The Software Revolution

Disclaimer: The views, thoughts, and opinions expressed in this article are those of the author and do not reflect the position of the author’s employer or any other organization.

Back in April, I had the opportunity to visit Amsterdam and its surroundings.   The last time I was in the Netherlands was 15 years ago when I was living in Brussels, Belgium, as a member of GE’s Digital Leadership Development Program.  Back then, I focused my short visits to the touristic attractions like the Van Gogh museum, Anne Frank’s house, and others. This time, I visited Keukenhof Gardens and the villages of Zaanse Schans, Volendam, and Edam without any expectations other than joining my family in their new experiences in Europe.

The visit to the windmills to Zaansse Schans was, however, exceptionally illuminating.  As an engineer, I am always impressed to what we, as a species, have been able to accomplish throughout history.  I share the same passion with learning from people who were key in arriving to such achievements.   Not surprisingly, I was reminded during that visit that the Netherlands was one of the most powerful nations in the world, thriving with their “Golden Age” in the 17th-century.  One of the reasons of such progress was the use of windmills to power their infrastructure projects like land reclamation, ship building, and chocolate production, giving them the technology and innovation advantage; the innovation premium.

... with hand sawing, 60 beams or trunks would take 120 working days whereas with wind power this activity would only take 4 to 5 days.

Windmills are an engineering marvel, especially if you think of the time when they were built.   In generic terms, a windmill is a structure that converts the energy of the wind (Eolic) into rotational and heat energy. Hero of Alexandria, a mathematician and engineer who lived in the first-century Alexandria, is believed to have created the earliest known instance of using a wind-driven wheel to power a machine.  The first windmills appeared in Persia in the 9thcentury and were later independently developed in Europe.  

As I walked into the windmill at Zaansse Schans, I was immediately at awe.  I was nerding-out, literally.  This particular windmill was used as a sawmill.  At the end of the 16thcentury, the Dutch invented the world’s first wind-powered sawmill.  By any measurement, this was a major innovation generating major productivity increases:  with hand sawing, 60 beams or trunks would take 120 working days whereas with wind power this activity would only take 4 to 5 days. This productivity gain allowed the Dutch to produce ships faster and cheaper and gave them a major edge in their naval competition with other European countries.   

During my trip, I also had the opportunity to see another engineering wonder: a fairground organ (or band organ).  This amazingly cool device is a pipe organ designed to provide loud music to accompany fairground rides and attractions.  The fairground organs were very popular in the early 1900’s, as fairgrounds became more mechanized, as a way to mimic the musical capabilities of a typical human band without a human performer.  A band in a box, if you will.

Although both the windmill and the fairground band have now been displaced by combustion and electric engines and electronic devices, they can still teach us something.  Imagine yourself in the Netherlands back in the 16thcentury and that your likelihood depends on manually sawing wood trunks.  You work restlessly day after day, even weekends (If I am not mistaken weekends is an 20th-century invention, but bear with me) to bring bread to the table.  By the way, that’s pretty much the only job you know how to do because you don’t have a master’s degree from MIT and societal rules dictate your career should follow that of your parents. And all of the sudden, the windmill disrupts your market.   The windmill is your new competitor and it can do your job faster and cheaper, at scale.   Wouldn’t that be scary?   I am sure it would be, even for today’s standards.  

From what the tour guide told me during my visit, the real Dutch workers were not happy at all.   I am not sure what actually happened with all those workers but I know what happened with the windmills:  they won.    As Charles Wheelan explains in his book, Naked Economics, we all look to maximize our utility and in the economic context of the Dutch, building ships faster and cheaper was a way to maximize theirs. With these windmills now in production, new jobs were developed to engineer, build, maintain, and service the windmills as well as new professions in the new industries that were spun-off thanks to the windmill.   I am thinking Chocolatier. The implicit idea behind this cycle is what Joseph Schumpeter coined as "creative destruction".

Was that the same case for the fairground organ?    I don’t believe so.   They didn’t quite make the same impact economically speaking.   In the innovation space, the fairground organ wouldn’t be considered a major innovation for that reason.  Although, the sound amplification technology that made the fairground possible was.  I really can’t imagine Chopin or Beethoven being worried about this mechanical monstrosity (their words, not mine – probably).  Did the fairground organ displace any jobs?  Probably yes, a few.  Did they create new jobs? Probably yes, a few.  Perhaps, the total net was positive or just flat.   I’m pretty sure Shakira is not worried about the organs (the organ I had the pleasure to listen to was playing Shakira’s “Te Aviso, Te Anuncio” song.  Funny. Got it?)

There is a significant difference to consider [in the Software Revolution]:  the jobs been affected include “white-collar workers”.

In my opinion, the lesson these technological advancements are giving us, should be of preparedness.  Are we ready, as a society, for the next big revolution?  It happened with the windmills, then with the combustion engine (the industrial revolution), and then with the invention and democratization of computers.   Some scholars argue we only have seen one major revolution, the industrial one, when economic productivity and the social development index are considered.  

Regardless, I can argue that from the perspective of the working class, these are all major revolutions that threaten them with job elimination by new technology; creative destruction.  I can also argue that we are at the dawn of the next revolution, this time powered by software, specifically automation and Artificial Intelligence (AI).  And, this time, there is a significant difference to consider:  the jobs been affected include “white-collar workers”.   The McKinsey Global Institute published a great tool to understand the automation potential for US jobs.   Here’s the link.

Just like in the previous revolutions, new jobs will be created.  I believe most researchers and scholars, who are studying the topic of automation and AI, agree with this statement.  The challenge is to fully predict what these jobs will look like.    Still, there are lot of questions, covering an entire spectrum from policy to moral principles, that would need to be answered.  What is the role of government to prepare us for the next revolution?  Should companies be responsible to re-purpose their employees or are employees responsible to self-educate?  Is our education system capable to preparing our younger generations for their future?  I don’t believe the revolution can be stopped, it’s pure economics.   I do believe we all have a part on preparing for it.   As a parent, I’d like to be able to guide and coach my children through their future educational and career decisions.   

What are you doing to prepare yourself, and help prepare others, for the software revolution?