standpoint, but the minimization of nonproductive roles is beneficial in cost reductions associated with salaries, health insurance, paid vacation, office space, etc.
3. The growing social and economic problems plaguing the United States are inadvertently building a strong case to mitigate the increased disruption companies are facing. I can speculate that quiet quitting, unionization, and fast-food minimum wages are expediting the obsolescence of many roles.
4. The disruption caused by the 2020 pandemic resonated with companies in a large way and resulted in an expedited journey towards AAR that definitionally work in environments unsafe for human beings.
My father described this in his 1989 book Process and Design for Manufacturing:
“Reasons for robots: to work in hostile environments, to perform dull and monotonous jobs, to work during unfavorable hours, to provide consistency.”
5. The context of the global environment has changed dramatically since both the industrial revolution and WWII: the United States no longer exists in a silo. The cost reduction associated with the productivity stemming from AAR adoption at a global scale will help determine the next generation of winners and the next superpower.
Case Study 1: California Fast-Food Workers
California legislatures are pushing a bill raising the minimum-wage for employees at fast food chains with greater than 100 locations. This is being hailed as major progress by many, but I suspect the outcome will come bearing unintended long-term consequences. For example, McDonalds is arguably one of the world’s most efficient organizations in terms of pricing strategy: they are hyper-aware that an increased cost associated with this bill cannot be passed onto their customers, who are among the most price sensitive. McDonalds has already shifted its ordering process to automated kiosks, which beyond streamlining the ordering itself, act as a pivotal component in the supply chain automatically notifying suppliers of inventory levels. The efficiency gained has likely resonated with them; implementing this technology in every U.S. store is evidence of that. Simultaneously as this is happening, the VC world is funneling money into robotic kitchens. It shouldn’t be that difficult to extrapolate out where this leads. McDonalds should, will, and likely is developing a plan to adopt more AAR into their stores, swallowing up the initial cost with a deep understanding of long-term increased productivity that can maintain and potentially lower customer prices. In fact, this year Chipotle launched its first venture fund. Their most notable investment is Hyphen, kitchen automation hardware and software.
Case Study 2: Amazon Supply Chain
Amazon is a role-model for the adoption of automation and robotics, they employ 500k+ robots in their warehouses which has played a significant role in propelling them into their coveted role as the global logistics leader in a way that was incomprehensible a mere decade ago. They understand the robotics value proposition better than anyone else. Increasingly Amazon is faced with discontent employees at various stages in their supply chain, noting unrealistic expectations resulting in an increased support for unionization. This discontent over aggressive goals can likely find its origins in the United States’ purchasing and consumption patterns: a demand for a more diverse variety of items that are delivered quicker. Left with the possibility of unions demanding less-aggressive goals thereby dampening the ability to keep up with demand, Amazon must innovative new ways at bypassing its current challenges to grow alongside an increasingly impatient customer base. Earlier this year, Amazon announced the launch of its first venture effort, the $1 Billion Industrial Innovation Fund investing in fulfillment operations, logistics, and supply chain solutions. Their portfolio consists exclusively of AAR. Their investment in Mantis Robotics is of particular interest in that they build robotic arms with high dexterity. In fact, the promotional video on Mantis’ website depicts their product packing boxes with small items in what appears to be an automated fulfillment center.
The Collar Color
Public discourse around AAR almost always focuses on blue collar jobs; it seems to be a more palatable narrative in suggesting that white collar workers are untouchable. Blue collar roles such as truck driving, warehouse work, and roles in similar capacities are and will continue to be automated: that is obvious. However, I believe we are potentially experiencing a precursor to what could be the mass dissolution of generic office work. If true, I find this positive as definitionally generic office work is monotonous, dull, and requires little to no analysis. Additionally it can and does detract productivity from an end-to-end process. These roles span sectors from healthcare to finance and everything in between. This theoretically should free up resources for an organization’s talent to focus on tangible value creation and innovation.
In fact, even roles that focus on analysis are being challenged as relatively intelligent software has already found its way into leading organizations simultaneously as there is a gold rush of sophisticated data science platforms being developed with the clear intentions of driving the decision making process of any given detailed task or large strategy. These technologies currently work alongside humans and I expect that to continue, emphasizing the need for those with skills capable of building, using, and understanding these software products.
Social & Economic Impact
It can be expected that companies adopting AAR as an integral part of their businesses are set up, but not guaranteed, to increase productivity in a dramatic way. I suspect that over the next decade we will witness increased and potentially more aggressive negative discourse as definitionally jobs will be lost.
Regardless of what I anticipate to be political ping-pong battles; I believe it is important that the United States quickly and efficiently adopt AAR agnostic of sector, as to remain competitive on a global scale. I am neither a policy maker nor work in the department of education to define guidelines on how to mitigate job losses, but I believe the most logical solution could be a country-wide effort towards developing skills not easily-automatable. Any attempt at reducing AAR adoption and/or penilization would likely have a catastrophic outcome. Additionally, it seems plausible that if other members of the global economy continue to become more productive with their adoption of AAR, the ability for the United States to remain competitive will diminish.