Monday, November 28, 2011

Race against the Machine Review

I just finished the book, "Race against the Machine," and I cannot stop thinking about it.  The book tackles the impact of technology on the current unemployment figures.  The hypothesis is that technology is the driving factor behind high unemployment. The book points out that while unemployment is high, corporate profits and GNP are at record or near record levels.  Why is that?  Broad swaths of the economy are being automated by technology and this is likely to continue or accelerate.  Due to Moore's Law, the power of computers is growing at an exponential rate, and now we are starting to be able to do things with computers that really can replace humans.  For example the book covers the fact that just a few years ago it was inconceivable that cars could drive themselves.  Recently Google cars have driven over 100,000 miles under the control of the computer.  That is some very fast progress, and it isn't hard to imagine our cars driving on their own in the not too distant future.

The book also makes the point that as computers automate much of our economy, we will see more stratification of the workforce.  One group will be the winners. These could be the folks who have created the new technologies (e.g., Google, FaceBook, Apple, etc) or folks who really know how to leverage them.  For example, the book says that the best chess players are teams that pair computers with humans.  A second group will be those in very manual jobs that are hard to automate (e.g., hairdressers).  Those jobs are not going away anytime soon. That leaves the rest of the economy which is at great risk of automation.

This book rings true on so many fronts.  I cannot believe it was just a few years ago that there was no iPhone. Just think about how much the iPhone (and other smartphones) have turned our worlds upside down in a few short years.  Siri, Watson, and some of the other great computer advances of the past couple years are proving that computers can finally do things that we may never have thought they could.

In addition, I see business after business using technology to streamline operations, thereby trimming headcount.  Look at the package delivery business.  Fedex, UPS, and others now rely heavily on GPS and automated delivery routes that make delivery routes much faster, enabling these companies to delivery the same number of packages with fewer people.  In addition, they have started to implement keyless ignition systems so drivers to speed up each stop.  These small steps drive down labor needs in these industries.

The book ends on a high note talking about all the opportunities of technology.  Having said that, it cautions that we need to get our education system in order to be able to take advantage of those opportunities.  I completely agree!  These new jobs require advanced skills and advanced degrees.  Many of them require sophisticated knowledge of math, technology, etc, and we are not training enough people with those skills.

Ironically the Wall Street Journal ran an article this past weekend that was very similar.  It talked about how certain industries cannot find people who have high end skills, even in these times of high unemployment.

The book is a must read for anyone interested in technology, whose job is at risk of automation, or with kids that will be coming into the workforce.  In other words, it is a must read for almost everyone!