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Wednesday, 16 September 2015

Creating/destroying jobs >>> Creative Destruction and Artificial Intelligence

This blog has already considered the implications of AI:
Futures Forum: Artificial Intelligence: is it humanity's greatest 'existential risk'?

Especially in its potential effects on the world of work:
Futures Forum: Artificial Intelligence: 'complements labor and increase its productivity'
Futures Forum: Technological unemployment and the Luddite fallacy

These same concerns were addressed in this week's Panorama:
BBC iPlayer - Panorama - Could A Robot Do My Job?

This reflects a lot of buzz in the media currently, with scientists voicing grave concern:
How safe can artificial intelligence be? - BBC News
Stephen Hawking: 'AI could spell end of the human race' - BBC News

... and the business world generally enthusing about its potential:
AI Will Help, Not Kill Us, Says Alphabet Chairman Eric Schmidt | Digital Trends
Intelligent Machines: What does Facebook want with AI? - BBC News
Uber CEO talks UberPool profitability and AI in well-coached interview | VentureBeat | Business | by Ken Yeung
Toyota Announces Major Push Into AI and Robotics, Wants Cars That Never Crash - IEEE Spectrum

Much of this seems to be the stuff of science fiction:
Futures Forum: Climate change... and 'Interstellar': degrading soil and running out of food
Futures Forum: Climate change... and 'Interstellar': 'Cli-fi' escapism?
Futures Forum: Climate Change: the film
The top 20 artificial intelligence films - in pictures | Culture | The Guardian
Intelligent Machines: The truth behind AI fiction - BBC News

The question is to what extent these technologies represent a real step-change - and whether they will affect how we work in a revolutionary way.

Here are a couple of articles which discuss the implications of new technologies on jobs and the economy:

Brynjolfsson and McAfee: The jobs that AI can't replace


'Evolution of Man ending with Artificial intelligence' illustrationImage copyrightScience Photo Library


Current advances in robots and other digital technologies are stirring up anxiety among workers and in the media. There is a great deal of fear, for example, that robots will not only destroy existing jobs, but also be better at most or all of the tasks required in the future.
At the heart of capitalism is the concept of creative destruction. And this phenomenon is turbocharged by technological progress. Innovations from the cotton gin to electricity to the computer have created dramatic changes in the way that we work and the jobs that are available.
Our research at the Massachusetts Institute of Technology (MIT) has shown that that's at best a half-truth. While it is true that robots are getting very good at a whole bunch of jobs and tasks, there are still many categories in which humans perform better.
And, perhaps more importantly, robots and other forms of automation can aid in the creation of new and better jobs for humans. As a result, while we do expect that some jobs will disappear, other jobs will be created and some existing jobs will become more valuable.

Erik Brynjolfsson & Andrew McAfee
Image captionErik Brynjolfsson and Andrew McAfee believe that intelligent machines will pose a increasing challenge to policy-makers, businesses and workers

For example, machines are currently dominating the jobs in routine information processing. "Computer," after all, used to be an actual job title of a person who sat and added long rows of numbers. Now it is, well, an actual computer.
On the other hand, jobs such as data scientist didn't used to exist, but because computers have made enormous data sets analyzable, we now have new jobs for people to interpret these huge pools of information. In the tumult of our economy, even as old tasks get automated away, along with demand for their corresponding skills, the economy continues to create new jobs and industries.


Intelligent Machines graphic


There are three areas where humans have a distinct advantage over machines. These are areas that are key to job creation.
Where humans beat machines
Creative endeavours: These include creative writing, entrepreneurship, and scientific discovery. These can be highly paid and rewarding jobs. There is no better time to be an entrepreneur with an insight than today, because you can use technology to leverage your invention.
Social interactions: Robots do not have the kinds of emotional intelligence that humans have. Motivated people who are sensitive to the needs of others make great managers, leaders, salespeople, negotiators, caretakers, nurses, and teachers. Consider, for example, the idea of a robot giving a half-time pep talk to a high school football team. That would not be inspiring. Recent research makes clear that social skills are increasingly in demand.
Physical dexterity and mobility: If you have ever seen a robot try to pick up a pencil you see how clumsy and slow they are, compared to a human child. Humans have millennia of experience hiking mountains, swimming lakes, and dancing—practice that gives them extraordinary agility and physical dexterity.

A dancer from The Royal Ballet performs during a dress rehearsal for Swan LakeImage copyrightGetty Images
Image captionJobs which involve physical dexterity, like dancing, are under less threat from intelligent machines than those which involve the processing of information

Jobs that depend on these kinds of skills and experiences, such as gardening and housekeeping, are jobs that robots are not good at. Some of these jobs are not always highly paid, but it is unlikely that a robot will soon take them over. However, our friends in robotics are working hard at getting better all the time, so this last category is the one most likely to change.
From an economic perspective: what should workers and governments do?
Our economic data make it clear that we are not doing as well as we should be at creating jobs and raising wages. Corporations, workers and government can work together to find solutions to this problem.
Workers, for their part, have to be strategic and aim for the jobs least likely to be overtaken by robots or other machines. They have to commit to a lifetime of practicing and updating their skills by, for example, taking extra courses online and in classrooms. Lifetime learning and continued training and retraining are key.

An apprentice during training at EEF Apprentices and Skills Centre, BirminghamImage copyrightPA
Image captionMany workers will need to train and retrain throughout their lives to stay ahead of increasingly skilled machines

Governments, for their part, need to create a climate where entrepreneurs can flourish, because new ventures create new jobs. There is troubling evidence that entrepreneurship is on the decline. This needs to change.
The answer to the new and growing workforce of robots is not to slow the pace of technological progress, but to speed up our institutions so that entrepreneurs, managers and workers alike can thrive.
Erik Brynjolfsson, a professor at the MIT Sloan School of Management and Andrew McAfee, a scientist there, are the co-authors of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.

Brynjolfsson and McAfee: The jobs that AI can't replace - BBC News


Intelligent Machines: The jobs robots will steal first


Office workers in codeImage copyrightThinkstock
Image captionOur days at the office could be numbered as an increasing range of jobs are done more efficiently by a machine

If you are sitting at a desk, driving a taxi or carrying a hod, stop for a moment and ask: could a robot or machine do this job better?
The answer, unfortunately for you, is probably - yes.
The debate about whether machines will eliminate the need for human employment is no longer just academic.
Boston Consulting Group predicts that by 2025, up to a quarter of jobs will be replaced by either smart software or robots, while a study from Oxford University has suggested that 35% of existing UK jobs are at risk of automation in the next 20 years.
Office workers who do repetitive jobs such as writing reports or drawing up spreadsheets are easily replaced with software but what other jobs are under threat? The BBC looks at some of the jobs that are already being done by machines.

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TAXI DRIVERS


Driverless taxis that will run in Milton KeynesImage copyrightTransport Systems Catapult
Image captionWhy have an "extra" person in the car?

Taxi drivers in cities around the world are currently embroiled in rows with Uber - the app-based, on-demand service whose drivers, they argue, are subject to less regulation than them.
But Uber, along with most of the major car manufacturers and Google, is already looking beyond a rival service to one that gets rid of the driver altogether.
As chief executive Travis Kalanick puts it - the service would be a whole lot cheaper if you weren't "paying for that other dude in the car".
Later this year, automated taxi pods will start running on the streets of England's Milton Keynes, offering rides around the town. The UK government is updating the highway code to take account of driverless cars.
For the moment though "the other dude in the car" is in defiant mood.
Steve McNamara, head of the Licensed Taxi Drivers Association told the BBC that driverless cars didn't threaten his job.
"Autonomous vehicles will need primary legislation changes to operate on UK roads, the technology is in its infancy and untried and tested in busy urban environments, it ain't happening for many a year. In reality it is doubtful if autonomous cars could ever work alongside conventionally driven vehicles."

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FACTORY WORKERS


Robot arms in factoryImage copyrightGetty Images
Image captionRobots are far more efficient at doing repetitive jobs

In China, humans are already building robots that will ultimately take their jobs.
The first robot-only factory is being built in China's Dongguan factory city.
The factory, owned by Sehnzhen Evenwin Precision Technology, aims to reduce the current workforce of 1,800 by 90%, according to Chen Zingui, chairman of the board.
But Chinese ambitions for a robot workforce go much further.
Since September last year, a total of 505 factories across Dongguan have invested 4.2bn yuan (£430m) in robots, aiming to replace more than 30,000 workers, according to the Dongguan Economy and Information Technology Bureau.
Foxconn, maker of electronic devices such as Apple's iPhone, also plans a robot army although its ambitions are slightly more modest - aiming for a 30% robot workforce in the next five years.


JOURNALISTS


JournalistsImage copyrightGetty Images
Image captionIs my job under threat? Could a machine write a compelling news story that humans would want to read?

The chances are if you have recently read a corporate earning report on Forbes or a sports story on AP, it was written by a robot.
Companies such as Narrative Science offer software such as Quill that is able to take data and turn it into something understandable.
Quill writes company reports ahead of earnings announcements and Narrative Science claims this means Forbes can now offer this sort of report for thousands of companies rather than just the handful that could be written up by a human journalist.
Narrative Science chief scientist Kristian Hammond has previously said that in 15 years' time, 90% of news will be written by machines but, he told the BBC, that didn't mean that 90% of journalist jobs would go.
"It means that the journalists can extend their reach. The world of news will expand," he said.
"The journalists will not be generating stories from data. That unambiguous, not-open-to-interpretation stuff will be done by machines."

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DOCTORS


Robot doctor doing the roundsImage copyrightGetty Images
Image captionWould a patient rather see a robot doctor?

A robot may not yet have a good bedside manner but it is pretty good at wading through huge reams of data to find possible treatments for diseases.
IBM's supercomputer Watson is teaming up with a dozen hospitals in the US, offering advice on the best treatments for a range of cancers. Using vision software developed by the firm, it is also helping to spot early-stage skin cancers.
And robots have for years been helping doctors perform surgery - at Guy's and St Thomas' NHS Foundation Trust, for example, robots assist doctors with keyhole kidney surgery. Speed is a crucial factor in the success of such operations and the robots are able to sew blood vessels connecting donor kidneys far more quickly than humans.
Robotic surgery is not foolproof though and a recent safety report found that machine-based surgeries were linked to at least 144 deaths in the US over the last decade.
For the moment, robot and man work side-by-side in medicine but that may not always be the case.
"Doctors in particular aren't likely to graciously cede control of their patients' treatment to synthetic intellects," writes Jerry Kaplan in his book Humans Need Not Apply.
"But eventually, when outcomes demonstrate that this is the better option, patients will demand to see the attentive robot, not the overworked doctor, for a fraction of the fee."

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COCKTAIL WAITER


Shakr Makr
Image captionFancy a gin fizz? Hold on, the robot will make you one

Royal Caribbean's luxury cruise ship Anthem of the Seas has recently installed a robotic bar - Shakr Makr - a machine developed at MIT a few years ago.
Drinks can be ordered via a tablet device and users aren't limited to a set menu - they can, if they are brave enough, create their own cocktail.
The robotic arm mixes the cocktail and pours it into a plastic (to avoid breakages) glass that sits in a trough (its pouring skills aren't always precise). And it does so with some panache - filling the cocktail mixer from optics above it and even shaking it before pouring.
In the interests of science, the BBC tested two from the robotic bar and two from a traditional cocktail waiter in a conventional bar on board the ship.
The robotic concoctions did not actually taste that good - they lacked the fine-tuning, like the fresh twist of lemon that the human bartender added.

Life's a beach?


People relaxing on a beachImage copyrightThinkstock
Image captionWill we all have more free time if our jobs are taken by robots?

These examples illustrate both the possibilities and limitations of robotic workers but each one could easily have been replaced with others - lorry drivers, hotel workers, lawyers - all of which have robot versions that are actually being used today.
It raises the question - what will humans do when their skills are surplus to requirements?
Martin Ford - author of Rise of the Robots - thinks we face mass unemployment and economic collapse unless we make radical changes, such as offering humans a basic wage, a guaranteed income.
What humans will actually do with all their free time is harder to assess - spend more time at the beach think some, while others argue for the need to keep the human touch in the work place.
"I strongly hope that teachers, doctors and judges will remain human because sometimes you need someone to talk to," Nello Cristianini, professor of AI at Bristol University told the BBC.
After all, the work we do currently is as much about talking as it is about getting a job done efficiently and, whatever they may be good at, robots engaging in office banter isn't happening any time soon.

Intelligent Machines: The jobs robots will steal first - BBC News

Anything Peaceful

 SHARES

Does "Creative Destruction" Only Help the Rich?


Innovation is a threat to the establishment

Commenting on this post, Bret Wallach writes:
Change nearly always produces both winners and losers, and while innovations heavily favor the winners, especially over the long run, libertarians willfully ignoring the real pain of those whose lives are badly damaged or even destroyed by economic changes are a major turn off to vast swaths of the populace.
The ideology that it’s perfectly okay, indeed a wonderful thing, to allow and encourage serious destruction of some people’s lives for the greater good is not widely shared by your fellow americans.
Mr. Wallach here is mistaken on at least two fronts, and, in addition, he misses the larger point. In this post, I’ll deal only with one of his errors. Follow-up posts will address the other problems with his comment.
Mistake #1: “[I]nnovations heavily favor the winners, especially over the long run.”
This claim is the very opposite of the truth.
Ignore the ambiguity of the meaning of the word “winners” when used in such contexts. If we can take Mr. Wallach to mean by “winners” those people who are, at any given time, among the wealthiest in modern market economies, these “winners” are among those who are most likely to be harmed, or those who are helped the least, by market-driven innovations.
Examples are legion, even when viewed from the perspective of producers and investors.
Prosperous local butchers in the 19th century saw their markets creatively destroyed by centralized butchering in Chicago (combined with the advent of refrigeration).
Railroad tycoons saw their market shares and their fortunes take a hit from, first, motorized trucks that carried freight and, second, increasingly affordable air transportation of both passengers and freight.
Large shareholders of Sears were none too pleased by the innovations of Jeff Bezos.
Where, today, are the victorious owners of steamships, of telegraph companies, of factories that produce Pullman cars, and of the retailers F.W. Woolworth, Borders, and Circuit City?
How have shareholders of A&P and Blockbuster “won” from recent innovations? How have shareholders of General Motors and Ford “won” from innovations in foreign trade and production technology that enabled carmakers in Japan and Korea to successfully offer to sell more cars to Americans?
What victories from recent innovations are the one-time shareholders of Western Electric celebrating today? How much additional wealth have owners of America’s major television networks “won” from innovations in telecommunications over the past 35 years?
Some firms, of course, manage to survive, and even to prosper, by successfully responding to innovations or by innovating themselves in efforts to remain profitable – for example, AT&T and Sears still exist.
But these firms survive only because they adapted to innovation and competition, not because innovations bestowed upon them some “victory” independently of how much prosperity they produce for society.
The error in Mr. Wallach’s claim is even more evident from the perspective of consumers. Market-driven innovations succeed only if they improve the lives of consumers. And the greater and more widespread is this improvement, the greater and more prominent is the success of the innovators.
A recent example: American billionaires had little to “win” from Fred Smith’s innovations that made affordable overnight package delivery possible: multi-millionaires and billionaires in the 1960s and ’70s could already afford to ship and receive packages overnight. Only with the arrival of FedEx, however, did this possibility come within reach of ordinary Americans.
Look now at a wider span of history – the long run to which Mr. Wallach refers.
Agricultural and transportation innovations improved the diets of middle-class and poor people. The rich in the past seldom went hungry, and always had meat to eat and spices to enjoy. Not so for ordinary people. Innovations in food production and delivery produced much greater relative improvements in the diets of ordinary people than in the diets of plutocrats.
Ordinary Americans today routinely vacation in the Caribbean and in Europe; only rich Americans did so prior to major innovations in transportation. Ordinary Americans regularly send their children to college; only the upper-crust regularly did so prior to WWII. Ordinary Americans today have closets full of high-quality clothing and shoes; only rich Americans in the past could afford such a quantity of clothing to stuff into their closets.
Ordinary Americans today, without even thinking about it, regularly talk on telephones (or face-to-face on Skype!) to people 3,000 miles away; in the past only rich Americans could afford the luxury of care-free long-distance calling. Ordinary Americans today watch movies on command in the comfort of their own homes; until very recently, only rich Americans did so.
As readers of this blog know, this list can be greatly extended.
It is wise to remember Joseph Schumpeter’s 1942 observation, made in the course of his discussion of “creative destruction” in Capitalism, Socialism, and Democracy (pages 67-68):
Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort…. [T]he capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.
Does "Creative Destruction" Only Help the Rich? | Foundation for Economic Education

And from a year ago:
Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization,” screams a headline. The cry of “robots are coming to take our jobs!” is ringing across North America. But the concern reveals nothing so much as a fear—and misunderstanding—of the free market.
In the short term, robotics will cause some job dislocation; in the long term, labor patterns will simply shift. The use of robotics to increase productivity while decreasing costs works basically the same way as past technological advances, like the production line, have worked. Those advances improved the quality of life of billions of people and created new forms of employment that were unimaginable at the time.
Given that reality, the cry that should be heard is, “Beware of monopolies controlling technology through restrictive patents or other government-granted privilege.”   
The robots are coming!
Actually, they are here already. Technological advance is an inherent aspect of a free market in which innovators seeks to produce more value at a lower cost. Entrepreneurs want a market edge. Computerization, industrial control systems, and robotics have become an integral part of that quest. Many manual jobs, such as factory-line assembly, have been phased out and replaced by others, such jobs related to technology, the Internet, and games. For a number of reasons, however, robots are poised to become villains of unemployment. Two reasons come to mind:
1. Robots are now highly developed and less expensive. Such traits make them an increasingly popular option. The Banque de Luxembourg News offered a snapshot:
The currently-estimated average unit cost of around $50,000 should certainly decrease further with the arrival of “low-cost” robots on the market. This is particularly the case for “Baxter,” the humanoid robot with evolving artificial intelligence from the US company Rethink Robotics, or “Universal 5” from the Danish company Universal Robots, priced at just $22,000 and $34,000 respectively. 
Better, faster, and cheaper are the bases of increased productivity.
2. Robots will be interacting more directly with the general public. The fast-food industry is a good example. People may be accustomed to ATMs, but a robotic kiosk that asks, “Do you want fries with that?” will occasion widespread public comment, albeit temporarily.
Comment from displaced fast-food restaurant workers may not be so transient.NBC News recently described a strike by workers in an estimated 150 cities. The workers' main demand was a $15 minimum wage, but they also called for better working conditions. The protesters, ironically, are speeding up their own unemployment by making themselves expensive and difficult to manage.
Labor costs
Compared to humans, robots are cheaper to employ—partly for natural reasons and partly because of government intervention.
Among the natural costs are training, safety needs, overtime, and personnel problems such as hiring, firing and on-the-job theft. Now, according toSingularity Hub, robots can also be more productive in certain roles. They  “can make a burger in 10 seconds (360/hr). Fast yes, but also superior quality. Because the restaurant is free to spend its savings on better ingredients, it can make gourmet burgers at fast food prices.” 
Government-imposed costs include minimum-wage laws and mandated benefits, as well as discrimination, liability, and other employment lawsuits. The employment advisory Workforce explained, “Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment—which, much more often than not, is the case—the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.”
At some point, human labor will make sense only to restaurants that wish to preserve the “personal touch” or to fill a niche.
The underlying message of robotechnophobia
The tech site Motherboard aptly commented, “The coming age of robot workers chiefly reflects a tension that’s been around since the first common lands were enclosed by landowners who declared them private property: that between labour and the owners of capital. The future of labour in the robot age has everything to do with capitalism.” 
Ironically, Motherboard points to one critic of capitalism who defended technological advances in production: none other than Karl Marx. He called machines “fixed capital.” The defense occurs in a segment called “The Fragment on Machines”  in the unfinished but published manuscript Grundrisse der Kritik der Politischen Ökonomie (Outlines of the Critique of Political Economy).
Marx believed the “variable capital” (workers) dislocated by machines would be freed from the exploitation of their "surplus labor," the difference between their wages and the selling price of a product, which the capitalist pockets as profit. Machines would benefit “emancipated labour” because capitalists would “employ people upon something not directly and immediately productive, e.g. in the erection of machinery.” The relationship change would revolutionize society and hasten the end of capitalism itself.
Never mind that the idea of “surplus labor” is intellectually bankrupt, technology ended up strengthening capitalism. But Marx was right about one thing: Many workers have been emancipated from soul-deadening, repetitive labor. Many who feared technology did so because they viewed society as static. The free market is the opposite. It is a dynamic, quick-response ecosystem of value. Internet pioneer Vint Cerf argues, “Historically, technology has created more jobs than it destroys and there is no reason to think otherwise in this case.”
Forbes pointed out that U.S. unemployment rates have changed little over the past 120 years (1890 to 2014) despite massive advances in workplace technology: 
There have been three major spikes in unemployment, all caused by financiers, not by engineers: the railroad and bank failures of the Panic of 1893, the bank failures of the Great Depression, and finally the Great Recession of our era, also stemming from bank failures. And each time, once the bankers and policymakers got their houses in order, businesses, engineers, and entrepreneurs restored growth and employment.
The drive to make society static is a powerful obstacle to that restored employment. How does society become static? A key word in the answer is “monopoly.” But we should not equivocate on two forms of monopoly.
A monopoly established by aggressive innovation and excellence will dominate only as long as it produces better or less expensive goods than others can. Monopolies created by crony capitalism are entrenched expressions of privilege that serve elite interests. Crony capitalism is the economic arrangement by which business success depends upon having a close relationship with government, including legal privileges.
Restrictive patents are a basic building block of crony capitalism because they grant a business the “right” to exclude competition. Many libertarians deny the legitimacy of any patents. The nineteenth century classical liberal Eugen von Böhm-Bawerk rejected patents on classically Austrian grounds. He called them “legally compulsive relationships of patronage which are based on a vendor’s exclusive right of sale”: in short, a government-granted privilege that violated every man's right to compete freely. Modern critics of patents include the Austrian economist Murray Rothbard and intellectual property attorney Stephan Kinsella.
Pharmaceuticals and technology are particularly patent-hungry. The extent of the hunger can be gauged by how much money companies spend to protect their intellectual property rights. In 2011, Apple and Google reportedly spent more on patent lawsuits and purchases than on research and development. ANew York Times article addressed the costs imposed on tech companies by “patent trolls”—people who do not produce or supply services based on patents they own but use them only to collect licensing fees and legal settlements. “Litigation costs in the United States related to patent assertion entities [trolls],” the article claimed, “totaled nearly $30 billion in 2011, more than four times the costs in 2005.” These costs and associated ones, like patent infringement insurance, harm a society's productivity by creating stasis and  preventing competition. 
Dean Baker, co-director of the progressive Center for Economic Policy Research, described the difference between robots produced on the marketplace and robots produced by monopoly. Private producers “won't directly get rich” because “robots will presumably be relatively cheap to make. After all, we can have robots make them. If the owners of robots get really rich it will be because the government has given them patent monopolies so that they can collect lots of money from anyone who wants to buy or build a robot.”  The monopoly “tax” will be passed on to impoverish both consumers and employees.
Conclusion
Ultimately, we should return again to the wisdom of Joseph Schumpeter, who reminds us that technological progress, while it can change the patterns of production, tends to free up resources for new uses, making life better over the long term. In other words, the displacement of workers by robots is just creative destruction in action. Just as the car starter replaced the buggy whip, the robot might replace the burger-flipper. Perhaps the burger-flipper will migrate to a new profession, such as caring for an elderly person or cleaning homes for busy professionals. But there are always new ways to create value.
An increased use of robots will cause labor dislocation, which will be painful for many workers in the near term. But if market forces are allowed to function, the dislocation will be temporary. And if history is a guide, the replacement jobs will require skills that better express what it means to be human: communication, problem-solving, creation, and caregiving.
Ludd vs. Schumpeter | Foundation for Economic Education

See also:
Will Robots Put Everyone Out of Work? | Foundation for Economic Education
Ex Machina and Human Action | Foundation for Economic Education
#45 – “Robots and Computerization Cause Unemployment” | Foundation for Economic Education
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