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Automation is the future - whether you like it or not

How long do you think it will take before machines do your job better than you do?


With the UP Government saying that any state which wants migrant workers of Uttar Pradesh back, has to seek permission from the state government and need to ensure their socio-legal-monetary rights, an unnecessary level of bureaucracy has been added for industries to get their workers back.


Anecdotally, you hear most factories and industries have about 60-70% of their workforce missing - they've returned to their villages or hometowns.


With this background and considering the Covid-19 situation across the world, Companies are going to embrace automation like never before. Considering this, automation is coming for you - whether you like it or not.


This article is based on a brilliant video by Kurzgesagt. Linking the video below:

We're not here to say that we're looking at a Skynet situation, but we can't deny that automation is different this time. Automation used to mean big stupid machines doing repetitive work in factories. Today the world is different.


Today machines can trade stocks (ask any trader about algo trading and they'll go on all day), fly aircrafts, diagnose diseases and even beat Magnus Carlsen at chess.


Automation has been around for a century. But something is different this time. Innovation made life easier. Human's could shift focus to more important tasks and leave mundane repetitive tasks for the machines. This meant productivity meant up.

Jobs were destroyed by machines. But this always meant that newer jobs were created. Think Mr. Bucket being replaced by a machine at the Toothpaste factory and getting hired to fix that machine at the end of the movie (Charlie and the Chocolate Factory).


Simple - Innovation --> Higher Productivity --> Fewer Old Jobs --> New and better jobs


This lead to a generally better standard of living.


This time it's different. Our jobs are now being taken over by machines at a ridiculous speed. You might be thinking that a machine could never do your job - but you'll be surprised by what a well written machine learning algorithm can do.


"So what?" you say. Like always, innovation will save us and lead to better jobs, right?

While new information age industries are booming, they are creating fewer and fewer new jobs.


In 1979, General Motors employed more than 800,000 workers and made about $11 billion. In 2012, Google made about $14 billion US dollars while employing 58,000 people.

We appreciate that this isn't an apples to apples comparison , but Google is an example of what created new jobs in the past.


The internet may be the most important innovation made by mankind in the recent past. The Internet created new industries, but not enough jobs. It created nowhere near enough jobs to keep up with population growth or to even compensate for the jobs it destroyed.


At its peak in 2004, Blockbuster had 84,000 employees and made $6 billion US dollars in revenue. In 2016, Netflix had 4,500 employees and made $9 billion dollars in revenue.

Innovation in the Information Age doesn't equate to creation of enough jobs. In the next couple of decades, more than half of all jobs will be automated. Covid-19 is just going to accelerate this because you know who can't catch Covid-19? Machines.

You may think your job is way too specialized to be done by a machine. For the longest time, machines have been unable to do not-so-complicated tasks that humans can do with ease.

While even our smartest machines are bad at doing these jobs, they are extremely good at doing narrowly defined and predictable tasks. This is what destroyed industrial jobs.


The problem right now for humankind is that any complex job can be divided into a sub-set of predictable defined tasks one after the other. Machines are on the brink of becoming so good at breaking down complex jobs into many predictable ones, that for a lot of people, there will be no further room to specialize.


Once this happens, there's no turning back. Machines will do most jobs and there's nothing we can do about it.

Machines do this via machine learning (we intend to cover how machine learning works in a separate post). It helps the acquire information and skills by analyzing data.


Machine learning is starting to move at breakneck speeds due to the access to data. Data is the new oil, isn't it?


What we've created by accident is a huge library machines can use to learn how humans do things and learn to do them better. These digital machines might destroy the most jobs. What's more is that these machines can be reproduced, instantly and for little to no cost.


When they improve, you don't need a new machine. A software update is all that's needed to improve these machines. For example, MKBHD recently did a video on how a Tesla improves over time purely through software updates:

If your work involves complex work on a computer today, you might be out of work even sooner than the people who still have jobs in factories.


There are actual real-world examples of how this transition might be happening.

A San Francisco company offers a project management software for companies. It eliminates middle management jobs. When the software is hired for a job, it quickly sorts though processes to decide which jobs can be automated and where it needs human experts. Then, it hires a team of freelancers over the internet. The software then distributes tasks to the humans, and controls the quality of the work.


Here's the scary part - while the freelancers complete their tasks, learning algorithms track them, and gather data about their work. Data Data Data. Data is everything in the information age. So what's actually happening, is that the freelancers are teaching a machine how to replace them.

On average, this software reduces costs by about 50% in year 1 and by another 25% in the subsequent year.


This is just one example of many. All of these jobs won't disappear tomorrow. But fewer and fewer jobs will remain over time.

Unfortunately, this is only the tip of the iceberg. The nature of innovation in the Information Age is different from everything we've encountered before.

This process started years ago and is already well underway. New disruptions like robot accountants, remote working, self-driving cars are set to take the world by storm.


It looks like automation is different this time. This time, the machines might really take our jobs.

Our economies are based on Consumption economics. What happens if people don't have jobs and can't consume anymore? Will we produce more at cheap rates and reach a point where no one can actually buy all our products and services? Or, will the income disparity increase and the future will see a tiny minority of the super rich who own the machines... dominating the rest of us?


Is our future really that grim? No it isn't. This article seems fairly dark but its just something to ponder over. It's far from certain that things will turn out so bad. Automation may actually make our lives better. Instead of doing tasks that can be done by machines, human skills can be diverted to more creative things. Maybe the 5-6 day work week will come down and humans will actually have a life other than work.


The Information Age and modern automation, could be a huge opportunity to change human society, and reduce poverty and inequality drastically.

What's the solution to all of this? Universal basic income? We'll talk about Universal Basic income in an upcoming blog post. Sign up in the footer to get early access.

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