Monday, August 29, 2016

Book Review: The Rise of the Robots - Technology and the Threat of Mass Unemployment

Before I begin my book review, I would like to thank owq for some additions to my previous post. Initially, I planned to write a part 2 on the post. After some mulling through, I decided otherwise. Instead, I will be sharing what I have learned through reading Martin Ford's The Rise of the Robots: Technology and the Threat of Mass Unemployment. Book reviews will also be one of the common features of my blog.

The Rise of the Robots is a title that has always caught my attention whenever I visit Popular Bookstores. First, I have a personal interest in this area. Second, we live in a time of increasing digital disruption and automation. Job security seems to belong in the past. You never know when a new technology could arrive and displace you of your job! I do not wish to be blindsided to the potential impact that such emerging technologies could have on my job.

I will be enumerating salient points which I have gleaned from the book:

1). Historically, automation has vaporized jobs in agriculture. This has led to growths in the manufacturing sector. Similarly, automation has caused massive job losses in the manufacturing sector, pushing people into the service industry. In time to come, the service industry will be equally affected. All in all, jobs disappeared at a much faster pace than they were created.

2). Acquiring further education and skills may not necessarily mitigate the impact of automation.

3). Income inequality would further widen. Having save costs through automation, companies and shareholders would benefit the most. The author shared that the top 5 percent of households are currently responsible for nearly 40 percent of spending. This trend will continue into the future.

4). There is also a trend of "reshoring." Previously, companies go offshore for cheap labour. As offshore labour cost has risen, companies have adapted by bringing manufacturing back to their shores, using automation instead of human workers. One familiar name I saw was Kuka AG, the favourite stock of Tacomob. See here.

5). Competition in the job market will intensify. In 2011, there were 50,000 new positions in McDonalds. Over one million applicants applied for the jobs.

6). Artificial intelligence will be migrated into the cloud. Therefore, individual robots do not require that much onboard power and memory. What individual robots learn from their immediate environment are sent to the cloud, contributing to a global store of knowledge which could be used by other robots.

7). Knowledge workers are not immune. Software is beginning to be able to gather information and write coherent essays and reports in a variety of areas including sports, business, politics, finance, etc.

8). Freelancing platforms could grow smarter. Freelancers who use such platforms generate data for the platform. Gradually, the platform would learn how to meet the requirements of clients through the generated data and make freelancers obsolete.

9). In July 2012, the London Symphony Orchestra performed music completely composed by a machine.

10). Eventually, software will be able to mark student essays and provide feedback on their work.

11). Massive open online course (MOOC) platforms enable students from all over the world to learn any subject of interest at minimal cost. Personally, I love this development and this warrants a separate post on MOOCs. What the author shared in this area is intriguing. Instead of attracting the poor and under-educated, most of the people who signed up for the classes already had an undergraduate degree. Another interesting point which the author highlighted is that middle-tier educational institutes would struggle the most from the introduction of MOOCs. Elite institutions could rely on their academic prestige and the rigour of the education offered. On the other hand, lower tier institutions could offer education at more affordable levels. Therefore, mid-tier institutions are stuck in a quagmire, offering little incentives for prospective students to pick them.

12). There's actually plenty more points to highlight, but I shall cap it at 12. The author highlighted that one of the strategies to combat the impacts of automation is to provide a portfolio of equities to every single person, with the necessary safeguards in place. This allows everyone to share in the profits of the economy.

Here are my thoughts:

Following my graduation from university, I have never stopped learning and self-upgrading. I graduated from another academic programme this year and added yet another piece of paper qualification to my CV. I will be commencing on yet another academic programme soon. Still, I feel horribly inadequate.

Maybe it is because the ideal career I have in mind is multidisciplinary in nature and I desperately need expertise in the various domains. Another viable explanation is that the current job market is gloomy. If you include increasing automation, stagnant wages, graduate underemployment, and the various indicators of poor economical health highlighted in the book above, the situation becomes all the more bleaker.

Instead of being unaware of where the technological behemoth is stomping its foot, I intend to learn from it and incorporate what it could teach me into my work. Also, to prevent myself from stepping foot into certain (sunset?) industries that could be obliterated in, maybe let's say, another 30-50 years time.

If point 7 comes to fruition, my research job and, to some extent, my backup career will be taken from me. Why hire Unintelligent Nerd to do research when a computer could scour the worldwide journal databases for literature, form hypotheses and iteratively test those hypotheses, engage in various model fitting, and auto-write and publish a journal article, to boot?

My current strategy is to balance work, education, and investment. If I over-invest in my education, I could end up as a jobless PhD holder. If I take a more circuitous route (Masters than PhD), I will be better able to build my warchest but overall spend more money on my main career. I could also continue doing what I'm doing. Getting additional non-postgraduate certificates to beef up my CV. Oh! And there's financial education that I am aiming for as well (CFA).

I'll just 走一步算一步

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