I Want to Eat Your Job!

Strange how completely out-of-touch the political leadership in this country really is… not an uncommon reality for the rest of the world as well. But for whatever reason, the United States is well-behind most of the developed world in generating a sociopolitical response to the very technology for which we are the global innovative leaders. At least for now. Artificial intelligence. AI. Within the next two decades, a further (yes, I said “further”) third of current jobs will be sucked into the vortex of AI, spitting out highly trained employees into the waste bin of obsolescence. Machines will simply replace them.
 

Our politicians (both parties!!!) are still mired in the long-past negative impacts of global trade on American jobs, but that hasn’t really been the real elephant in the room for over a decade. We think of China as the perpetual provider of cheap labor, but that too is becoming mythology. From 2011 to 2016, average wages in China increased by 63%!!! Our “I didn’t too so well in my chi chi college” President is drilling down on bringing manufacturing back to America! Not much of a challenge for industries that rely on automation, where the machine owners prosper (the one-percenters) but relatively few new jobs, and certainly not well-paying jobs, are created. Oh, and it seems that virtually all of that reshored manufacturing is going to those rather fully-automated plants.
 

Simply put, focusing on international trade agreements and “bringing jobs back to America” are irrelevant red herrings. Slogans that even if implemented won’t budge the good-job employment needle at all. The polarization that is more rampant in the United States than anywhere else in the developed world is actually getting worse, not remotely because of globalization but because only the rich can afford the machines that are replacing workers… and they grow richer by taking that lost income for having invested in automation. And they now have a tax reform act to give them more money that the rest of us will borrow (deficit spending carries interest) and pay back.
 

I’ve blogged how complex surgery is increasingly being automated (see the Da Vinci Surgical System pictured above), and we know how the fall of oil prices has pushed drilling rigs into an entirely new automated universe with vastly fewer workers. Law firms rely on AI for legal research, and online “intelligent” legal forms and assistance are becoming standard for so many ordinary tasks. In fact so many economic and financial transactions and analyses are routinely automated, and “programmed trading” has completely altered the functions of our stock markets and share prices.
 

But there are darker issues we need to face. Indeed, in a world where competitive advantage is often determined by the deployment of software combined with invasive data scraping, often on a massive scale, that older legacy companies and systems collapse as technology giants either eat them or simply push them aside. As Facebook and Google rise, as they envelop entire business sectors with massive underlying consumer information and access, they serve as poignant examples of this “hostile takeover” before our very eyes. Black swans sweeping down on us.
 

Indeed, aside from military operations and government intelligence, the financial sector is perhaps the darkest side of AI. Not only are jobs going to be lost, but robotic information gathering will compromise the last vestiges of personal privacy for every man, woman and child in this country. Next.Autonomous.com calls it “Augmented Finance” and gives us these highlights for the future of jobs in this sector:

• In US alone, 2.5 million financial services employees are exposed to AI technologies. Potential cost exposure of $490 billion in front office (distribution), $350 billion in middle office, $200 billion in back office (manufacturing), totaling $1 trillion across banking, investment management and insurance
• In the front office, the most promising applications focus on integrating financial data and account actions with software agents that can hold conversations with clients, as well as support staff
• In the middle office, as regulations become more complex and processes trend towards real-time, artificially intelligent oversight, risk-management and KYC systems can become very valuable
• In product manufacturing, we see AI used to determine credit risk using new types of data (e.g., social media, free text fields), take insurance underwriting risk and assess claims damage using machine vision (e.g., broken windshield), and select investments based on alternative data combined with human judgment
• Many firms talk about AI, few actually hold intellectual property in the space, which creates Black Swan risk in the industry under winner-take-all dynamics

We’ve watched as theorists and economists (often in culturally, racially and ethnically highly homogeneous countries) have played with the notion of a “universal basic income” for every citizen, thus ameliorating, they hope, the impact of job loss through AI-driven automation. But what do people do? Do they get higher education? In what? Who pays for that? And what makes such theorists believe that people want to be equal? How are standouts rewarded? What does it mean to be a human being? Globalization is so irrelevant compared to these issues that are upon us right now. Driverless car or truck anyone?
 

I’m Peter Dekom, and sadly, the United States is among the least prepared nations in the world to deal with the super-polarizing ascension of AI as it sweeps into the job market, from the lowest to the highest skill levels in the land.