Droning On: Is This Tech Revolution Different From All Others?

Get that degree in black-smithing

Get that degree in black-smithing

Government officials in the United Arab Emirates (UAE) announced that within a year, drones will be enlisted by government to provide routine services, such as license renewals and delivery of official documents and packages to citizens.  In the U.S., Amazon is experimenting with drones for delivery of retail goods, but has said it would take at least four to five years to perfect the technology and process. 

This story did not receive much attention.  I came across it in a Reuters online publication.  Here is the story:  It has numerous implications and raises many questions.   Let me list just a few (some real, others facetious).  I elaborate only on the last set, dealing with job loss. Some implications:

1) Places around the world condescendingly regarded as “third world” or “developing” not very long ago, are beating us to the punch now all the time with applications of complex technologies in daily and industrial life.  2) The opportunities for more government spying and voyeuristic photography using drones in hard to reach places seem almost endless. 3) And, what about the risk of drones becoming targets for recreational shooting, or disrupting roof top pigeon racing?   

The most serious and long term implications of popularized drones concerns how many human jobs will be eliminated in government, retailing, and delivery services?  Will those job losses be offset by ones needed to manufacture, maintain, and operate the drones?  Some new drone manufacturing jobs will surely be created, but where will they be located?  In San Diego or Phnom Pehn?

Since the Industrial Revolution, pundits have been wringing hands about machines replacing humans, permanent loss of jobs, and idleness in epidemic proportions, as we continuously innovate.  So far they have been wrong.  Thus far – at least up through the late 20th century —  industrial economies have adapted to technological change and produced new jobs, to more than offset the old ones lost to innovation.  Not that there weren’t big time losers and hardship with each change and adjustment.  And governments have interceded to make life a little less harsh for the losers, 

My weasel words (“at least through the late 20th century”) are critical.  The feeling creeps-in that “this time it is different.”  Check out the article on this notion in a recent MIT Technology Review.. The reason for pessimism is that workers (as now well documented) have fared poorly over the past forty years.  And, the past two or three “recoveries” from recession have been distinguished by slow job growth.  The expression “jobless recovery” has now been around since at least 2000. 

The possible reasons for this have been subject to endless debate. That is good, because for years the problem was hardly recognized.  But consensus about the causes, much less what to do about it (if anything), is still lacking, which is very frustrating. In the mean time, numerous Nobel Prizes in economics have been awarded for solving (clarifying) issues of seemingly much less importance.

All of that is easy for me to say.  I don’t have the answers either.  The one observation I’d like to add, and it’s not a really new thought, but one that doesn’t get enough attention, concerns the volume and velocity of innovation. 

I of course agree that light bulbs replacing candles was a good thing for the greatest number, even though it hurt a few people.   But, the volume and rapidity of such change appears now to be so great (and unprecedented), that economies, societies, and individuals are not adjusting; at least not very fast. And just when we think we’ve adjusted, Microsoft issues another upgrade to their operating system.  What we go through trying to avoid buying a new computer with Windows 8!!!

We will always have a minimum of about 4 to 5 percent unemployment. There is always some mismatch between workers and jobs.  It takes time for employers and the right workers to find each other, as technology and other factors change the nature of work.  Economists call this unemployment floor “frictional unemployment. ”But if the high volume and sheer speed of change is now a permanent feature of economic life, what we used to call “frictional unemployment” has a whole new look, and dimension.

How many students do you know who enrolled in a training program to prepare for a “high demand job,” only to find the occupation had disappeared before the ink was dry on the degree?  On the bright side: The hard copy degree can be delivered by a drone built in Phnom Penh; and the student loan invoice can be sent real fast by piggy-backing on laser beams used by Merrill-Lynch for high speed, algorithmic trading.   




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