100 percent unemployed-20141208

1. Of Chessboards and Rice And 100% Unemployment Ellermeyer Connect Breakfast October 22, 2014 10/22/2014 ©dbkAssociates, Inc. 2014 1
2. Premise – trending to 100% Unemployment • There is no work related human activity that a machine will not do better • If “we” can do it, we will do it — no stopping technology • We are now on the steep part of the exponential technology growth curve 10/22/2014 ©dbkAssociates, Inc. 2014 2
3. What’s in a number? What happens if you put 1 grain of rice on the first space, 2 on the second, 4 on the third, and on . . .? You wind up with a rice stack as high as Everest! 10/22/2014 ©dbkAssociates, Inc. 2014 3
4. Here’s what that looks like 10/22/2014 ©dbkAssociates, Inc. 2014 4
5. Modern example: Moore’s Law Plot of CPU transistor counts against dates of introduction. Note the logarithmic scale on ordinate or “Y” axis; the trend line corresponds to exponential growth with transistor count doubling every two years. From 28nm on, cost will go up as we double the transistors on a die. 10/22/2014 ©dbkAssociates, Inc. 2014 5
6. Kevin Surace Kevin Surace is an American technology innovator and serial entrepreneur. He is the CEO of Appvance, a provider of web app validation software and services. He was Inc. Magazine’s 2009 entrepreneur of the Year. Born: 7/12/62 Education: Rochester Institute of Technology “Humans will be obsolete by the year 2064.” — Kevin Surace, TEDx Orange Coast, 9/19/2014 Employment 10/22/2014 ©dbkAssociates, Inc. 2014 6
7. Andrew McAfee Andrew Paul McAfee is the associate director of the Center for Digital Business at the MIT Sloan School of Management, studying the ways information technology affects businesses and studying business as a whole. Education: PhD, Harvard Business School “I honestly believe that I’m gonna live to see a ridiculously bountiful economy that just doesn’t need very much human labor.” — Andrew McAfee, Council on Foreign Relations, 10/6/2014 Employment 10/22/2014 ©dbkAssociates, Inc. 2014 7
8. Mike Farmer – Leap.it The Start-Up Job Myth When Mike Farmer started a digital search company in 2004, he had a staff of 10. Today, in his third start-up, he has one employee: himself, aided by seven contractors working more or less part time. His budget, like his head count, is smaller, and by his account the new model is much more sustainable. Employment 10/22/2014 ©dbkAssociates, Inc. 2014 8
9. The 99.9% “At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast.” NICK HANAUER IS ONE OF THE MOST SUCCESSFUL ENTREPRENEURS, INVESTORS AND MANAGERS IN THE NORTHWEST Employment 10/22/2014 ©dbkAssociates, Inc. 2014 9
10. Start-ups fewer and leaner Employment 10/22/2014 ©dbkAssociates, Inc. 2014 10
11. For more than 200 years . . . • We have predicted technology killing jobs • And, it HAS killed many jobs, AND . . . • It has created more jobs in the end, AND • It has created more wealth in the end. Still… Hasn’t it always been the “human dream” to be free from a job and just do what we want, when we want? To pursue our passion regardless of financial rewards? Be careful what you wish for! Employment 10/22/2014 ©dbkAssociates, Inc. 2014 11
12. 10/22/2014 ©dbkAssociates, Inc. 2014 12
13. So why different now? • Between 31% and 34% contingent workers – Project to be 40% by 2020 • Startups 4.7 employees vs 7.7 in 1999 • On-shored mfg. employs 50-80% of workers • GDP is ~ 16.7 T with same employed as 14.7 Exponential Growth in Technology trumps all past history. 10/22/2014 ©dbkAssociates, Inc. 2014 13
14. Hope is not a strategy So, now what? Don’t leave me in this funk. 10/22/2014 ©dbkAssociates, Inc. 2014 14
15. Accept reality • We will not “stop” technology’s advance • We must do all we can to embrace technology • Must improve US education – STEM • Encourage entrepreneurs and • Portfolio work, independent contractors • Be open to new economic models (guaranteed minimum incomes for everyone perhaps?) 10/22/2014 ©dbkAssociates, Inc. 2014 15
16. There is a little transition time • Economic models will change • Business models will change • Collaboration is critical • Real NetWORKING • Re-invent yourself • Free Agent – truly • New ways to add value 10/22/2014 ©dbkAssociates, Inc. 2014 16
17. References • The Age of Spiritual Machines – Ray Kurzweil • The Second Machine Age – Erik Brynjolfsson • Big Bang Disruption – Larry Downes • Importance of Startups – Kauffman (2010) • Don’t judge the Economy by startups – HBR • The Era of Technological Unemployment – McAfee 10/6/14 10/22/2014 ©dbkAssociates, Inc. 2014 17
18. References - Continued • This is probably a good time to say that I don’t believe robots will eat all the jobs. Marc Andreessen, 6/13/14 • Special report on the Economy – The economist, 10/4/2014 • The Pitchforks are Coming – Hanauer 7/2014 • Too Easy to Dismiss Tech Critics – Forbes 9/19/14 10/22/2014 ©dbkAssociates, Inc. 2014 18
19. References, Continued • How To Avoid A Fully Automated Future – OnPoint podcast, Carr, 9/30/14 • Temp work raises long-term questions for economy – CBS News • Trickle Of Jobs Returning To U.S. Shores Could Soon Become A Torrent – Forbes, 2/27/14 • Who actually creates jobs? Washington Post, 4/25/13 • Life at the Speed of Light – J. Craig Venter 10/22/2014 ©dbkAssociates, Inc. 2014 19
20. Discussion – Factory of the Future The factory of the future will have only two employees. A man and a dog. The man is there to feed the dog. The dog is there to keep the man from touching the equipment. —Warren G. Bennis 10/22/2014 ©dbkAssociates, Inc. 2014 20

Notas do Editor

Thank you Bill for this opportunity to share something that’s been at the forefront of my mind since 2009; Technology and Society. I hope we can engender a lively discussion.
Many wish to think that humans are somehow different. Science is proving every day that we aren’t much more than information. Machines are now directing human researchers to the most fruitful line of research. Machines are managing other machines. There are many examples you can give. It seems everyone has a story about how automation has made significant changes in their lives.

The exponential growth curve is a significant part of this thesis. So I want to spend a few minutes helping us understand just what that might mean.

“On April 21 we had the results from sequencing the DNA from the living synthetic cells, and there was no longer any room for doubt: the cell had been controlled only by the genome that we had designed and synthesized. The sequence showed our genome to have the 1,077,947 base pairs, exactly as intended, including nineteen expected differences from the native genome, as well as the four watermark sequences, a critical part of the proof that the DNA was synthetic. Just as we had suspected, a one-letter deletion out of over one million base pairs of DNA had made the difference between life and no life. I can think of no more dramatic illustration of how information plays a central role in life.” — J. Craig Venter
First, I’d like to share this story – some of you likely know it already – about Chessboards and Rice.

A man invents a new game, chess, and presents it to his king. The king likes it so much that he offers the inventor a reward of his choice. The man asks for one grain of rice for the first square of his chessboard, two for the second, four for the third and so on to 64. The king readily agrees, believing the request to be surprisingly modest. They start counting out the rice, and at first the amounts are tiny. But they keep doubling, and soon the next square already requires the output of a large rice field. Not long afterwards the king has to concede defeat: even his vast riches are insufficient to provide a mountain of rice the size of Everest.
In order to give you a visual, I “ran the numbers” in a spreadsheet.

You are reading this correctly. The final square on the chessboard would contain 9.22 x 10 to the 18th grains of rice, or 9.2 quintillion grains.
And here is what exponential growth looks like in putting transistors on a semiconductor chip. Note that the ordinate or “Y” axis is logarithmic. This is what is driving all our conversation today around Technology and society. Specifically, it would be foolish for us to underestimate the ability of the technology community to build intelligent machines and systems.
http://en.wikipedia.org/wiki/Kevin_Surace

Mr. Surace is a highly respected technologist and futurist. From his vantage point, he believes humans will be obsolete as far as work is concerned, and it will be a mere 50 years from now.
http://blogs.rollcall.com/technocrat/is-the-era-of-technological-unemployment-finally-coming-and-how-do-we-avoid-it/

Andrew McAfee doesn’t declare that humans are headed for obsolescence but he does believe that we will need fewer and fewer employees.
http://www.nytimes.com/2012/10/05/business/entrepreneurs-starting-up-with-fewer-employees.html

So, fewer pain-in-the-butt employees, smaller budget, better business model all by leveraging technology. What’s not to like?
Read more: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#ixzz3Fy6tSpO5

Hanauer is leading the charge to raise the minimum wage. He sees that as an imperative for keeping the consumption economy going. There is little doubt that we are hollowing out the middle in our economy. The data are pretty clear.

The top 10% earn almost 50% of national income. Meanwhile, workers in the U.S. have seen their share of the national income go from almost 60% in 1980 to 55% in 2010. Four years later it’s worse.

Now some say that these super rich folks actually give back by forming new companies and investing. The data shows that is not really true. The next slide gives a hint that the myth of startups is soon to be broken.

“The digital revolution is opening up a great divide between a skilled and wealthy few and the rest of society.” — The Economist
But before you start celebrating, look at the data for startups.

None of this looks good for employment but don’t assume that this is bad long term. It just simply is what is so.

What does this look like? Here’s an example.
As I’ve said, we have gotten it wrong for 200 years. This time though, things will be different. I know that is true, but how will they be different?
The beautiful Wailua River in Hawaii. Are things different now? Yes, is the answer. “We” have been saying that technology would kill all our jobs and have been proven wrong many times. In fact, more jobs and more wealth has been created.

On the other hand, as Heraclitus said, “No man ever steps in the same river twice.” So this time, the predictions may be a lot closer to true than ever before.
So what’s different now? Why isn’t this the same river we’re stepping into?

My view is that technology is accelerating much faster than we are able to change and upgrade our skills. We no longer need people to make machines. Machines are making machines. Computers are programming and configuring computers.

Note: 70% of US GDP is personal consumption, STEM enrollment and student performance is horrible compared to other countries. So far, while employment has indeed improved, only low paying jobs are being created.
So we looked at What’s So. Jobs are trending down. I say at an alarming rate.

We looked at So What – we are killing the consumers and our economy is based on consumption.

The next thing to think about is Now What.
In this global economy, where each country is struggling to survive and/or thrive, there is no way we are going to stop technology from advancing. It’s too important and creates too big of a competitive advantage.

So we must embrace technology. We have to learn how to work with, around and leverage intelligent machines and systems. Otherwise, we aren’t really needed.

Prepare our kids through insisting we fix education. And it isn’t more of the same. It’s not about class size. It’s about what and how we learn.

Everyone needs to be an entrepreneur.

Many of us will be independent contractors and so, in effect, an entrepreneur where WE are the enterprise.

We have to be open minded. We can’t try to live in an old economic model when that model was based on people and people are soon to be obsolete.
It will take work. But we can make this transition.

We will need to learn best practices from other people, companies and countries. We can’t afford stagnation due to a “Not Invented Here” attitude.
http://blogs.hbr.org/2014/10/dont-judge-the-economy-by-the-number-of-start-ups/
http://blogs.rollcall.com/technocrat/is-the-era-of-technological-unemployment-finally-coming-and-how-do-we-avoid-it/
http://blog.pmarca.com/2014/06/13/this-is-probably-a-good-time-to-say-that-i-dont-believe-robots-will-eat-all-the-jobs/
http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.VDrg0fldWbN
http://www.forbes.com/sites/privacynotice/2014/09/19/why-its-too-easy-to-dismiss-technology-critics-or-the-fallacies-leading-a-reviewer-to-call-nicholas-carr-paranoid/
http://onpoint.wbur.org/2014/09/30/nicholas-carr-automation-technology-future
http://www.cbsnews.com/news/temp-work-raises-long-term-questions-for-economy/
http://www.forbes.com/sites/allbusiness/2014/02/27/trickle-of-jobs-returning-to-u-s-shores-could-soon-become-a-torrent/
http://www.washingtonpost.com/business/on-small-business/who-actually-creates-jobs-start-ups-small-businesses-or-big-corporations/2013/04/24/d373ef08-ac2b-11e2-a8b9-2a63d75b5459_story.html
I’m hoping we will discuss your ideas on how to navigate this coming 50 years.

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