I see a two tier economy opening up in England, and it’s not as simple as the haves and have-nots. It’s between those that build machines, and those that will be replaced by them: between those that can code, and those that can’t.
We’ve seen the massive social effects that declining heavy manufacturing jobs since 1970s have had on much of the North of England and Scotland, and I believe we’re at the start of a similar long-term decimation of service industry jobs – not due to outsourcing to China, but due to automation by computers.
Lots of my professional friends in London would feel they’re beyond the reach of this automation: their job involves being smart and creative, not doing production-line tasks. But it is these jobs, which currently involve staring at numbers on a screen, which are most at risk from computer substitution. If your job involves processing a load of data into a more presentable format (analysts, accountants, consultants and some types of traders) then a computer will eventually - within the next 20 years - be able to do your job better than you.
In fact, within 20 years computers will be much better than humans at almost every kind of data processing, as the relentless extension of Moore’s law means pound-for-pound computer processing will be 1 million times cheaper than it is now.
As Marc Andreessen put it, ‘Software is eating the world’, and we’re only just beginning to work through the implications.
This worries me. With the greater and greater levels of automation of the working world, what happens to employment?
Last year we saw an incredible event in the sale of WhatsApp to Facebook: massive wealth creation ($17bn) accompanied by almost no job creation (33 employees at the time of sale). If a tiny number of highly skilled people can create a service with 300m paying customers, why do companies need to hire lots of people?
In the utopian view of future work we give up all boring admin tasks to the machines, and focus on face-to-face interaction and making strategic decisions based on selected knowledge fed to us by our personal digital agents (like Google search on steroids). Lots more thinking space leads us to be more productive, and more leisure time makes us happier.
But 30 years ago they thought computers would evolve into very capable personal assistants, when in fact office workers are chained to the screen for longer hours by the tyranny of email and real-time information flow. Look at Apple’s forecast from 1987 of what computing might look like in 2006: the professor is freed from the tedium of typing or travelling to the library. Yet they didn’t consider whether the professor himself might be needed in a world where students could get their lectures as pre-recorded videos.
So the cynical view is that more volume of data will require more humans to interpret, and the technology will always need fixing. As companies become more automated there will be more and more jobs shifting into analysis and IT support; analogous to how, as postal mail has been replaced by email, jobs in the company post room have shifted into IT support.
The problem is that there really are a limited number of humans that can set up and maintain the computers. I’d love to see society grappling with that limitation (see grass-roots initiative like CoderDojo) but there are some big barriers to retraining adults to code: limited maths skills, limited tolerance for the boredom of wading through code, and limited opportunities for people to test their skills (i.e. companies don’t trust this most critical of job roles to new apprentices).
So those that have commercial experience in programming can command escalating day rates for their skills – and this is most apparent in London and San Francisco, while pay in other skilled areas is not even keeping up with core inflation.
That leads us to the dystopian view: that the generation starting their working lives now (those 10 years younger than me) will see their prospects hugely diverge, based on which side of the ‘replace’ or ‘be replaced’ divide they are.
If companies akin to Google and Facebook become the mainstay of the global economy, then they’ll be a tiny number of silicon sultans whose every whim is catered for – and a vast mass of technology consumers with little viable contribution to the workplace.
Let’s hope our politicians start grasping the implications before they too are replaced by ‘democracy producing’ software!