Tuesday, March 31, 2015

Fasten Your Seat Belts

A 2013 study by Carl Frey and Michael Osborne of Oxford University estimates that 47% of current jobs in the U.S. economy are at risk of being eliminated by automation and/or computerization over the next 20 years.

The study analyzed 702 occupations in the United States and used a probability analysis to determine how susceptible each is to future computerization. As you might imagine, many of the occupations at the most risk of being disrupted involve low educational levels and low skill levels. However, that is not always the case.

Here are the ten occupations that were considered to have the lowest probability of being disrupted by technology over the next 20 years. The number represents the probability (expressed as a percentage of 100) that the job will be computerized in some fashion.

1.   0.0028   Recreational Therapists
2.   0.003     First-Line Supervisors of Mechanics, Installers, and Repairers
3.   0.003     Emergency Management Directors
4.   0.0031   Mental Health and Substance Abuse Social Workers
5.   0.0033   Audiologists
6.   0.0035   Occupational Therapists
7.   0.0035   Orthotists and Prosthetists
8.   0.0035   Healthcare Social Workers
9.   0.0036   Oral and Maxillofacial Surgeons
10. 0.0036   First-Line Supervisors of Fire Fighting and Prevention Workers

Here are the ten occupations that were considered to have the highest probability of being affected by automation over the next two decades. Note that the study assessed that there is a 99% chance that these occupations will see some dislocations due to technology.

693. 0.99  New Accounts Clerks
694. 0.99  Photographic Process Workers/Processing Machine Operators
695. 0.99  Tax Preparers
696. 0.99  Cargo and Freight Agents
697. 0.99  Watch Repairers
698. 0.99  Insurance Underwriters
699. 0.99  Mathematical Technicians
700. 0.99  Sewers, Hand
701. 0.99  Title Examiners, Abstractors, and Searchers
702. 0.99  Telemarketers

Note in particular that tax preparers and insurance underwriters would normally not be considered low education or low skill jobs today. Watch repairers are skilled workers but where will the watches be to be repaired 20 years from now?

It is a pretty sobering list to review.

Here are a few more occupations that all have a better than 50/50 chance of seeing major disruptions.

.98  Umpires, referees and other sports officials
.98  Models 
.96  Cooks, restaurants
.94  Waiters and waitresses
.92  Retail salespersons
.90  Roofers
.89  Taxi drivers and chauffeurs
.89  School bus drivers
.87  Parking lot attendants
.80  Barbers
.77  Carpenters
.58  Personal Financial Advisors
.55  Commercial Pilots

Umpires? Strikes and balls will no longer involve judgment. Nor will the close call at first base.

Models? Are we headed to a world in which we can create our own holograms of the perfect man or woman?

Cooks? That robot will really know how to flip those pancakes at exactly the right time.

I was particularly interested in how the Oxford study viewed potential disruption in the transportation sector as I had the privilege of attending a speech by Peter Diamandis several weeks ago where he gave his perspectives on the future.


If you are not familiar with Diamandis, he is the founder of the X PRIZE Foundation and was named by Fortune magazine as one of the world's 50 greatest leaders.

His basic thesis is that we are entering a bold, new era of exponential growth fueled by technology, automation, computerization and a democratization process that allows anyone in the world into the room of ideas and innovation due to cloud computing.

The new world we are in is increasingly disruptive that can quickly lead to the demonetization of established industries.

For example, look at what Craig's List did to classified ads in the newspapers, Skype did to long distance calls, Amazon did to book stores or what Uber is doing to taxi fleets.

Diamandis is particularly excited about the potential of Google's "autonomous" car. That would be understood to be a "driverless" car for most of us. He sees it as a real game-changer and he made some rather startling comments around what he saw in the future as a result of this innovation

First off, Diamandis stated that he had two 3-1/2 year old twins. He said they will never learn to drive. In his view we are going to see profound changes in autonomous cars in the next 10-15 years with massive disruptive effects..

He expects the auto insurance business to basically wither away. There will be very few auto accidents once the human element is removed. I guess the same goes for auto body shops.

He believes that automakers and auto dealerships are threatened as people will see no need to buy their own cars as it is incredibly inefficient economically. How often are you using your car?  Most people are not using it more than 5% in a day.

Diamandis seems to foresee something akin to a SuperUber where you just get a car to take you where you need to go when you need to go. Of course, all those Uber drivers will need to find something else to do (as well as the school bus driver, chauffeurs and truck drivers).

With fewer owned cars we also might not need as many parking lots. If you don't own a car you don't need to park it or garage it. The average suburban shopping mall uses up about three times the real estate for parking as it does for the retail shopping. What is the impact on real estate if this could be cut in half?

This is just one limited example of the cascading effects of one piece of automation and how it might affect the world we live in.

These are the technological areas that Diamandis sees as having the most potential for exponential growth in the near future.

1. Infinite Computing
2. Sensors & Networks
3. Robotics
4. 3D Printing
5. Synthetic Biology
6. Digital Medicine
7. Nanomaterials
8. Artificial Intelligence

The world has seen major economic and technological changes many times before and made the necessary adjustments. It has always resulted in a better standard of living and an improved way of life despite the inevitable individual economic dislocations. However, the changes have never been this rapid. Could it be different this time because of the exponential speed of new developments such that there is not enough time for the potential mass of humans that might be affected in so many sectors of the economy?

This entire subject is the theme of a recent article in The Economist which cites the Oxford study.

This is what Michael Rendle in The Huffington Post had to say about The Economist article.

Almost half of all jobs could be automated by computers within two decades and "no government is prepared" for the tsunami of social change that will follow, according to The Economist.
The magazine's 2014 analysis of the impact of technology paints a pretty bleak picture of the future.
It says that while innovation (aka "the elixir of progress") has always resulted in job losses, usually economies have eventually been able to develop new roles for those workers to compensate, such as in the industrial revolution of the 19th century, or the food production revolution of the 20th century.
But the pace of change this time around appears to be unprecedented, its leader column claims. And the result is a huge amount of uncertainty for both developed and under-developed economies about where the next 'lost generation' is going to find work.

In order to adjust and compensate for what is coming workers will need much greater technological, cognitive, creative and social skills.

However, with that in mind, consider these facts about educational attainment in the United States which I wrote about several years ago in my blog post, Arts and Sciences, Supply and Demand.

  • 25% of students who begin high school in the United States do not finish.  Fewer students who start high school today graduate than they did 40 years ago.  79% finished in 1971 but only 75% are graduating today despite the fact that the world and the economy is far more complex and education and skills are far more important in securing a good paying job. 
  • In fact, the United States is the only developed country in the world where a higher percentage of  55 to 64 year olds has a high school degree than do 25 to 34 year olds.
  • The percentage of college graduates for American citizens aged 25-34 is no higher than the percentage for those aged 55-64 - 41% of both age groups have a degree.  30 years ago that was good enough to lead the world.  We now rank 16th!

We may be seeing exponential growth in technology and automation but humans are not even evolving at linear levels. In fact, our education levels in the United States may actually be regressing.

This is a slide that Diamandis used to show the disruptive stress (or potential of opportunity) between an exponential trend and a linear trend.

Credit: Peter Diamandis

I see the opportunity.

However, you can expect a whole lot of disruptive stress along the way if you consider the educational stats cited above.

The road ahead in our autonomous cars promises to be exciting but there will be more than a few people run over in the process. That looks like a dead man's curve for those who don't adapt.

Is it time to fasten our seat belts? Or do I even need to in an autonomous car?

Follow the lead. of these modern Millennials. It is always better to be safe rather than to be sorry.

Put your feet up (and buckle up) in your autonomous car 
Credit: zedie.wordpress.com

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