Slashdot Mirror

An anonymous reader quotes a report from CNNMoney: The McKinsey Global Institute cautions that as many as 375 million workers will need to switch occupational categories by 2030 due to automation. The work most at risk of automation includes physical jobs in predictable environments, such as operating machinery or preparing fast food. Data collection and processing is also in the crosshairs, with implications for mortgage origination, paralegals, accounts and back-office processing. To remain viable, workers must embrace retraining in different fields. But governments and companies will need to help smooth what could be a rocky transition.

Despite the looming challenges, the report revealed how workers can move forward. While the introduction of the personal computer in the 1980s eliminated some jobs, it created many more roles. Workers who are willing to develop new skills should be able to find new jobs. The authors don't expect automation will displace jobs involving managing people, social interactions or applying expertise. Gardeners, plumbers, child and elder-care workers are among those facing less risk from automation. The report says that 39 million to 73 million jobs in the U.S. could be destroyed, but about 20 million of those displaced workers can be shifted fairly easily into similar occupations. Globally, up to 800 million workers could be displaced.

Analysts at McKinsey & Company write: For the better part of a decade, telecom companies have suffered through declining revenues, cash flow, and return on investment just as tech companies like Google, Facebook, Amazon, and others have mushroomed by building their businesses on the operators' own infrastructure. While these tech visionaries have enjoyed well over $1 trillion in combined market-cap growth by innovating and thinking differently and adeptly, telecom companies have tried to compete by implementing the same old survival tactics: cutting costs, reducing the workforce, and timidly entering into new business adjacencies. The trouble is that playbook no longer applies. [...] We've seen this before in other capital-intensive industries. The airline industry, for example, despite incredible growth in travel during the early part of this century, destroyed economic value until 2015 when, for the first time, the industry-level average return on invested capital (ROIC) was just in excess of its cost of capital. This return to economic profitability was achieved through a combination of falling fuel prices; significant industry consolidation, especially in the United States; and the growth of ancillary revenues, such as checked-baggage fees. If global operators were to follow the airline industry's prior trajectory, the implications could be dramatic. That's not just for the operators that would see declining investment as capital and talent move into sectors with superior returns but also for current and future over-the-top (OTT) players, such as Amazon, Apple, Facebook, Google, and Netflix, who rely so heavily on the operators' networks and investments.

From a report by research firm McKinsey & Company: Organizations have been investing in all manner of customer-facing technology solutions to replace live calls. Of all operational call-center technologies, digital solutions were ranked as one of the most important over the next five years by four out of five executives. Only agent desktop tools ranked higher. These technologies begin with websites, chat bots, and apps and extend to artificial-intelligence robots that simulate human conversations -- redefining the way organizations interact with customers -- as well as more tried-and-tested functionalities such as improved web, app, or self-service capabilities in interactive voice-response (IVR) systems. And yet, despite this plethora of technology solutions, we see that calls are not going away and instead are catching call-center executives off guard in their efforts to reduce volumes. It's not that a spike in call volumes is necessarily a bad thing. On the contrary, the proliferation of digital tools can awaken previously dormant customers, sparking new inquiries from an engaged customer base. But in many instances, we've also observed that the volumes of unwanted calls exceed what would be expected during a learning period, or remain constant or rise over time, defeating strategic goals and leaving managers bewildered and unable to tie tech investments to improved operational outcomes. Why are so many organizations struggling with reaping the full benefits from these investments? In our experience, the answer often lies in two core areas. First, as companies turn to technology to address call-center volumes, they allow customer experience to take a back seat to digital technology in their operations, creating dissonance in direct customer interaction, where the objective is harmony and efficiency. Second, by counting on technology to solve their call-center issues, executives lose focus on core operations and upset the balance between human interaction and automation in an era of evolved customer service.

Michael J. Coren reports via Quartz: More than 1 million U.S. homes have solar systems installed on their rooftops. Batteries are set to join many of them, giving homeowners the ability to not only generate but also store their electricity on-site. And once that happens, customers can drastically reduce their reliance on the grid. It's great news for those receiving utility bills. It's possible armageddon for utilities. A new study by the consulting firm McKinsey modeled two scenarios: one in which homeowners leave the electrical grid entirely, and one in which they obtain most of their power through solar and battery storage but keep a backup connection to the grid. Given the current costs of generating and storing power at home, even residents of sunny Arizona would not have much economic incentive to leave the electric-power system completely -- full grid-defection, as McKinsey refers to it -- until around 2028. But partial defection, where some homeowners generate and store 80% to 90% of their electricity on site and use the grid only as a backup, makes economic sense as early as 2020.

[A]s daily needs for many are supplied instead by solar and batteries, McKinsey predicts the electrical grid will be repurposed as an enormous, sophisticated backup. Utilities would step up and supply power during the few days or weeks per year when distributed systems run out of juice.

Li Yuan, writing for the WSJ: Apple's latest predicament centers on its App Store. Last month, Apple told several Chinese social-networking apps, including the wildly popular messaging platform WeChat, to disable their "tip" functions to comply with App Store rules (Editor's note: the link could be paywalled; alternative source), according to executives at WeChat and other companies. That function allows users to send authors and other content creators tips, from a few yuan to hundreds, via transfers from mobile-wallet accounts. Those transfers are offered by the social-networking apps free of charge, as a way to inspire user engagement. Now, those tips will be considered in-app purchases, just like buying games, music and videos, entitling Apple to a 30% cut. For Apple, which has been observing slowing growth in mature markets, China is increasingly becoming important. But the company's my way or high-way approach might hurt the company's image in China. And that image as well as fortunes of local companies, is what the Chinese authorities deeply care about. As Yuan adds, "while it's understandable that Apple wants to tap the App Store for more money, its pressure on the app platforms risks alienating powerful Chinese companies, turning off Chinese iPhone users and drawing unnecessary attention from the regulators." Executives of these IM messaging apps tell WSJ that Apple has threatened that it would kick their apps out of the App Store if they don't comply. The problem is, WeChat is way more popular in China than Apple -- or its iPhones or its services or both combined, analysts say. WeChat is insanely popular in China, and people love to use the app to pay for things they purchase and send money to friends. Apple's greed could end up resulting in millions of new Android users, analysts said.

An anonymous reader quotes a report from Electrek: A new study published this month by McKinsey and Company looks into how automakers can move past producing EVs as compliance cars and "drive electrified vehicle sales and profitability." Unsurprisingly, it describes battery economics as an important barrier to profitability and though the research firm sees a path to automakers making a profit selling electric vehicles as battery costs fall, it doesn't see that happening for "the next two to three product cycles" -- or between 2025 and 2030. That's despite battery costs falling from ~1,000 per kWh in 2010 to ~$227 per kWh in 2016, according to McKinsey. The company wrote in the report: "Despite that drop, battery costs continue to make EVs more costly than comparable ICE-powered variants. Current projections put EV battery pack prices below $190/kWh by the end of the decade, and suggest the potential for pack prices to fall below $100/kWh by 2030." Automakers capable of staying ahead of that cost trend will be able to achieve higher margins and possible profits on electric vehicle sales sooner. Tesla is among the automakers staying ahead of the trend. While McKinsey projects that battery pack prices will be below $190/kWh by the end of the decade, Tesla claims to be below $190/kWh since early 2016. That's how the automaker manages to achieve close to 30% gross margin on its flagship electric sedan, the Model S. Tesla aims to reduce the price of its batteries by another 30% ahead of the Model 3 with the new 2170 cells in production at the Gigafactory in Nevada. It should enable a $35,000 price tag for a vehicle with a range of over 200 miles, but McKinsey sees $100/kWh as the target for "true price parity with ICE vehicles (without incentives)": "Given current system costs and pricing ability within certain segments, companies that offer EVs face the near-term prospect of losing money with each sale. Under a range of scenarios for future battery cost reductions, cars in the C/D segment in the US might not reach true price parity with ICE vehicles (without incentives) until between 2025 and 2030, when battery pack costs fall below $100/kWh, creating financial headwinds for automakers for the next two to three product cycles." UPDATE 2/3/17: We have changed the source to Electrek and quoted McKinsey and Company -- the company that conducted the study.

Hugh Pickens DOT Com writes "Tom Friedman begins his latest op-ed in the NYT with an anecdote about Dutch chess grandmaster Jan Hein Donner who, when asked how he'd prepare for a chess match against a computer, replied: 'I would bring a hammer.' Donner isn't alone in fantasizing that he'd like to smash some recent advances in software and automation like self-driving cars, robotic factories, and artificially intelligent reservationists says Friedman because they are 'not only replacing blue-collar jobs at a faster rate, but now also white-collar skills, even grandmasters!' In the First Machine Age (The Industrial Revolution) each successive invention delivered more and more power but they all required humans to make decisions about them. ... Labor and machines were complementary. Friedman says that we are now entering the 'Second Machine Age' where we are beginning to automate cognitive tasks because in many cases today artificially intelligent machines can make better decisions than humans. 'We're having the automation and the job destruction,' says MIT's Erik Brynjolfsson. 'We're not having the creation at the same pace. There's no guarantee that we'll be able to find these new jobs. It may be that machines are better than that.' Put all the recent advances together says Friedman, and you can see that our generation will have more power to improve (or destroy) the world than any before, relying on fewer people and more technology. 'But it also means that we need to rethink deeply our social contracts, because labor is so important to a person's identity and dignity and to societal stability.' 'We've got a lot of rethinking to do,' concludes Friedman, 'because we're not only in a recession-induced employment slump. We're in technological hurricane reshaping the workplace.'"

An anonymous reader writes "The Economic Times, India's leading financial newspaper, reports that Diana Farrell, Director, McKinsey Global Institute during her speech at Nasscom 2004 said that Bureau of Labour Statistics is predicting a job gain of 22m in the US by 2010, against a job loss of 2m, due to offshoring. You can read the full article here."