About The Episode
A look at the second perspective within the discussion of automation and jobs, namely that with new technology comes new industries and new jobs
Additional Notes:
Great article looking at transformation from horses to cars: https://www.linkedin.com/pulse/today-technology-day-horse-lost-its-job-brad-smith/
Fun Fact: It was estimated that, unabated, horse droppings would rise to the level of third-storey Manhattan windows by 1930.
Elon Musk and his 2020 prediction for Tesla: https://www.extremetech.com/extreme/290029-tesla-well-have-full-self-driving-by-2020-robo-taxis-too
Transcript
Last week we set up the context of the discussion surrounding job automation and saw that there are two main perspectives that can be taken, one where jobs will be mostly automated by new and emerging technologies that can do both physical and cognitive tasks better than human workers. The second, is where automation as well as new emerging technologies, create new sectors and industries and generate new jobs which need human workers. This week we will look into the latter perspective which can be broken down into two parts, previous transitions and their impacts and the augmentation potential of technologies.
Transitions
As the main premise of this side of the discussion mainly draws from historical examples, perhaps the most visual example that can be used is the shift from the horse and buggy to the automobile during the early part of the last century. Its also quite an important example as we are on the forefront of having autonomous vehicles permeate our roads, even Elon Musk recently said that next year (2020), Tesla will have over a million cars with full Level -5 self-driving (one where human isn’t required to be paying attention at all), whether true or a premature prediction, many other companies are working towards the same future goal. But as another episode will look at autonomous vehicles exclusively let’s turn back to horses vs cars.Though it depends on the location selected, between roughly 1910 and 1920 the Horse and buggy and horses in general were not used as the main mode of transportation in modern cities anymore and it was by 1950 that the same occurred for most farms.
For the sake of argument let’s look at one example, NYC where in 1900 there were 100,000 horses employed in the city’s transportation. This took the form of private coaches, smaller ‘taxi’ like cabs made for short distances like the modern taxi, omnibusses (up to a dozen horses pulling a large carriage filled with people, and the various carts hauling goods, mail and packages, and of course the waste from all the horses. Which in NYC with its 100,000 horses came out to a daily 2.5 million pounds or 1.1 million kilos of manure. Now, as someone who had part of their childhood on a small hobby farm which had a few horses, and 2 rambunctious 2 siblings who I would constantly get into trouble with, we usually had one very specific punishment. So I can speak from experience that it takes a lot of physical effort to clean up after that many 4 legged taxis. But apart from the cleanup army that was needed, buggies and harnesses had to be made by the thousands, vast amounts of land had to be dedicated and tended to as the typical horse consumed about five acres of hay and grain annually . Additionally, road maintenance was needed as wooden roads especially, dampened the deafening sounds of hooves but also needed to be replaced roughly every 3 years, be fore asphalt was fully used in 1938.
My goal here is to give a picture of the scope of how much peripheral work was also needed to make the transportation system of the 1900’s work this is especially important to note as the adoption of the car, brought massive impacts to these sectors as well. In 1890 there were 13,800 companies in the United States building horse carriages yet by 1920, there were only some 90 companies left. Due to the decline in the horse population the drop in demand for horse feed contributed to an agricultural depression in the 1920’s, and, during the great depression, worsened even further. In 1933, at the height of the Depression, the Bureau of the Census concluded that the transition from horses to cars was “one of the main contributing factors of the present economic situation” and had “affected the entire country.” However, the new auto industry created several new companies and jobs. According to the McKinsey Global Institute, between 1910 and 1950, the auto industry created 6.9 million net new jobs in the United States, equivalent to 11 percent of the country’s workforce in 1950. This includes 7.5 million jobs created and 623,000 jobs destroyed. These jobs represented new occupations that serviced cars and that utilized motorized vehicles for transportation and delivery.
Peripheral Jobs
New industries were created through the automobile, including the consumer credit system. By 1924, 75 percent of cars were paid for over time and represented over half the country’s retail installment credit as People needed to borrow money to pay for them. Cars typically were a family’s second most expensive possession even if they owned their home, like today. How many people connected this new invention to the creation of new jobs in this part of the financial sector? The shift from horses to cars was actually a 50-year period of change and cars overtook horses on city roads in the 1920’s. These are a few examples of the changes that happened and they give a good representation of what this main perspective encompasses, namely that the implementation and adoption of new technologies can eliminate entire industries and professions, while entirely new ones that can employ even more people than beforehand. For if we look back only a few decades ago several professions didn’t exist: examples like: online community manager, digital marketing expert, SEO specialist, app developer, Web analyst, data scientist, AI engineer, virtual assistant etc. This macro level idea can also be applied to more micro level situations if we fast forward to modern times. Computers were seen as perhaps the main technology that would automate human workers a few decades ago, yet today you’d be hard pressed to find a job without some form of computer use. Rather than automating us, computers have ‘augmented’ our abilities, by doing some tasks that were previously entirely done by human workers and enabling other forms of work to be focused on growing a business and enabling more people to be hired. A great example for this is the bank teller. ATMs were also seen as a technology that would eliminate the need for bank tellers, yet with the implementation of ATMs, banks reduced costs and were able to open more branches requiring the hiring of more tellers (from 1970 – 2010 bank tellers doubled). If one is to take this position then the same can be said for autonomous vehicles robots Artificial intelligence and other technologies.
Conclusion
This should give a good impression of the second point of view when looking at job automation. Another aspect that is important in these shifts is the speed at which these changes happened and how long people had to change trades. I specifically like the horse and buggy example as it was a clear 50 year transition, and the labour Absorption rate enabled the transition to go smoothly enough with companies and workers able shift industries and learn new skills and change company structures. Many of the horse carriage manufacturers actually became automotive manufacturers by switching the parts and processes that were used before. However, one of the very real worries is that with today’s exponential speed of technological growth this needed ‘re-skilling’ in order to stay relevant in the job market won’t be able to happen quickly enough and many people will get left behind through no fault of their own. So now that we’ve looked at both sides of the discussion, namely that either technology will eliminate the need for humans to work or that technology will continue to generate new industries and constantly create new jobs, the final thought that anyone should be left with is,will the future of automation play out like the past? Will the new emerging technologies allow partial automation and an increase in jobs or will things be different this time? Will the speed of technology be too great for our society and economy to adapt to? This is one of the main reasons that this podcast exists so as to explore this phenomenon
The goal of these first 2 episodes was to set the context for how to look at emerging technologies that are either being adopted or will be by our society. Over the next several episodes we’ll look at specific technologies and how they fit into this narrative.
If you’ve liked the podcast so far, please head over to Apple Podcasts to subscribe or wherever you listen to your podcasts and rate it and leave a review as well.
