Summary: It’s been almost 4 years since the first article appeared on the FM website warning about the next wave of job losses from automation. Now experts slowly begin to grapple with this problem, estimating its magnitude, extent, and possible solutions. Here we look at three of these. Properly managed, the 3rd industrial revolution will be an unmixed blessing to all. But only if we manage it better than we’re doing with simpler problems today.
We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.
But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem. I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day. There would be nothing surprising in this even in the light of our present knowledge. It would not be foolish to contemplate the possibility of afar greater progress still.
“Economic possibilities for our grandchildren” by John Maynard Keynes, The Nation, 11 October 1930. He had confidence in our ability to solve both economic and political problems of modernization.
- Retail: an example of the coming wave of losses
- Number crunching to estimate the jobs at risk
- A more realistic analysis
- For More Information
(1) Retail: an example of the coming wave of losses
The next industrial revolution will improve productivity in many ways, not just the simple machine-replace people exchange seen so often in the past.
Fifteen million people work in retail, plus millions more in jobs supporting them. A large fraction of those jobs will go away in the next decade as e-commerce gains market share. Salespeople, the people that run and maintain the companies and the stores, the people that maintain the buildings — a widening circles of impact.
Here’s one of the many articles appearing as the inevitable approaches: “The Tipping Point (E-Commerce Version)“, Jeff Jordan (Partner, Andreessen Horowitz), 14 January 2014 — Excerpt:
We’re in the midst of a profound structural shift from physical to digital retail. The drivers of this shift are simple:
- Online retail has strong cost advantages over its offline counterparts and is rapidly taking share in many retail categories through better pricing, selection and, increasingly, service.
- These offline players have high operational leverage and many cannot withstand declining top-line revenue growth for long.
- The resulting bankruptcies of physical retailers remove competition for online players, further boosting their share gains.
So, how has this shift been playing out? Recent data suggests that it’s happening faster than I could have imagined.
The data suggests that there are two very different patterns going on with respect to e-commerce penetration. The two largest categories — “Food and Beverage” and “Health and Personal Care” — show e-commerce penetration well below the overall average. These categories essentially are the domains of grocery stores and drug stores, and e-commerce (at least to date) has achieved only modest penetration of these massive categories (but Amazon Fresh has designs on changing that).
… One additional observation is that the pace of online share gain in the specialty retail categories shows absolutely no signs of slowing down.