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Digital Revolution Will Kill Jobs, Inflame Social Unrest, Says Gartner
dcblogs writes "Gartner says new technologies are decreasing jobs. In the industrial revolution — and revolutions since — there was an invigoration of jobs. For instance, assembly lines for cars led to a vast infrastructure that could support mass production giving rise to everything from car dealers to road building and utility expansion into new suburban areas. But the "digital industrial revolution" is not following the same path. "What we're seeing is a decline in the overall number of people required to do a job," said Daryl Plummer, a Gartner analyst at the research firm's Symposium ITxpo. Plummer points to a company like Kodak, which once employed 130,000, versus Instagram's 13. The analyst believes social unrest movements, similar to Occupy Wall Street, will emerge again by 2014 as the job creation problem deepens." Isn't "decline in the overall number of people required to do a job" precisely what assembly lines effect, even if some job categories as a result require fewer humans? We recently posted a contrary analysis arguing that the Luddites are wrong.
Jobs is already dead...
Yet stock market valuations increase, concentrating wealth in a lucky few.
Why can't companies pay better wages?
Wal-Mart increasing their wages to $12/hr. would increase their average item price by 1.1% --- perhaps then their workers could occasionally afford to shop somewhere else, or eat out at somewhere other than McDonald's.
Sphinx of black quartz, judge my vow.
I agree with the general thrust of the article, but comparing Kodak to Instagram is straight-up retarded. Instagram is not replacing Kodak. It does not do what Kodak used to do with only 13 people. It does almost nothing, and does nothing worthwhile.
This is a really difficult thing to predict, and either prediction could be true. With the industrial revolution there was a net increase in demand for jobs since the increased efficiency resulted in higher demand in general thus increased infrastructure requirements. Part of what made this possible was, even if you decrease the cost, manufacturing still required time, energy, materials, etc.
Something that makes tech a little different, esp when it comes to software, is the near zero cost of reproduction. If industrial revolution Ford got double the orders for cars it would not only require more assembly lines but part suppliers would need to ramp up as would production of raw materials. If Microsoft's demand for MSOffice doubles, they might need a bit more bandwidth but there is no real spiderweb of increased jobs. They just allow more downloads or print more copies.
Manna.
Just because you're 7 years from retirement and nobody wants to take you on doesn't mean that you shouldn't spend what's left of your life savings after the 2008 crisis to go to college and start anew as a Silverlight monkey!
No?
I suppose Gartner would have a coronary if he was around when the forklift came into being. I wonder if he hires a personal truck to pickup his latest reading material from the publisher, rather than letting the paper see the inside of a jobs killing train car?
Time Bomber the Book coming soon.
The same way we no longer need to hunt and gather in today's society, most of us will no longer need to work in the future in order to keep goods and services being produced. The question is, how easy or difficult can we make this transition? To me , the worst thing that can be done is simply ignoring the problem and erroneously pointing fingers to the Luddite movement as a perpetual example why this would never happen.
The groaning of the economically illiterate, that is.
I hereby sentence everyone to "Economics in One Lesson", by Henry Hazlitt.
New technology and new production efficiencies certainly displace people who were tied to the old technologies and methods. Most people don't think too highly of the folks behind Standard Oil, but an honest assessment would suggest that they did more to save whales than anyone at Greenpeace -- by making whale oil a less cost effective heating mechanism.
This naturally caused a huge job loss for the whaling industry -- which at the time was of course a great social woe.
Whalers, buggy whip manufacturers, and people whos jobs can be trivially replaced by robots are all going to be displaced when technology improves.
What bad economics (and policy makers) repeatedly do, and what is covered in Hazlitt's book, is they focus on what is seen and ignore what is unseen.
What is easy to see when a buggy whip manufacturer loses their job is that Bob lost a job.
What is harder to see is that nearly everyone else in the society is some fractional percent wealthier. The automobile saved people time, which is why it replaced the horse. People who spend less time unproductively can create additional wealth for the rest of society to benefit from.
I think most people agree that a world where we all have handheld supercomputers that can take photos is a better world than one where the instant camera is the only cost-effective consumer device for seeing a photograph within 1 hour of having shot it.
What this analysis fails to "See" is beyond the 13 jobs at instagram. It's easy to see the loss of jobs at Kodak or polaroid. But add up all of the jobs that are tangentially related to digital photography. Flickr? People working on DSLRs? People working on Photoshop? People who write a 99 cent appstore app that is a filter for your iphone's camera?
Cast a wide net to "see" what bad economists aren't seeing.
The thing about these luddite arguments that really shows they don't hold water is that if the old way was really better, we'd go back.
We, in aggregate, like the new way better -- which is why we aren't giving up our smartphones and rushing out to buy film cameras.
My opinions are my own, and do not necessarily represent those of my employer.
I also have a few predictions of stuff that will happen in 2014:
- Further improvements in production efficiency and robotics will increase unemployment to sky-high levels.
- The unemployed masses will be sitting on their asses with nothing to do, so they will start inventing new technologies, such as the Flying Car.
- Unemployed masses will be put to work to build factories that produce the Flying Car, and to manufacture the Flying Car.
- Robots will replace production line workers at the Flying Car factory.
- Mass unemployment will follow. The only ones who can afford a Flying Car are the assembly robots from the flying Car Factory.
- Humanity is screwed and robots are buzzing around in Flying Cars.
Anticipating this, I, for one, welcome our Robotic Flying Car Overlords.
Gartner, Forrester, etc. are the bane of my existence in IT, because they promote magical thinking among executives, but this time they're right about something.
No one is prepared to deal with the dirty little secret of the information age -- that there are going to be huge swaths of the population who will be out of work, with no prospects for future employment. The last time around, it was low-skilled factory workers. Now it's the middle class's turn! And when half the country has no money and no work, they're going to get angry.
I don't think the current generation of office workers is really thinking about how much less of them will be needed once companies get around to squeezing every single nickel out of every single business process. It's already happening on a huge scale, even in the IT sector. Anything rules-based is basically fair game for automation. Think back a couple of decades -- how many millions of bookkeepers, accountants, secretaries, low-level report-consolidation managers, etc. did large companies employ and pay a decent middle class salary to? Each one of those went out and bought those large companies' products, bought houses, cars and vacations. Now that strong base of consumers is disappearing, or they need to finance their purchases through debt because their wages don't keep up. Large numbers of corporate jobs can still be summed up as "I look at reports from this location, perform a few calculations and summarize the resulting numbers for my management by emailing them a spreadsheet." No one can tell me that the accountants haven't noticed this...
The vast majority of people in the middle class, in my opinion, are averse to social welfare policies simply because they don't think anything bad is ever going to happen to them. Worse, they think that if they support the richest people and just try really hard, they'll eventually be rich themselves. This thinking is going to backfire hard on them when their nice safe job is automated or no longer needed. For example, the most vocal opinions of the new healthcare law in the US are typically middle class families who get their insurance coverage through work and have never had to worry about not having it. Try explaining to them that there are a significant number of working individuals who can't afford insurance and you get, "But...but...socialism!!" All I can say is the next few years will be very interesting. If you believe the Star Trek TNG writers, it's going to take a massive upheaval to get to a post-scarcity utopia.
I remember a long time ago when I was young that some people were predicting a future where due to technology advances you only had to work a small number of hours to meet your basic needs. People were worried about what we would do with all that leisure time.
Of course, this was naive and while it is true that technology advances have made it possible to produce much more with less labor, all of the productivity gains have been captured by the corporations and the 1%.
We now have a situation where there is a surplus of capital controlled by the rich 1% and corporations and also a surplus of workers due to gains in productivity. Unfortunately, this leads to low wages and not enough jobs. Poverty and social unrest are the result.
One would think that different approach to society would correct these imbalances by first raising the pay for work which would allow people to work fewer hours and create more jobs. Also, the idle capital of the rich and corporations could be harnessed (taxed) to improve infrastructure and social services.
We could have a utopia if the capitalists weren't so firmly in control of our government. Instead we have a dystopia with poverty, disease and social unrest... perhaps that could lead to a better government but it will be messy and the outcome is far from certain.
I don't read your sig. Why are you reading mine?
So, the guy didn't learn from the Industrial Revolution (and revolutions since) that all the fear of 'no more jobs for anyone' ended up being unfounded?
New technologies don't decrease the number of available jobs; wealth sequestration among the super-rich does. With the Middle Class having less and less money to spend, the demand for products -- and the jobs required to create them -- goes down. We've been seeing this over the past thirty years, which just happens to coincide with the rise of the computing industry.
Modern copyright is theft of culture from everyone and it retards the progress of the useful arts and sciences.
So, skilled jobs require fewer people, manufacturing and unskilled jobs get off-shored.
The end result is a big gaping hole in employment, and unless new industries come along, there's nothing else for these people to do.
We're already seeing this, and if there is no new employment sectors, all that's left in your economy is part time jobs and other shit jobs. Unemployment numbers go down more because people give up looking than because jobs are getting created to offset those who get 'right sized'.
Is this the direction you want your country to go in? Because this is where we're heading -- the shareholders are happy (for a while), but you no longer have anybody to buy your product (and then your sales slump and the shareholders are unhappy).
Welcome to the future, where short-term shareholder value will destroy your economy in the long run.
Lost at C:>. Found at C.
Manna
What do you expect from a bunch of analysts who have never run an actual shop? they're only about selling their research and access to their magic quadrant charts so naive CEOs and boards looking for answers can grasp at them for a strategy.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
There has never been a smooth transition. When the farms were mechanized we got major dislocations along with a vast increase in the wealth of America.
cf. "The Guilded Age".
http://www.austincc.edu/lpatrick/his1302/agrarian.html
http://en.wikipedia.org/wiki/Gilded_Age
Might it be Manna by Marshall Brain?
Got there by searching post-scarcity Australia, which got me to the wikipedia article on Post-scarcity economy, which mentions the "Australia Project" from that novel.
You can read it on his site.
upon the advice of my lawyer, i have no sig at this time
I think robotically constructed slums are an awesome idea! Should be much better than human constructed ones...
Gartner says new technologies are decreasing jobs.
If this were actually true we would have seen a steady increase in the number of unemployed people over time during the past 20 years. Instead we had near record low unemployment until around 2008 when we had a banking (not technology) related financial crisis. Since then unemployment has been slowly but steadily falling back towards what passes for steady state norms. While it is true that people are not employed at the same companies they used to be, technology takes away some jobs and adds others. It also makes people more effective at the jobs they do.
But the "digital industrial revolution" is not following the same path. "What we're seeing is a decline in the overall number of people required to do a job,"
That's the entire point. It means you can get more done with the same number of people. It's called increasing productivity. Rather than having a room full of accountants entering journal entries by hand on a paper ledger we have one accountant keeping the books in some software and everyone else does something more productive. Instead of using switchboard operators we use computers to route calls. There is ZERO evidence that digital technology is eliminating jobs without replacing them with others. The number of jobs hasn't fallen due to technology but the skillsets required to fill them has changed.
Plummer points to a company like Kodak, which once employed 130,000, versus Instagram's 13.
I'm not sure they could come up with a more ridiculous example. Instagram is an add on feature to already existing social networks for sharing pictures. Kodak actually made critical parts of picture taking equipment. If you want to compare Kodak to something modern, compare them with CCD sensor manufacturers and camera makers which I assure you employ far more than 13 people.
On the Internet, people often moan about how Western countries "don't make anything any more." The idea being that our service economy is built on a house of cards and the only true economic generator is the making and selling of stuff.
My view is that manufacturing is a bad choice of focus for our economies. The direction of travel is clear: it is very clearly a race to an ever descending race to the bottom which will end with completely automated factories. This race started with the industrial revolution and it will accelerate during our life times. The jobs are slowly but surely being eliminated and it might even have happened sooner if China hadn't been able to provide so much cheap labour. Those jobs are simply not safe in the long term.
But even the Chinese are not safe. Eventually, they'll all be replaced by machines and when they are, it won't matter where those machines are located. The machines will re-locate closer to the consumers to shorten supply lines.
The message is stark: any job that is repetitive risks being replaced by a robot.
Perhaps the most interesting of these is automated driving. It promises to completely transform our world. It will transform logistics in much the same way as containerisation did to shipping. It will transform everything but just think of the number of jobs that will be eliminated!
Then there are threats like 3D printers which threaten to completely remake the world as we know it.
The only sensible way to weather the next 100 years is through developing products and service that can not be automated. These are things like law, software development, media etc. etc.
Producing stuff is quickly becoming unprofitable. Service economies are our only hope.
Who also predicted (in 2011) that Windows Phones would capture 20% of the mobile market in 2015??? Yep. In fact, they are the same outfit that predicted (in 2010) that Symbian would have 30% in 2014. So, I make it a rule not to get worked up about their predictions...
Actually that kind of emphasizes the point. Where you had Kodak, Polaroid, etc, actively employing hundreds of thousands, those same people are not necessary to manufacture a multi-tasking smart phone, and nothing else has developed to utilize those idle workers in the meantime.
It's easy to ignore the issue and shout "LUDDITES!" but sometimes you have to look at a problem actively rather than wait for it to self correct, as the self correction can be messier than the fix. An uncontrolled, unregulated, unchecked market does NOT lift all boats as a matter of course.
The key difference between this and previous technological revolutions is that many people will simply be replaced; whereas in previous revolutions the people's efforts were amplified. A great example would be farm technologies. A zillion years ago in the dawn of agriculture people used a stick to shove the earth around, which became an ox pulled plow, then a horse, then crappy tractors, and now huge combines. But at each point there was a person doing the plowing. But the final move will be a robot doing the plowing. In theory there will be someone to hit the plow with a hammer when it jambs but this will be a tiny number of people nationwide.
The other critical factor is that the guy who runs the combine isn't that much more skilled than the guy with the stick (In that it wasn't years of education) which will be typical of the job killed by various forms of automation. This means that it is not so much that fewer people can do more it is that a greater percentage of the population will be unable to work productively in that a robot will be the better option. If you talk to many people who earned a good living over the last 60 years with little education you will find that they worked in very few industries, mining, farming, fishing, and manufacturing. All these are becoming more and more automated. Personally I am surprised that mining isn't completely automated underground in that by eliminating the human factor a mine should become really cheap if you don't have to worry about keeping humans alive. Plus many mines are in bizarrely remote areas meaning that you not only have to keep the miners alive underground but you then have to build whole communities above ground including expensive things such as hospitals.
One thing that I worry about is not just this clear problem of the low skilled becoming generationally unemployed but that some cultures and governments are not biased toward solving this problem. Personally I think the solution will be a consumer focused socialism. My main worry is that some countries will punish the poor, reward the few extremely productive producers and end up in modern feudal system with freakish inequality becoming the norm.
Other countries I believe are well culturally disposed at aggressively making sure that the maximum number of humans benefit from the near utopian bounty that could be provided by this revolution.
So you are assuming the only costs Walmart has are from store labour? You know there are other aspects of the business don't you? Like rent, utilities, management, and that is just at store level. Then there is how many thousands they have to pay at head office in Arkansas. Then there are things like warehouses and distribution costs, and the cost of the goods they buy from CHINA. And I am sure there is a lot of other stuff that I am missing. Use your freakin' head, labour doesn't come out of profit, profit comes after ALL those other things, including labour, are taken into account against income earned.
Look, I have nothing against the argument that if you have no skills and never tried to get any (including dropping out of school), you shouldn't complain too much about low wages. On the other hand, if you never were given or never had the opportunity because of circumstances, well then I have some sympathy... not everyone's life is easy. But please don't shoot shit like that out your ass and ask us to believe it reflects reality.
-- I ignore anonymous replies to my comments and postings.
The digital revolution has created jobs, including mine. Most places I've worked 20% of the workforce had jobs directly due to digital revolution. crank up the digital revolution to 11, we need more jobs. information is just like any other resource, creating it can create wealth, processing it can add value to that wealth, and it can be traded and sold at a profit.
Reducing the amount of work it takes to keep the human race alive, fed, and housed should be unambiguously good. The reason it's not is because we've structured our society around the idea that all adults must be employed in full-time jobs (or be married to someone who is) to qualify for a decent life. We have this idea, particularly in America, that (employment) work is a virtue in and of itself. Unemployed people are shamed and villainized.
If we all lived on isolated family farms, it would be obvious that reducing the total workload is better for everyone -- less work = more free time. But instead, we live in a complex, interconnected industrial society. It's going to take a lot of large cultural changes before we can handle the idea that some people might not work at all, or only work a few hours a week. For perspective, we still don't have a consensus on whether something as difficult and time-consuming as being a stay-at-home mom counts as a job.
Visit the
This is what's called opening a public dialog because there's no magic solution.
Why does anybody on slashdot care what Gartner says?
They are the National Enquirer of IT, mainly trying to sell useless advice to people who cannot think for themselves.
Newflash: Motor vehicles put buggy whip manufacturers out of business. And they also created a huge number of jobs in drilling for oil, refining gasoline, building roads and they even require mechanics.
Maybe we won't need store clerks any more but we will need somebody doing something new and unanticipated at this time. Gartner Group can never sell that to its customers (which is completely different from saying they don't understand the future). It's easier to sell fear than hope mostly because fearful people will buy anything that looks like a solution whereas hopeful people aren't in the market for solutions. (Be very clear about what sorts of folks Obama was selling his Hope message to in 2008).
IBM still makes mainframes. No matter how many tablets and smartphones are sold, Dell or Lenovo or somebody will still be able to make money selling laptops. Oh, and I can still buy both buggies and buggy whips at my local equestrian store, both of them made lovingly by hand.
That comparison isn't even tenuous. Instagram hasn't taken over for Kodak with 13 people. Kodak created products. Instagram simply leverages other companies products to provide a service. Instagram is more like one of those photo-mats that existed in parking lots in the 70's. The photo-mat employed a handful of minimum wage people to work with kodak's products. Those photo-mats also all went belly up long before even digital cameras started to come around.
Compared to the photo-mat, Instagram employs a handful of significantly better paid people to work with apple and googles products. The apples and the googles are a better comparison to Kodak. Last time i checked, apple and google employed a fair number of people.
AFAIK, in Kodak's heyday, there were 13 unemployed instagram people waiting for the digital revolution.
Why can't companies pay better wages?
You need to differentiate between those who cannot pay more and those who will not pay more due to the greed of the owners. Many companies such as mine are in price sensitive industries and paying significantly higher wages results in the company's products becoming uncompetitive. My company manufactures wire harness products and our competition is often in places like China or Mexico with much lower wages or are much larger companies who are able to automate to save money. We simply cannot pay more than we do and remain in business.
Wal-Mart increasing their wages to $12/hr. would increase their average item price by 1.1%
Let's presume for a moment that your numbers are accurate. What you are forgetting is the the loss of sales from that 1.1% increase in item price. Walmart has built their entire business on being the low price leader but their lead is not very big. Walmart's net profit margin is about 3.5% so there isn't a huge amount of room to increase costs. They only keep their price leadership by a ruthless focus on keeping costs low. An increase in prices of 1.1% would result in a significant loss of sales. How big? A little hard to say without some pretty serious analysis but it could *easily* be more than 1.1%.
I don't actually have a disagreement that Walmart should pay their employees better if they are able to do so but it is not nearly as simple as you make it sound. There are more stakeholders in the company than just the employees and there are serious consequences to across the board pay increases.
Granted, but that doesn't prevent him from suggesting "non-magical" solutions. My guess is that he has some solutions in mind, but he would rather someone else propose and defend them rather than being the unpopular voice.
In debates about Christianity, there are two groups: those looking for answers, and those looking to just ask questions.
We're not talking about an evolutionary change in industrial production. Yes, buggy whip makers were going to go out of business. Fine, so those guys have to find different jobs. I hear the car factory's hiring. A little retraining, maybe a year of school / vo-tech, and he (no women in the workplace) would be back in a middle class job.
That's not the case here. The destruction part of your argument remains valid. Do we need lawyers to draft, say, formative corporate documents? Never did, frankly, but now that you can do it for $50 online, that's pulling $200 out of a lawyer's pocket. Better? More efficient? Sure. No chance we'll ever go back.
Now, take the case of a lawyer. If the online thing happens enough times, they're out of work. Now what? Law schools have produced more lawyers than available positions for years, so there's somebody younger and cheaper right behind them, even ignoring globalization. Retrain? For what? Most professional degrees and certifications are in the same boat. Unless they were just short of getting their Master's in (something where hiring is actually occurring), they're not much better off than a high school graduate.
If the lawyer is 50, they could easily have 15 working years left, and 15 more in semi- or full retirement. Never mind replacement income. It is entirely possible that they will never see a paycheck again. Economic multipliers, opportunity cost, and all that.
That's what we're up against.
ceci n'est pas un sig.
I posted about this before in another thread, but the scenario at some future time is something like this;
Robots, Automation, brute optimization from data analysis, etc will result in less jobs available for unskilled laborers and many skilled blue collar workers. At some unknown time, it's possible that even skilled white collar workers could be pushed out.
The interesting thing - and we may already be seeing it - is this; Unemployment goes up, but there's no scarcity of product or labor in response.
At this point, there's a subtle disassociation between work done and money. In fact, money as a whole will become less useful, especially as some segment of the population that steadily grows larger over time has no way to generate any. Long term, this could be a very good thing - think Star Trek and a moneyless society where people more or less live a vacation lifestyle.
Short term however, we're going to have a period of serious strife, with haves and have-nots extremely separated, where money is still needed to buy food, make rent, and obtain material goods. How are we going to reach that tipping point into utopia when we have to first get through 20%, 40% or more unemployment - but we still rely on money? I don't even know if it's possible to get through that phase without some sort of civil war or revolution first that sets up all back to zero.
Even if we do get through it, what happens when that discrepancy still exists elsewhere in the world? Some nation is going to get there first, even if it's only by hours, but the whole world won't suddenly switch on at once. If we achieve post-scarcity by forcing third world nations to bear the burden, how long will that really last?
Personally, I think that we'll come up with some other metric to judge individuals long before money and majority unemployment are real issues. We just can't stand to not place metrics of value on individuals. I also think that none of this will happen in my lifetime, so really, this is just a thought experiment.
In 300 years though, who's to say?
conversely, grammar NAZI is still a volunteer-only position, only pursued by those in it for the glory and fiiiiiinnne bitches
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Neo-Luddites are like Neo-Malthusians ... inevitably right in the end, wrong until they are.
Consumption keeping pace with productivity is what has kept the luddites in the wrong for so long. I think the west has hit peak consumption though, for various reasons (part of which is that the Malthusians are also getting close to being right).