Automation Scare

We always wish our tasks and chores to be made easier and easier. Science had helped us to a great extent in making our life comfortable and luxurious bringing in convenience. Although that is leading to less physical activity which in turn leads to numerous health and fitness issues. However no one can blame science for that. You have to blame yourself for the kind of choices you make. This is first level of automation, we can call it personal automation, which is domestic in nature and no apparent harms if you are conscious with your choices. 

However if an individual can choose to be comfortable and luxurious by paying extra money and buying machines for all chores then an employer can also choose the same at a different level. He would always dream of his business running without to much of interventions required, without worrying for people to show up in time and perform up to mark. He is always fade up of the spats, disputes, arguments and negotiations with his staff and still he has to find a way out of all these and keep his factory\business running. He prayed since long and his prayers have been answered and science has invented all kinds of robotics. The industrial robots have changed the face of manufacturing world. One driver of a robotic vehicle is now capable of doing job of 100 labors to carry and arrange the material or packaged products. So now you have to deal with 1 person instead of 100 and it is quite easy to monitor him and keep him happy. 





This is second level of automation - Industrial automation. Of course the darker side of coin is people losing their jobs. All industries have been going through this revolution. The costs of these robots have been already recovered and they started making better profits. Newer and newer demands came in market, which gave birth to new industries, however robots followed the labors and thrown them out of job after some time. There are only a few industries, mostly small scale or home run business, which depends completely on man power.



While people are still struggling to cope up with this war with machines, which is stealing their jobs and in turn denying them the living measures, developed countries with less population and stronger economy has taken up third level of automation, Services automation. They had invested heavily in R & D since last 20 years and we are seeing the interesting results. You might have heard of auto driving vehicles getting tested on roads now. People never thought this dream could become a reality. But it is a reality now. Imagine the loss of taxi drivers. And this is not limited to one industry. In healthcare, we heard about robot performed surgery, robot nurses are already monitoring patients. Hospitality industry have attendant, waiter robots. Online banking transactions, ATMs have reduced the staff requirement of financial sector by 30% which is big number and projection is that transaction automation will further increase by 15%.




In software IT industry, cloud technology has ousted people, internet of things(IOT) is going to make it worse. Around 40% of workforce in software development industry is Quality Assurance i.e. testing the software. Automation had made significant inroads in QA and demand of manual testers is sharply going down. Although automation cannot be 100%, and there will be still some testing done manually, it has reached up to 80%. To put this in perspective, once we automating test cases for a software, a test cycle which used to take 4 to 8 weeks to complete, now gets executed overnight. Imagine the serious fallout.

Here is a related article: Automation and anxiety    





So the myth that automation is only going to affect specific industries has been broken. And this is really scary situation. Take a look at world unemployment rates. Even if we keep the poor countries and extreme figures out of calculation, average unemployment rate of world is around 7 percent. This is a big number, why let's see:

Unemployment rate is calculated as:

UR = No. of unemployed people / Labor force

The labor force includes the total number of people who are working and unemployed people who is willing and able to work. It does not consider people who do not wish to work or have given up on looking for work. So this figure actually does not give us correct unemployment figure. However this is the current accepted definition.

And this third level i.e. Services automation is going to increase this number further.

This also has significant socio-economic effect. Since automation is reducing the manpower required, the business profit is now getting accumulated with a few people. Economists and socialists are already worrying about job polarization, where  average skill jobs (such as those in manufacturing) are attacked by automation however both low skill and high skill jobs are retained or expanding. In effect, the workforce splits into two groups:

  • highly paid, highly skilled workers such as architects and senior managers
  • low paid, low skilled workers (such as cleaners, labors)

With middle class disappearing, this is going to create a clear social divide based on spending power. We are already struggling with this issue in urban area. High class, since they earn heftily tend to spend lavishly or without questioning prices, leads to local and dummy inflation making it difficult for lower class to meet their ends.

Historian are optimistic though. They say whenever such thing has happened in past like say during first and second industrial revolution, we survived because machine automation always create collateral jobs as side effect. However, the kind of examples they give in support I have my doubts.  And I see that we are walking the path of social unrest and revolt.

Solution is to seriously assess the situation and react wisely. We have to be inclusive in the way we run businesses. The definition of business success has to change. Success of a businessman should be directly proportional to number of people getting benefited out of his business which includes customer and workers. And not on how big operating profit he is earning from his business. Businesses exists because people do. Hence if you think you can keep on sacrificing some people for some other people, you are going to learn your lesson one day and you are going to learn it hard way.


[Thanks!]

Addendum:
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Comments

  1. Great Read! Success of a businessman should be directly proportional to number of people getting benefited out of his business which includes customer and workers. And not on how big operating profit he is earning from his business. Businesses exists because people do.

    ReplyDelete
  2. News started coming in:

    http://economictimes.indiatimes.com/articleshow/56680032.cms

    ReplyDelete

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