Thursday, April 11, 2013

Technology and Jobs

Entertainment Weekly reported last month on the bankruptcy of the special effects company Rhythm and Hues and the troubled industry. I remarked five years ago that the special effects industry lost its ability to surprise us. Without the ability to innovate, and with most of the effects handled in software, the need for specialized talent and companies disappears.

We've always could take comfort that computation and its related efficiencies have led to more, often safer and higher paying jobs. But is that still true? The stock market has hit historic highs but the unemployment rate remains high. Are companies who pared down during the last recession realizing they don't need to hire as the economy comes back?

Erik Brynjolfsson and Andrew McAfee in their 2012 book Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, argue that computer technology has truly gotten us to the point where we need fewer people to perform the task at the middle of the economy. The world needs computer scientists and welders, but far less people doing mid-level professional work. On the other side, Henrik Christensen, a Georgia Tech roboticist, argues that technology will continue to produce far more jobs than it displaces.

My take: It's just too early to tell. The economy could completely turn around and near full employment. Or we can see a permanent loss in returning jobs. History doesn't seem like a good guide here.

There are so many issues tied to the current state of employment and this sense of technological efficiency replacing jobs: Is college really worth the cost? Should an undergraduate student major in a STEM field or follow their passion if it lies elsewhere? Do we need MOOCs to improve access to quality education and/or keep down education costs? Are academics the next group to meet the efficiency maker?

My oldest daughter starts college next year and I don't even know what advice to give her.


  1. "History doesn't seem like a good guide here."

    It also doesn't seem like a good thing in which to major if you want a career when you graduate, yet students do. The role of college used to be to provide some skills for all but also a well-rounded education to expand ones mind. When did the lie begin that it was required for so many jobs? As more jobs need more specific skills, taking a major that you enjoy for the sake of becoming a well-rounded and interesting person appears less and less wise for most. If someone from a generally middle-class home wants to go to a college that costs $40k a year and study Classics, I think that person is making a giant mistake. If they want to go to a college that costs $4k a year and do the same thing, knowing that it's not going to help much to get a great job, at least they are going in with eyes open and expanding their mind at a reasonable cost.

  2. 1) WHENEVER technology leads to job loss and then job gain, there will
    be people tossed out of work who don't get better jobs later.
    (One aspect of Creative Destructive)

    2) What jobs WON"T go away? My guess is truck drivers (though lance thinks
    Trucks will drive themelves in 15 years), Nurses, maybe Doctors, Service
    jobs (will waiters be replaced by robots), and of course the worlds oldest
    profession- FARMING. And the second oldest as well.

    3) Its easy for me to say `tell your daughter to take courses that she likes and things will work out', however, its YOUR house she'll move back into if she can't find a job, not mine. Even so, its usually good advice
    with the caveat of having SOME awareness of the job market.

    4) Tell her to work on P vs NP so that the 1,000,000 will set her for life.
    (High risk, High reward)

    1. car mechanic?
      glass worker?
      construction worker?

  3. From your reasoning, it is probably easy to give advice to your daughter: if she has no interests in being a welder, then she has to follow your steps:)

  4. Bill: FARMING?! That's a profession that is among the most hard-hit by technology. Of course it won't go away completely, but in developed countries it is a tiny fraction of employment: e.g. From more than 50% of population down to below 4% in the U.S.

  5. Choosing what major you would follow is a life decision. One should not base it on the predictions of some guy (except if he has the Urbana algorithm at hand).

    It also depends on the risks you are willing to take. I always wanted to be a researcher but I knew that in my country, research is not supported and that I would have to migrate to another country. I knew that risk and I gladly took it.

    I also believe that it works different for different people. For example, researcher seems like the only job in the world that I would be able to do for life and not get bored of. For others, it might be that they wouldn't stand 5 minutes of that job and find jobs extremely exciting that I find terribly boring.

    Finally, as the issue of technology vs employment, I believe that technology should always win, given that it will improve the quality of life for everyone, including future generations. The classical example for this would be the printing press or the industrialization of the 18th and 19th century. Sure, many at that time might have been put in a difficult place, but even if we disregard the boost in new jobs, the quality of life for future generations greatly improved.

  6. Advice on what undergraduate students should do:

    1. Play the opening like it's an opening. You will not checkmate in one move, nor will you establish a financially or personally successful life in your first year of college --- even by saying the magic words, "I will major in ---," or "I will go to medical school." What you can do is establish a good board position, set up things that could turn into unforeseen opportunities later, and maybe get the feel of the game a little.

    2. Do not try to time the market. People who can tell you tomorrow's values of a financial security are charlatans. So are the people who can tell you what the employment market will look like in four years --- much less twenty. Of course, the fundamentals can tell you something: Is there a business model (respectively, a career model) there? Is the company/field of study a long-term player in an active market, a fad, or a perennial loser in a market it keeps promising is right around the corner?

    3. Remember that life is big. It's an unhealthy person who has only one interest; even only one interest that they pursue seriously. I know a lawyer who is deeply involved in the world of the arts (though not professionally), a radiologist who is a major player in local politics, and a middle school math teacher who can fix anything. It's nice to love the thing you make money at. But you can and should love love --- and commit deeply to --- other things, as well.

    4. Consider the end. Never make any academic decision (like enrolling in a particular class) on less than a four year time horizon. Never make any serious life decision (like a college major) on a shorter time horizon than your life expectancy. There will be uncertainties, but make at least a tentative plan about how what you're doing will be good for you over that time span.

  7. Without myself knowing at all the answers(s) to any of Lance's questions, please let me say that they are terrific questions to ask … especially because a Chair of Engineering is legitimizing them by asking them.

    My BibTeX file provides the following advice, written in 1813, from a then-elderly Sir Joseph Banks (president of the Royal Society) to a young friend:

    Letter to William Hooker, June 19, 1813

    Let me hear from you how you feel included to prefer Ease & indulgence to Hardship and activity. I was about 23 when I began my peregrinations. You are somewhat older but you may be assured that if I had Listend to a multitude of voices that were Raised up to dissuade me from my Enterprise I should now have been a Quiet countrey Gentleman ignorant of a number of matters I am now acquainted with & probably have attained to no higher Rank in Life than that of a countrey Justice of the Peace.

    adieu my dear Sir
       Very Faithfully yours
          Jos: Banks

    Good luck to all young people, in their peregrinations!

  8. I think the current employment situation has more to do with money than technology. Many people accumulated a lot of debt, and are trying to pay down that debt quickly. Money that would be spent on investments or hiring is being spent on paying down debt or building a cash reserve. If you look at total debt, government+private sector, it's going down quite fast. There's little evidence that people are unemployed because of technology.

    Going to college seems like a no brainer to me. I suppose it could be delayed if there was some sort of short term opportunity that was simply too big to pass up, but getting a degree is important. Not only are jobs that require a post-high school education typically more interesting, pay is higher on average, and unemployment among college graduates is much lower:

    On what to study, I don't know. I've met people who avoid STEM fields because they think it is too hard or they aren't good at math. I think that's a terrible mistake, and everybody should get at least some serious ungrad-level science coursework. However, if you are passionate about something else, go for it.