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Ignoring elephants and icebergs

Published: 24 Aug. 2016, 19:25

In 1952, a young war vet, Kurt Vonnegut, published his first novel, Player Piano. Though not an immediate commercial success, the book established the writer as a national figure. Later, he wrote novels that secured his place in literary history, but it was this first work that offered a more accurate view into the future than his later novels.

The book humorously describes a society that is almost entirely automated. There is little need for human input. The book portrays class conflict between a wealthy minority consisting of engineers and plant managers who keep society running, ruling over the majority of society whose old jobs and skills had been replaced by automation. A professional actor even plays the role of President of the United States (presaging Ronald Reagan’s presidency by thirty years!).

Six decades after the novel’s publication, there is widespread anxiety over past and proposed trade treaties that threaten jobs. Politicians, trade unionists and other society leaders whip up anxieties about how jobs will be lost to globalization and nefarious trade agreements. At the same time, there is almost no mention of how automation is insidiously eroding away professions. Robotics and computers with artificial intelligence have become the proverbial elephant in the room that virtually no one wishes to acknowledge.

Back in the1980s when I was a manager in an assembly plant, I could see this development forming. Our plant was at best semi-automated compared to similar plants in Japan. For the time, it was cheaper to use unskilled labor rather than invest in robotics. But I could see that would eventually change, and change it has.

Recently I have had several discussions with a Korean plant manager and have even visited his factory. The factory is clean, efficient and uses amazing machinery to generate products. But it is obvious that the plant could be further automated. The reason why it has not been further robotized is due to a number of factors. First, temporary labor offers greater production costs flexibility than making major sunk cost investments in machine upgrades. Also, the improved productivity from more fully automated production does not justify, at least for now, the return on investment.

Interestingly, this same manufacturing executive when visiting a sister plant in Japan was impressed by the difference in work attitudes of Japanese workers. The workers were much more determined and focused than their Korean counterparts. Although the Japanese labor costs are higher than in Korea, the Japanese workers more than offset the difference by greater productivity. It is unclear what those Japanese plant workers think of future automation. But they must have some appreciation from competing in the most automated market in the world. According to the Korea plant manager, that perspective has yet to sink in among his younger Korean factory workers. Their attitude is typical of what is driving Korean managers to eliminate workers, and a lost work place almost never returns. Once automation begins, managers admit that it is like having an addiction. They come to wanting to automate more and more, and at a higher pace.

To be fair, almost no one seems to have a good grasp of what is coming our way. But we seem to be on the cusp of a second Industrial Revolution. Like people two centuries ago, we can’t see this tsunami since it is largely beyond our sight.

Not only will taxi and truck drivers be replaced and our goods be increasingly produced with less human labor, but many ‘safe’ white collar jobs are likely to disappear. Remember the secretaries of a generation ago? Their disappearance was but the tip of the iceberg. At most, we are just starting to sense the scale of automation’s size. We will soon be discovering the full impact in the coming few years and decades.

Insurance sales and other financial services, for example, are already being forecasted to be disappearing by thought leaders, such as McKinsey & Company. Giant strides continue to be made in artificial intelligence using voice recognition automation. Even many human resources jobs may soon become obsolete. Only a few jobs may survive to provide strategic oversight and auditing with automation taking care of the work now being done by humans.

Schoolteachers may be reduced by knowledge automation based on big-data technologies that foster individual self-learning. Many medical roles will be abridged, if not eliminated, by IOT (Internet of Things) and mobile Internet-based solutions. Remote health care via cheap sensors and cloud-based virtual super computers are expected to become commonplace.

If all of this seems like science fiction, consider how we went through life prior to smartphones. Change, whether we like it or not, takes place at an exponential pace.

One may hope all of this automation will release people from drudgery and allow us to have more fulfilling lives. Certainly that will be the case for a minority of people. For the majority, I fear, either will end up at the wrong place and time in our lives or simply lack the mental skills to adapt. And this brings us back to Vonnegut’s vision.

The only oasis amidst this change may be reserved for those people who are major wealth holders, particularly in real estate. While services and production can be automated, property that can be kept clear of permanent devaluation may be the final refuge. Families and governments may belatedly wake up and try to better prepare their offspring and citizens to be more nimble. But more likely we will see a furtherance of a major bifurcation. A small wealthy minority will continue to own and manage society’s means of production and services. The majority, if lucky, will exist on some kind de facto welfare that will enable them to muddle along.

Should there be a solution to this conundrum, someone needs to speak up soon.

*The author is a long-term resident of Korea and author of two books on doing business, including “Doing Business in Korea: An Expanded Guide.”

Tom Coyner