Brenda Vingiello, Sand Hill’s Chief Investment Officer, joined Squawk Box to discuss her thoughts on the latest market trends and market outlook for 2025. This
The Robots are Coming!
Published Date : October 30, 2018
Before earning the moniker “Gen X”, my generation was known as the 13th Generation (being the country’s 13th generation since American Independence). While not the luckiest of numbers, I’ve always considered our generation to be fortunate, having grown up before the technology revolution as well as having benefited so substantially in our work and lives from its unfolding. But “every revolution demands the sacrifice of a generation”, or so the old saying goes, as anxiety builds around the coming revolution in robotics and artificial intelligence.
This angst, and the idea of a generational sacrifice to technology, centers around the idea of robotics and artificial intelligence adoption happening much faster than anyone expects, leaving policymakers and economists scrambling for societal solutions. The primary concern is that lower skilled workers, with more easily automated jobs, will bear the brunt of this disruption, further polarizing the workforce economically in the years to come.
Several years ago, pessimism on this topic reached an extreme with well-established think tanks estimating an eye-popping 47% of jobs in the United States would be automated within a generation.1 Today, cooler heads prevail, and policy experts believe that perhaps between 5% to 10% percent of jobs in the United States are fully automatable over the next 20 years.2 This is due to the fact that most jobs are actually difficult to automate as they require the capacity to negotiate social relationships, creativity, complex reasoning and the ability to carry out physical tasks in an unstructured work environment. Yet anxiety persists, and many believe this time is going to be different.
It’s important to remember that for most of the last 13 generations, we were an agrarian society, living hand-to-mouth and season-to-season. As we built better farming techniques, technology destroyed our farming jobs. Every time farming technology advanced, more workers could either specialize in an incremental trade or continue farming, creating even more economic value for the community. Rather than the prevailing fear of wide spread unemployment during such periods, technology actually created more jobs than it destroyed and drove substantial gains in productivity.
Arguably, the last 20 years has been the most dynamic period of technological disintermediation in history, yet productivity improvements continued to hold. The significant outsourcing of manufacturing jobs, the displacement of traditional industries by internet commerce, and the rise of the so-called Gig Economy have not resulted in an economic dystopia of mass unemployment. Instead, we currently enjoy the best job market in recorded history, with rising wages and participation as well as an environment with more job openings than job applicants to fill them.
For those 10 to 15 million people in the United States who don’t participate in the knowledge-based economy, this technology revolution will certainly be turbulent over the next generation, and anticipatory policymaking will be necessary. This is one of the reasons we are hearing more about the importance of a national social contract as well as concepts like a universal basic income.
What we do know for sure is that the nature of our work is going to change. The coming era ushered in by artificial intelligence and robotics will enhance our existing skills, enable people to achieve more, and make our professional lives more fulfilling and stimulating. And that will be an exciting proposition for the 14th (Millennial) and 15th (Homeland) generations – and something our kids and grandkids can look forward to, rather than fear, in their future.
1Jackson, Gavin. “Job Loss Fears From Automation Overblown.” Financial Times. 1 April 2018.
2Cass, Oren. “’The Future of Work’ and ‘Human + Machine’ Review: Reckoning With the Robots.” Wall Street Journal. 24 June 2018.
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