Tuesday, November 3, 2015

Advice to give your kid in the age of AI

One of my sons graduated college with a business degree and a focus in Information Technology (IT).  At the time, the trend to outsource programming and other IT jobs to places like India was in its infancy.  When he asked for my advice, I told him he was in an industry that would likely grow for the duration of his career but it would be important for him to stay in jobs that required him to interact with customers face-to-face.  After all, no one can outsource human contact to another continent. 

It turned out to be good advice (at least so far).  Indeed a working paper authored by David Deming for the National Bureau of Economic Research suggests that social skills, especially when combined with math skills, are the most important element in adapting to a future where Artificial Intelligence (AI) replaces people doing routine work.  The study’s conclusions are backed up by a parallel study at University of California, Santa Barbara by Catherine Weinberger who concludes, in part, that the combination of social and cognitive skills has been important in career progression at least since the 1970’s and that a combination of the two has become more important to career earnings over time.

So, what does all this mean to today’s students?

Many experts tell us we shouldn’t worry about robots or other forms of AI taking our jobs.  But others – even those who promote the benefits of the AI revolution – worry that the pace of innovation will be too quick for the workforce to adapt. 

Already there is a hotel in Japan that is staffed entirely by robots and a factory in China that is similarly operated.  And, a 2013 Oxford University study predicts that 47% of workers in the U.S. will lose their jobs to automation over the next 20 years. 

You don’t have to look very hard to find analyses of how automation and AI have and will eliminate jobs. However, to project a future world of work, you have to look at how business strategies will change when enabled by these advances. 

Much of the improvements we shall see in the quality of products and services will not be the result of robots running the show but rather by virtue of the use of advanced sensing devices and data analysis.  In a manufacturing environment for example, such technology will better identify quality issues on production lines or monitor supply networks.  They will increase the demand for industrial engineers and people managing the supply chain. 

Businesses will use these advances to evolve their offerings consistent with the concept of ‘Shared Value’ advanced by Harvard’s Michael Porter.  For example, a manufacturer that sells industrial equipment like generators or turbines could offer its products as a service, installing and then remotely monitoring them to identify repair and maintenance issues before a breakdown occurs.  Maintenance and upgrades would be the responsibility of the manufacturer rather than the customer. 

The ability to interpret digital data and manage machinery to optimize availability and cost would be among the new skills required of technicians.  Like supply chain coordinators, industrial engineers, robot coordinators, simulation experts, data analysts, accountants and sales people, jobs that already exist will require new skills to accomplish them.  The careers of the next generation will require these skills. 

A traditional 20th Century college education – particularly the now overabundant undergraduate business degree – will not serve us well.  Where and how will these new skills be acquired?  How will the workers of the future know what skills to learn?

Moreover, what advice will you give to your kid when he or she graduates from college?



  1. When I was sixteen, some fifty three years ago, I knew of a company called Pipers of Poole (UK). They made Scotch Eggs and delivered them in very smart vans, with very smart van salesmen, from a very smart, fully automated factory. Hardly anyone actually worked in this glass palace, and almost no one got to see the inside, it was so secretive.
    Pipers Products were everywhere, delivering to pubs (of which there are many) and food establishments. A new wave of technology, the future?
    Well, it's all gone, closed down, not a trace of it to be seen, and only a few years after it's inception.

    Scotch Eggs? Yes, they're still around, but probably hand made and certainly not marketed with fervor of Pipers Products. I suspect it's demise was caused by poor management, or even greedy owners skimming too much off the top. Maybe too much capital investment in machinery and automation? No one would collapse a good business like this on purpose, so there must have been some sort of blundering somewhere.
    Maybe common sense or the lack of it, and maybe fifty years ago, a lack of business training? Whatever it was, it certainly wasn't solely automation that made this business fail.

    So before there's a mad rush to automate everything, I'd suggest that a good education in business management, marketing, book keeping, and a splash of Common Sense (acquired by experience) will still serve the new generation well, and should be the backbone of any business. And that is the advice I'd give my grand kids.

  2. I was selling robots to industry in the early 1980s (yes, before many people were buying them). The workers hated/feared the idea of being replaced by a mechanical machine, even though we always showed them that they were performing mechanical work (not the best kind of job for a human) and that they should move toward programming these machines to do their job, which they knew the very best. Robot programmers are much higher paid than mechanical labor providers.

    Combined with unbridled globalization, the information age with AI, and the fact that even low-labor-cost areas like China are applying mechanical (their labor costs have gone up) and information automation everywhere they can, this article's advice is spot on. I will recommend it to younger people looking ahead for a sound career.

    In the 'factory of the future' there are only two living beings: a watchman and a dog.
    The watchman is there to feed the dog; and the dog is there to make sure the watchman doesn't touch anything.

  3. @Erik. Great comment. I love the Covey reference.