Software is eating our jobs. Ed Toolbox makes this fact easier to digest.

Software automates processes and activities. And it can do it very well. Over the last sixty years we have become familiar with the power of software and the many different ways it has been used to enhance our lives.

Our computers, mobile devices, and countless products and services use software to do what they do. The financial management and business management tools, the games, media and image tools, the sensors and telecommunications tools, the robotics and automation tools are all powered by software.

Artificial Intelligence (AI), 3D printing, Augmented Reality, Internet of Things, Blockchain, Cloud services, BIM, GPS, 5G, Cryptocurrency, Cybersecurity, Drones, Digital Identity, IP protection, Robots, Virtual Reality, Amazon, airbnb, Freelancer, Google, Uber etc and even “fake news” and manipulation of elections are all driven by software.

Software automates processes and activities and as well as delivering benefits in efficiency, productivity and reliability, it also “eats jobs”.

Because many of the tasks that software now does so well, used to be done by a person. The process or activity is automated and a person is then replaced by software.

As a result, businesses and other organisations can do “more with less”. Businesses and other organisations can become more profitable “reduced payroll”. Businesses and other organisations can become more productive.

The impacts of software on society are game changing and revolutionary. It’s not called a digital revolution for nothing. And the impacts will continue as long as the revolution continues. Which could be for decades.

We are getting better at how we use software. The channels, networks and connections between people, businesses, countries and organisations of all kinds proliferate. Just about everybody has a mobile computer in their pocket, on their wrist, on their desk, in their car, or in their backpack.

Hundreds of thousands of software developers are creating more software every day in every country on the planet.

And like all tools, there is an upside and downside to this revolution. 

Undoubtedly, there is a huge upside. Software is improving just about every aspect of our day-to-day lives. Can’t argue with that. 

But there is a cost. 

There is a real cost that we pay for all these benefits.

Of course we pay for the software we use with cash.

But we also pay in many other ways, some subtle, some not so subtle.

In China, the whole population is paying for the benefits of software, by losing control of personal destiny. In return for a cashless society, connection, communication and social media tools, Chinese citizens have accepted the “social credit” system, the loss of privacy, and manipulation by the state, which extends even beyond the borders into many other countries through influence of the Chinese diaspora.

The Chinese government plans to catch up with the US on AI technology and applications by 2020 and to become a global AI innovation hub by 2030. 

President Xi Jinping has encouraged further integration of the internet, big data, and artificial intelligence with the real-world economy. 

Software.

And of course China is just one example. The benefits of software are paid for (not just in cash) in other countries as well. And we each have to consider what this means in our country, in our city, in our job, in our school, in our family and in fact everywhere software has an impact. 

What are we paying in return?

Cyber bullying. Scams. Privacy. Identity theft. Security. Intrusion. Facial recognition. Fake news. Electoral interference.

These are the more obvious tolls that we pay. And many of us are willing to pay.

But there is another erosion, which continues to grow steadily as a result of software intruding into more areas of our lives, and that is job destruction.

Software automates processes and activities. A process is automated and a job disappears. More processes are automated, and more jobs disappear.

What began in a simple manner with office and design software in the 1980s, has now become incredibly sophisticated. Software for everything.

And now robotics, automation, machine learning and artificial intelligence are all evolving swiftly. Driven by competition between the USA and China, plus Israel, Japan, Germany, Russia, Korea, UK, EU and even Australia and New Zealand. 

Google DeepMind’s AlphaGo software beat the best human “Go” players in early 2016. AlphaGo Zero was introduced in 2017 and learned by playing games against itself, and within 40 days was superior to all the earlier versions.

Inevitably, machine learning will be applied to customer service, telemarketing, analysis, financial services, diagnostics, warfare, criminal activity, assembly lines, transport, retail and most blue-collar and white-collar work. More processes and activities can and will be automated in due course.

Software eats jobs. It will create some new jobs, but eliminate a lot more jobs in the process.

We can argue about the scale of the impact and the when, but the impact is undeniable.

What the results of our 50,000 surveys into adoption and use of ICT demonstrated was pretty much the same as what Benedikt Frey and Michael Osborne from Oxford Martin School found in 2013, when they published their report stating 47% of jobs were under threat from robotics and AI. And they revisited that prediction recently and found the same result.

About half of all jobs can be done better by software. And at almost no cost. 

It is hard to argue with a CFO explaining to the board just how much money (payroll) can be saved and then delivered in dividends to shareholders by implementing new software. 

That argument wasn’t readily believed by CEOs and boards a few years ago, but today it is accepted with enthusiasm. 

There is still often over-promise and under-delivery, but software continues to improve. And will continue to improve.

So how do we manage this two-sided challenge? It’s largely a good thing. But there are negative side effects that need thoughtful consideration now. 

Net job loss is just one of them.

ED Toolbox is a simple tool to help students and parents better understand how disruptive technology (software) is changing the world. And then make better study and work choices.

https://www.edtoolbox.com.au/index.php

Used wisely, students and parents can make better study and work choices, and even begin to help sort out the world of work, by creating jobs themselves.

We also need to find the jobs that AI can’t do and train people to do them. We need to reinvent education. Corporates need to rethink the way they manage responsibility for their workers.

Professor Porter has been pointing this out for the last 10 years in his presentations on shared value and the role and responsibilities of business in society.

Amazon, one of the richest companies in the world is planning to retrain a third of its US workforce – 100,000 workers. Workers in their fulfilment centres who are being replaced by robots, are being retrained in IT support roles. Corporate workers can retrain as software engineers.

Not everybody has the capacity or the will to transform into ICT roles of course, so there will be spillage.

In Australia, the 4 big banks and 2 big telcos have got rid of about 50,000 people over the last four years – they didn’t offer staff retraining, even though they could have afforded it. 

And many smaller businesses and other organisations with little “financial fat or muscle” can neither afford to retrain or retain staff once software, robots, machine learning and AI have replaced them.

So we need to understand the threat and opportunity clearly. Software is challenging all industry sectors in Australia. For half of our industry sectors software offers many opportunities. For the other half threat.

But threat or opportunity, there is still net job loss. Software replaces jobs.

In this new “game” of musical chairs the chairs are being removed not just for the duration of the “game”. But permanently.

All the effort in the world to retrain people, help them gain new skills, change attitudes and expectations will come to nothing if businesses and other organisations no longer need those capabilities, because the operational process or activity has been replaced by software.

An administration person leaving a small business doesn’t feature in a news story. Yet we live in a country where half the working population is in small business. Software comes in – a person goes out. And that adds up to a lot of people.

The July figures from Roy Morgan show that 8.7% of the workforce is now unemployed and another 9.6% under employed – 18.3%. See Roy Morgan for more details. Fascinating, but challenging.

The challenges to jobs from digital disruption don’t all come in a rush. They arrive steadily, but they arrive remorselessly. They don’t knock politely on the door.

Most humans are not comfortable with change and will only adopt and use new things slowly. Which can work in our favour, giving us more time to consider and think.

The impact of new technologies (software) will continue for the next 15 to 20 years at least, which gives us time to act. But we have to prepare and act now. 

Some industries are being challenged first (now), with others having a lot more time to “avoid the flood and run for the hills”.

This process has to be managed wisely. There is already inequity in the society we live in. The continual impact of digital disruption will just compound this further.

IMF modelling suggests that there will be increasing wage disparity between the “new skilled” and the “low skilled” increasing inequality even further.

So we face a future with fewer jobs and lower wages for more people. 

Add that to high levels of household debt, stagnant wages, trade war and possible worldwide recession and we need to sharpen up our act.

We can push back and must push back. We are a rich country with many resources and in response to this challenge, we should focus on building our productive industries – agriculture, creative industry, defence, education, ICT, medical and health, manufacturing, mining services, smart trades and tourism. 

We have created many “hot spots” of innovation in these industries where we lead the world. These “hot spots” can be further supported, expanded and grown.

We can use software to add value through process innovation, and add even further value through design, branding and then export the result.

And it’s why we have to manage this transition with 20-20 vision. Not just let it happen without any management or control. Which is what we do at present.

There is a lot we can do to manage the future.

And we need to do everything we can. But we can start by helping students and parents – who are challenged by these changes – better understand the impact of disruptive technologies, and the industries under threat. This is about their study and work future.

Then students and parents can make better study and work choices, and even begin to help sort out the world of work, by creating jobs themselves.

This transition can be managed productively. We have the resources, the productive industries and there is no lack of good will. If we can just harness these collaboratively then the future looks good.

Entrepreneurialism needs to become universal. We are an amazingly well resourced country. We just have to use and husband all our resources like farmers, with intelligence, and a clear vision for a productive industry led future.

Understanding starts with awareness. The ED Toolbox helps in this regard.

https://www.edtoolbox.com.au/index.php

Ed Toolbox is simple. It outlines how technology is impacting 19 industry sectors and 400 business categories. It shows the level of threat and opportunity for each category and provides examples of how organisations are using technology in a positive way.

ED Toolbox is a tool created for students and parents. 

We are now configuring ED Toolbox for High Schools, which will include Groups, Resource library and Events mapped to a region.

Ed Toolbox for High Schools is designed to connect all High Schools in a region to local businesses, TAFE, Universities, incubators, parents and P&Cs, so that study and work discussions can be timely, relevant and real.

As I mentioned in my last post, “the factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

We don’t want this joke to become a reality.