The developed world’s workforce will start to decline next year, threatening future global growth ... Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics. ... For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket. ... reflects two long-established trends: lengthening lifespans and declining fertility. Yet many of the economic consequences are only now apparent. Simply put, companies are running out of workers, customers or both. In either case, economic growth suffers. As a population ages, what people buy also changes, shifting more demand toward services such as health care and away from durable goods such as cars. ... Demographic forces are assumed to be slow-moving and predictable. By historical standards, though, these aren’t ... it took 80 years for the U.S. median age to rise seven years, to 30, by 1980, and just 34 more to climb another eight, to 38. ... There is no simple answer for how business and government should cope with these changes, since each country is aging at different rates, for different reasons and with different degrees of preparedness.
- Also: Wall Street Journal - 2050: Demographic Destiny
- Also: Quartz - By 2017, one in 17 Japanese will have dementia. Here’s how the country plans to cope < 5min
- Also: Bloomberg - Jefferies: Baby Boomers Will Spend Their Retirement Money on Golf and Travel < 5min
- Repeat: Wall Street Journal - Tastes Like Chicken: How to Satisfy the World’s Surging Appetite for Meat 5-15min
Digital capabilities, adoption, and usage are evolving at a supercharged pace. While most users scramble just to keep up with the relentless rate of innovation, the sectors, companies, and individuals on the digital frontier continue to push the boundaries of technology use—and to capture disproportionate gains as a result. ... The pronounced gap between the digital “haves” and “have-mores” is a major factor shaping competition at all levels of the economy. The companies leading the charge are winning the battle for market share and profit growth; some are reshaping entire industries to their own advantage. Workers with the most sophisticated digital skills are in such high demand that they command wages far above the national average. Meanwhile, there is a growing opportunity cost for the organizations and individuals that fall behind. ... provide a comprehensive picture of where and how companies are building digital assets, expanding digital usage, and creating a more digital workforce. ... also quantifies the considerable gap between the most digitized sectors and the rest of the economy over time and finds that despite a massive rush of adoption, most sectors have barely closed that gap over the past decade. ... Digitization is changing the dynamics in many industries. New markets are proliferating, value chains are breaking up, and profit pools are shifting. Businesses that rely too heavily on a single revenue stream or on playing an intermediary role in a given market are particularly vulnerable. In some markets, there is a winner-take-all effect. For companies, this is a wake-up call to use their digital transformation to reinvent every process with a fresh focus on the customer.
How much will people work in the future? The rise of automation and, more generally, IT-driven structural change in the labour market have made policymakers and researchers worry about ‘disappearing jobs’ and a dire future for employment. In this column, we argue that to the extent productivity improvements continue, hours worked in the marketplace will indeed likely fall. However, the argument is not that jobs will disappear. ... Is the pattern representing a gradual disappearance of jobs since the early 19th century, perhaps as a result of technological change? No. The reason, we argue, is rather that technological change has raised labour productivity. People have then acted on this opportunity – they have chosen to work less hard as a result of technological change. Structural change makes some jobs disappear, but new ones emerge. Working hours are an outcome of not just demand but also of supply.
This problem has a name: the paradox of automation. It applies in a wide variety of contexts, from the operators of nuclear power stations to the crew of cruise ships, from the simple fact that we can no longer remember phone numbers because we have them all stored in our mobile phones, to the way we now struggle with mental arithmetic because we are surrounded by electronic calculators. The better the automatic systems, the more out-of-practice human operators will be, and the more extreme the situations they will have to face. ... The paradox of automation, then, has three strands to it. First, automatic systems accommodate incompetence by being easy to operate and by automatically correcting mistakes. Because of this, an inexpert operator can function for a long time before his lack of skill becomes apparent – his incompetence is a hidden weakness that can persist almost indefinitely. Second, even if operators are expert, automatic systems erode their skills by removing the need for practice. Third, automatic systems tend to fail either in unusual situations or in ways that produce unusual situations, requiring a particularly skilful response. A more capable and reliable automatic system makes the situation worse. ... The rarer the exception gets, as with fly-by-wire, the less gracefully we are likely to deal with it. We assume that the computer is always right, and when someone says the computer made a mistake, we assume they are wrong or lying. ... For all the power and the genuine usefulness of data, perhaps we have not yet acknowledged how imperfectly a tidy database maps on to a messy world. We fail to see that a computer that is a hundred times more accurate than a human, and a million times faster, will make 10,000 times as many mistakes. ... If you occasionally need human skill at short notice to navigate a hugely messy situation, it may make sense to artificially create smaller messes, just to keep people on their toes.
In theory, the redesign begins with a problem. The problem might be specific or systemic or subjective. A logo makes a company’s image feel out of date. A familiar household object has been overtaken by new technology. A service has become too confusing for new users. And so on. The world is, after all, full of problems. ... The human desire to solve problems fuels brand-new inventions too: The wheel, for example, eased conveyance significantly. But the redesign tends to address problems with, or caused by, dimensions of the human-designed world, and identifying such problems may be the designer’s most crucial skill. Redesigns fail when they address the wrong problem — or something that really wasn’t a problem in the first place. While progress may entail change, change does not necessarily guarantee progress. But a clever redesign, one that addresses the right problem in an intelligent fashion, improves the world, if just by a bit. ... the platonic ideal of the redesign: A designer sees a problem, proposes a solution, makes a difference. Such tidy narratives fuel a reigning ideology in which every object, symbol or pool of information is just another design problem awaiting some solution. The thermostat, the fire extinguisher, the toothbrush, the car dashboard — all have been redesigned, whether anybody was clamoring for their alteration or not.
But after stopping on a desolate gravel road next to a sign for a gas station, Santillan got the feeling that the voice might be steering him wrong. He’d already been driving for nearly an hour, yet the ETA on the GPS put his arrival time at around 5:20 P.M., eight hours later. He reentered his destination and got the same result. Though he sensed that something was off, he made a conscious choice to trust the machine. He had come here for an adventure, after all, and maybe it knew where he was really supposed to go. ... It’s comforting to know where you are, to see yourself distilled into a steady blue icon gliding smoothly along a screen. With a finger tap or a short request to Siri or Google Now—which, like other smartphone tools, rely heavily on data from cell towers and Wi-Fi hot spots as well as satellites—a wonderful little trail appears on your device, beckoning you to follow. ... The convenience comes at a price, however. There’s the creepy Orwellian fact of Them always knowing where We are (or We always knowing where They are). More concerning are the navigation-fail horror stories that have become legend. ... Enough people have been led astray by their GPS in Death Valley that the area’s former wilderness coordinator called the phenomenon “death by GPS.” ... By turning on a GPS every time we head somewhere new, we’re also cutting something fundamental out of the experience of traveling: the adventures and surprises that come with finding—and losing—our way. ... Individuals who frequently navigate complex environments the old-fashioned way, by identifying landmarks, literally grow their brains.
Two groups of true believers are driving changes in the developed world. The first: single-minded central bankers who spent trillions of dollars pushing government bond yields close to zero (and below). While this unprecedented monetary experiment helped owners of stocks and real estate, its regressive nature did little to satisfy the second group: voters who are disenfranchised by globalization and automation, and who are on the march. What next? The fiscal experiments now begin (again). ... why do we see 2017 as another year of modest portfolio gains despite the length of the current global expansion, one of the longest in history? As 2016 came to a close, global business surveys improved to levels consistent with 3% global GDP growth, suggesting that corporate profits will start growing at around 10% again after a weak 2016. More positive news: a rise in industrial metals prices, which is helpful in spotting turns in the business cycle ... Furthermore (and I understand that there’s plenty of disagreement on the benefits of this), many developed countries are transitioning from “monetary stimulus only” to expansionary fiscal policy as well. Political establishments are aware of mortal threats to their existence, and are looking to fiscal stimulus (or at least, less austerity) as a means of getting people back to work. The problem: given low productivity growth and low growth in labor supply, many countries are closer to full capacity than you might think. If so, too much fiscal stimulus could result in wage inflation and higher interest rates faster than you might think as well. That is certainly one of the bigger risks for the US.
In rich countries the link between learning and earning has tended to follow a simple rule: get as much formal education as you can early in life, and reap corresponding rewards for the rest of your career. The literature suggests that each additional year of schooling is associated with an 8-13% rise in hourly earnings. ... Many believe that technological change only strengthens the case for more formal education. Jobs made up of routine tasks that are easy to automate or offshore have been in decline. The usual flipside of that observation is that the number of jobs requiring greater cognitive skill has been growing. ... The reality seems to be more complex. The returns to education, even for the high-skilled, have become less clear-cut. Between 1982 and 2001 the average wages earned by American workers with a bachelor’s degree rose by 31%, whereas those of high-school graduates did not budge, according to the New York Federal Reserve. But in the following 12 years the wages of college graduates fell by more than those of their less educated peers. Meanwhile, tuition costs at universities have been rising. ... automation tends to affect tasks within an occupation rather than wiping out jobs in their entirety. Partial automation can actually increase demand by reducing costs
- Also: The Economist - Cognition switch: What employers can do to encourage their workers to retrain < 5min
- Also: The Economist - Old dogs, new tricks: How older employees perform in the workplace < 5min
- Also: The Economist - The return of the MOOC: Established education providers v new contenders < 5min
- Also: The Economist - Pathway dependency: Turning qualifications into jobs < 5min
- Also: The Economist - The elephant in the truck: Retraining low-skilled workers < 5min
- Also: The Economist - Manufacturing industry: Politicians cannot bring back old-fashioned factory jobs 5-15min
Although robotic ships of this sort are some ways off in the future, it’s not a question of if they will happen but when. My colleagues and I at Rolls-Royce anticipate that the first commercial vessel to navigate entirely by itself could be a harbor tug or a ferry designed to carry cars the short distance across the mouth of a river or a fjord and that it or similar ships will be in commercial operation within the next few years. And we expect fully autonomous oceangoing cargo ships to be routinely plying the world’s seas in 10 or 15 years’ time. ... Remotely controlled ships, piloted by people on shore, and autonomous ships, which can take actions for themselves, are the latest beneficiaries of increasing digital connectivity and intelligence. These developments in electronic sensors, telecommunications, and computing have sparked interest in a range of autonomous vehicles including cars, planes, helicopters, trains, and now ships. ... That people should be seriously interested in robotic ships is easy enough to explain: Such ships are expected to be safer, more efficient, and cheaper to run. According to a report published by the Munich-based insurance company Allianz in 2012, between 75 and 96 percent of marine accidents are a result of human error, often a result of fatigue.
To the uninitiated, the figures are nothing if not staggering: 155 million Americans play video games, more than the number who voted in November’s presidential election. And they play them a lot: According to a variety of recent studies, more than 40 percent of Americans play at least three hours a week, 34 million play on average 22 hours each week, 5 million hit 40 hours, and the average young American will now spend as many hours (roughly 10,000) playing by the time he or she turns 21 as that person spent in middle- and high-school classrooms combined. Which means that a niche activity confined a few decades ago to preadolescents and adolescents has become, increasingly, a cultural juggernaut for all races, genders, and ages. How had video games, over that time, ascended within American and world culture to a scale rivaling sports, film, and television? Like those other entertainments, video games offered an escape, of course. But what kind? ... Technology, through automation, had reduced the employment rate of these men by reducing demand for what Hurst referred to as “lower-skilled” labor. He proposed that by creating more vivid and engrossing gaming experiences, technology also increased the subjective value of leisure relative to labor. ... As with all sports, digital or analog, there are ground rules that determine success (rules that, unlike those in society, are clear to all). The purpose of a game, within it, unlike in society, is directly recognized and never discounted.
Reversing Paralysis: Scientists are making remarkable progress at using brain implants to restore the freedom of movement that spinal cord injuries take away.
Self-Driving Trucks: Tractor-trailers without a human at the wheel will soon barrel onto highways near you. What will this mean for the nation’s 1.7 million truck drivers?
Paying with Your Face: Face-detecting systems in China now authorize payments, provide access to facilities, and track down criminals. Will other countries follow?
Practical Quantum Computers: Advances at Google, Intel, and several research groups indicate that computers with previously unimaginable power are finally within reach.
The 360-Degree Selfie: Inexpensive cameras that make spherical images are opening a new era in photography and changing the way people share stories.
Hot Solar Cells: By converting heat to focused beams of light, a new solar device could create cheap and continuous power.
Gene Therapy 2.0: Scientists have solved fundamental problems that were holding back cures for rare hereditary disorders. Next we’ll see if the same approach can take on cancer, heart disease, and other common illnesses.
The Cell Atlas: Biology’s next mega-project will find out what we’re really made of.
Botnets of Things: The relentless push to add connectivity to home gadgets is creating dangerous side effects that figure to get even worse.
Reinforcement Learning: By experimenting, computers are figuring out how to do things that no programmer could teach them.
During the 2003–15 commodity supercycle, spending on resources including oil, natural gas, thermal coal, iron ore, and copper rose above 6 percent of global GDP for only the second time in a century before abruptly reversing course. Less noticed than these price gyrations have been fundamental changes in supply and demand for resources brought about by expected macroeconomic trends and less predictable technological innovation. Our analysis shows that these developments will have major effects on resource production and consumption over the next two decades, potentially delivering significant benefits to the global economy and bringing change to the resource sector.
-Rapid advances in automation technologies such as artificial intelligence, robotics, analytics, and the Internet of Things are beginning to transform the way resources are produced and consumed.
-Scenarios we modeled show that adoption of these technologies could unlock cost savings of between $900 billion and $1.6 trillion in 2035, equivalent to the GDP of Indonesia or, at the upper end, Canada. Total primary energy demand growth will slow or peak by 2035, despite growing GDP, according to our analysis.
-The price correlation that was evident during the supercycle is unraveling, and a divergence in prospects between growth commodities and declining ones may become more significant.
-Policy makers could capture the productivity benefits of this resource revolution by embracing technological change and allowing a nation’s energy mix to shift freely, even as they address the disruptive effects of the transition on employment and demand.
-For resource companies, particularly incumbents, navigating a future with more uncertainty and fewer sources of growth will require a focus on agility.
In the fancier precincts of the food-service world, where watching a barista spend four minutes prepping a pour-over coffee is a customer’s idea of a good time, robots might not seem like the future of food culture. But spend some time at the restaurants where the majority of Americans eat every day, and you’ll catch a distinct whiff of automation in the air. ... Given job creators’ distaste for organic employees, it’s easy to see how automation might play out in Quick-Service Restaurants, or QSRs—the industry term for both fast-food operations like Hardee’s and slightly more upscale “fast casual” restaurants, like Chipotle. You already have to stand in line, order your own food, and then (in most cases) pick your order up at the counter when it’s ready. Pop a couple kiosks up front, maybe let people order on their phones, and bingo, you’ve automated away all the cashiers. ... More than 14 million people—almost 10 percent of the American workforce—work in restaurants, and almost 2 million of those work for casual-dining chains. ... Besides bumping check averages, the tablets can generate revenue with game fees and display ads, which the restaurants split with the tablet companies. And once the platform is in place, it becomes a powerful tool for data collection.
Striving for perfection in mind, body and spirit is a Korean way of life, and the cult of endless self-improvement begins as early as the hagwons, the cram schools that keep the nation’s children miserable and sleep-deprived, and sends a sizable portion of the population under the plastic surgeon’s knife. ... I have come to South Korea to find out just how close humanity is to transforming everyday life by relying on artificial intelligence and the robots that increasingly possess it, and by insinuating smart technology into every aspect of life, bit by bit. Fifty years ago, the country was among the poorest on earth, devastated after a war with North Korea. Today South Korea feels like an outpost from the future, while its conjoined twin remains trapped inside a funhouse mirror, unable to function as a modern society, pouring everything it has into missile tests and bellicose foreign policy. Just 35 miles south of the fragile DMZ, you’ll find bins that ask you (very politely) to fill them with trash, and automated smart apartments that anticipate your every need. ... The automation of society seems to feed directly into the longing for perfection; a machine will simply do things better and more efficiently, whether scanning your license plate or annihilating you at a Go tournament. ... the mood is not one of luxury and happy success but of exhaustion and insecurity.