on November 13th, 2011

Recently, there have been some rather twitchy concerns that the current high levels of unemployment in many countries such as the USA and Europe are here to stay. And there has been much discussion that the high levels of automation of tasks (from IT to industrial automation) are the main cause of the collapse in the need for as many workers as in the past.

The Luddites
This is often referred to as the Luddite Fallacy, where improving productivity would mean that we are all out of work today. Henry Ford supposedly disproved this in the 1920s, because he produced cars (the Model T Ford) with dramatically improved productivity and lower prices and paid his staff double the going rate. As a result he attracted the best toolmakers to Ford and improved his cars further. So in this case - great improvements in productivity, based on automation and innovation, resulted in falling prices of goods; resulting in increased demand and thus more workers to be hired.

The problem
But here is the problem. It has been observed that these massive increases in productivity (due to increasing levels of automation) have actually had no impact on the high levels of unemployment. This could be due to the fact that the massive jumps in automation, industrial networks, artificial intelligence are now making many jobs obsolete – far more than are being created. Forever. Routine work is not only being automated, but highly creative tasks as well. From Radiologists who could earn $300k p.a. reviewing cancer tumour slides and X-ray pictures; are now finding automated pattern recognition software can do the work better to workers who are finding that automated factories are doing much of the thinking and manual work. Both on the shopfloor and at the higher managerial levels.

My thought however is that we need to learn to work with machines and be innovative and creative about what we are doing. For example, Amazon and eBay have created employment for over 600,000 people dreaming up products for a massive consumer database. And it is probably more likely that these jobs in the USA and Europe that have disappeared have probably gone off to China and India where wages are lower.

So where are the great opportunities?
One of the challenges with today’s world is that most people do not have technical capabilities to take on the new (mainly technical) jobs that are appearing. And the major proportion of the 7 billion people on the earth do not have access to the great things we have and who want them now. Surely an enormous opportunity (truly an ocean of opportunity) for us engineering professionals to provide these goods and services?

Think of some of the massive gaps that need to be solved in Asia and Africa; especially:

  • Clean water
  • Electricity
  • Telephones and the Internet
  • Health care
  • Good food
  • Personal entertainment and hobbies
  • Transport
  • Education
  • Banking

This of course means greater globalisation and the need to have superb engineering skills (and some entrepreneurial abilities) but we have the capability of attaining them. Obviously there are challenges in that many of the simpler jobs have been outsourced to the third world at a lower rate.  But surely in raising the productivity of the third world we are just demonstrating a greater global application of making a Model T Ford. Producing goods at a lower cost and higher quality. Anyone who wants to earn more or have more leisure needs to learn to think and work smarter. And education can help us here.

Education is a great opportunity
Other challenges which we have to grasp are ensuring colleges and universities produce graduates who have real leading edge skills aligned with industry. Not mumbo jumbo theoretical concepts of no use to man or beast. Further to this education, we need to encourage everyone to think like an entrepreneur and to harness those creative genes which we all have, so as to identify new opportunities.

Our Standards of Living (and work) can go up
With the lowering of costs for provision of services and goods; it means that our standards of living go up as well. This means more time for leisure and with our kids or on holidays etc.  And when we work; we should have a higher quality work environment and a more interesting job.  Inevitably, I don’t think there is any end in sight to what people need or want. From material to spiritual things.

In tackling this fast changing world with verve and vigour, remember the words of Anais Nin: ‘Life shrinks or expands in proportion to one’s courage’.

Yours in engineering learning


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