THE FUTURE OF WORK

This piece begins anchored in the current domestic debate about the Budget, but that's not what it's about.

This man doesn't even know what's coming

courtesy SMH

It's about this.

outback australia image

The new wave of computerisation of work will change everything,

As I wrote in the Canberra Times, not even journos are safe . . .

We need a budget to address the future . . .

The really great thing about the budget is that now you can legitimately blow $20,000 on a cappuccino machine, huge plasma TV and reclining couch and feel good about it. To avoid the GFC Labor handed out measly cheques that were worth barely a thousand dollars each. Now Joe Hockey’s showing them how to stimulate the economy properly. His bargain bonus giveaway – sorry, business related purchase deduction – has all the finesse of a closing down sale. Everything , indeed, must go!

Labor spent the surplus it inherited; last week Hockey blew the children’s inheritance as well.

Newspapers carried thick budget wraparounds emblazoned, “BUDGET - WHAT YOU NEED TO KNOW”. The truth is, we were lying. We marched in lock-step with the politicians by relentlessly focussing on the present rather than the future; ‘what’s going on now’ instead of ‘what’s about to happen’. This is revealed by the time-line. The focus is very firmly fixed on the next election. Anything beyond that might as well be in the never-never.

There's nothing (apart from a couple of laughingly far-fetched predictions that the world economy is poised to recover) venturing anywhere beyond the current political cycle. This is what the huge cache of documents is increasingly about: a mighty effort pretending the government is engaged with tomorrow when it’s really only interested in your vote, today.

The sheer purported precision of the documents reveals their limited inadequacy. Instead of attempting to discern the underlying tune to which the economy is dancing, the numbers exclusively focus on the cacophony of noise that surrounds us and refuses to draw any deductions about the future. The danger is the longer we remain mired in the present, searching for answers for today’s issues, the more severe the mess will be tomorrow. The government’s decided, quite wilfully, that nothing will stand in the way of re-election. Hockey’s ignoring the future, acting like a little boy who’s stuck his fingers in his ears to whistle, la-la-la. How do we know? Look at what's already happening around us.

The economic problem we’re facing today is just the beginning of tomorrow's great disruption.

Michael Osborne, an Aussie researcher at Oxford, gives a fascinating talk that begins with the manufacturing revolution that displaced the artisans and skilled craft-workers to boost industry in the cities from the 18th century onwards. This created the modern industrial world we’re so familiar with. Today everyone knows it’s computers that are changing everything. But Osborne designs intelligent algorithms (and as dedicated readers of this column are well aware I don’t have a clue what this means, but it sounds clever so I thought I’d better put it in) and he’s used these to dissect the detail of what this revolution means in practice. It seems nothing turns out quite the way you’d expect (unless, of course, you happen to design intelligent algorithms).

Everyone, for example, loves the idea of Google’s self-driving cars. Wouldn’t it be good to be able to pop Samantha off to netball without leaving the bar, sorry, coffee shop? Eventually that may happen because Google executives will be cashed up enough to pay for their cars. But what about the rest of us?

Osborne gives the example of a mine-worker, one of those people who drives the behemoths that shift ore from the tunnel shaft to the conveyer belt to load the ships. Currently these fly-in, fly-out workers earn $180,000 plus accommodation plus transport plus Qantas club membership plus, and this is the real kicker, the ability to claim a hi-vis vest as a tax deduction. Replacing such workers with computer programs is a no brainer, even for Gina Rinehart. These are the first jobs that will go (replaced, presumably, by Google truck), but there are many more, at either of the spectrum.

Up until now, technology has more or less exclusively replaced routine work. Go to a supermarket, scan your items, and Coles or Woolies have successfully outsourced the labour cost to you, the consumer. The new trend Osborne’s detecting is for work that’s considered non-routine - such as writing brilliant newspaper columns (gulp) - to be replaced by technology as well. A few, highly specialised jobs that require dexterity (such as brain surgery) will continue to be preformed by people for the foreseeable future. Otherwise the only limitation to replacing people with machines will be the cost. In many cases, such as work of low value drudgery, such as cleaning, it will continue to be cheaper to get people to do the task. So dentists and gym instructors will keep their jobs; but there’s the possibility pilots and sales staff will be replaced.

So think of what this means for finance, one of the industries that’s supposed to anchor our future. Forget it. A computer can process options pricing discrepancies far more effectively and efficiently than a human. Such jobs will just disappear. Think of tax accountants and superannuation advice, another enormous industry we’ve always assumed will be around. They don’t do anything a computer program can’t do. There are already programs around to compose news stories. I suspect the only reason we still have journalists is that we’re so cheap to hire it’s not worthwhile replacing us. Yet.

The message is that although we may think we’ve already been through the big disruption from computerisation, we haven’t. The real challenges are yet to come. What will happen to our society when all these jobs simply vanish? Unemployment will surge. The current gap between those with money and those without will become an unbridgeable chasm. Not everyone can become either a surgeon or a fashion designer, two of the jobs Osborne says will be resistant to computerisation.

Last weeks budget assumed confidently that the economy will recover. It won’t. It will change. Dramatically.