The Arc of Automation

In China, a brave new factory eliminates the vast majority of its workers, and productivity is up!

One of China’s first unmanned factories in the city of Dongguan recently replaced 590 of its workers with robots and the results were astounding. While the factory used to be run by 650 employees, only 60 of those people still work at the factory and their primary job is to make sure the machines are running properly, not working on manufacturing…

Since the shift to robots, pieces per person per month has risen from 8,000 to 21,000—a whopping 250% increase. While some may argue that quality of the product will decrease with the use of robots, this doesn’t appear to be the case either. The number of product defects has decreased from 25% to just 5%.

Meanwhile, the NY Post reports on Amazon’s plans to enter the supermarket industry, albeit with next-to-zero humans involved:

The ground level of the futuristic prototype — a supermarket-sized version of its recently unveiled “Amazon Go” convenience store, with a bigger layout that could span anywhere between 10,000 and 40,000 square feet — would be devoted to goods that shoppers typically like to touch, sources briefed on the plans told The Post.

Those could include as many as 4,000 items, spanning fresh fruits and vegetables, eggs, meats and cheeses, and grab-it-and-go stuff like beer and wine, the sources said. Pharmacies might also might spring up at some of the high-tech locations, as Amazon looks to break into the lucrative sector, insiders said.

But for many, the most striking feature of the bigger stores is that they could operate with as few as three employees at a time. Sources said the plans call for staff to max out at 10 workers per location during any given shift…

Labor accounts for the lion’s share of a supermarket’s operating costs. In 2015, the industry employed 3.4 million workers nationwide, with an average grocery store employing 89 workers to generate annual sales of more than $2 million…

In December, the Wall Street Journal reported that Amazon envisions opening as many as 2,000 brick-and-mortar grocery stores across various formats — a number the company disputed.

If we could only eliminate the need for labor entirely, we would have the highest productivity levels imaginable, a libertarian’s dream.

The Future Of Employment: How Susceptible Are Jobs To Computerisation?” is a 2013 paper by Oxford professors Carl Benedikt Frey and Michael A. Osborne.

ABSTRACT: We examine how susceptible jobs are to computerisation. To assess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupation’s probability of computerisation, wages and educational attainment. According to our estimates, about 47 percent of total US employment is at risk. We further provide evidence that wages and educational attainment exhibit a strong negative relationship with an occupation’s probability of computerization.

In the same way that international trade agreements like NAFTA gutted Middle America of its manufacturing jobs, job automation will greatly impact both blue and white collar workers… and will be global in its impact.

Eventually, the world’s entire workforce will be like… Flint, Michigan.

And the social upheaval and unrest that will ensue will be historic.

This entry was posted in Economics, International, Technology. Bookmark the permalink.