With digitization and automation jobs will disappear, but we’ll continue to work anyway. That is what several experts I have been talking to believe. They also think that distribution of wealth in society could become the biggest challenge ahead.
None of the experts I have been talking to about jobs and the future is opposed to the picture that a large part of today’s jobs will be automated.
“Everyone understands that we are replacing people with robots in factories that are being automated. What is still not widely recognized is that this also applies to white collar jobs now — those jobs that absorbed much labor when we started the transition to manufacturing in factories, and also what made this transition relatively painless. The question is whether there is a third sector that can absorb those who are losing white collar jobs,” says Gunnar Karlsson, professor of telecom traffic systems at the Royal Institute of Technology in Stockholm, Sweden.
So the crucial question is whether new jobs will be created when old ones disappear. Many hope they will be created in innovative star-ups, but Swedish technology weekly Ny Teknik concluded last fall that 25 of Sweden’s most acclaimed start-up companies together had created 3,700 jobs, while 5,000 jobs had disappeared in five years, only in the Volvo Group.
Another hope, however, lies in increased demand for local services as a result of higher income for those who still have jobs, and according to a report by the Foundation for Strategic Research (Stiftelsen för strategisk forskning) this seems partly to be true (see below).
Anna Felländer, chief economist at Swedbank, also sees a trend moving in that direction, where the most important thing, according to her, will be to make it easier for innovative companies and for the self-employed.
“40 percent of the US workforce is self-employed and in five years it will be 50 percent. There is an individualization of the economy going on, and it happens quickly in Sweden,” she says.
Robin Teigland, a researcher at the Stockholm School of Economics, who has written a report on the new ‘sharing economy’ with Anna Felländer, believes that our revenues will come from many sources, and even from machines working for us.
“They can make money for you without you having to do anything except maintaining the machine or the resource,” she says.
Per Johansson, a former researcher in human ecology, and now part of the think tank Infontology, believes in a similar trend but he wants to make a difference between jobs and work. He says that jobs are functions in systems with roots in bureaucracies and military chains of command — tasks with some kind of mechanical character. Work is instead what we do in life — anything that requires effort.
“We need to shift focus towards other human urgencies and tasks — areas in which I think there will never be any shortage of work. It’s a kind of of change of fantasy we have to undergo,” he says.
How difficult it will be depends on how indoctrinated we are in the old beliefs, according to Johansson.
Roland Paulsen, PhD in sociology at Lund’s University, goes further.
“I see work as the biggest environmental problem we have. Nothing consumes so much of the Earth’s resources,” he says, referring to the objective of high employment rates, despite automation effects, which leads to unnecessary production and consumption.
No matter which picture of the future of jobs you choose, most believe that the distribution of wealth will be a major challenge. One reason is the risk of accumulation of profits to giant corporations with high automation rate. Another is the risk of very large income gaps. A third is that the self-employed may be exposed to fierce price pressure through global digitization.
“We will need to improve individuals’ negotiating position through regulation,” says Robin Teigland.
One solution being discussed is unconditional basic income — a kind of base salary to everyone, sufficient for covering basic costs in life, and replacing all other social programs in society. Many are skeptical, including former Swedish Prime Minister Fredrik Reinfeldt, even though he early on recognized the risk that jobs can be automated.
“I see it as a left wing alternative that has occurred in the debate (…) where we in fact establish a society where a large percentage of the population will never get any job because they will live on the citizen salary,” he says.
But proponents see great opportunities.
“It is important to focus on what a citizen salary would make possible if people did not have to worry about providing daily food and housing — a freedom from adapting to other people’s agendas, which the old way of governance and managing means, and then new businesses can emerge. In a best case scenario this leads to an adaptability which I think is key to solve these problems,” says Per Johansson.
Roland Paulsen notes that a citizen salary may have surprising effects.
“You would have to raise the salary of crappy jobs that no one wants to do if they don’t have to. An upside-down world where the least attractive jobs would become the best paid. But I still think that a basic income can lead to the development of new ethics and a new way of living together,” says Roland Paulsen.
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Machines are taking over the jobs
- The report “The Future of Employment” from Oxford University (2013), by Carl Benedikt Frey et al, states that 47 percent of the jobs in the United States are at high risk to be automated within a few decades. The report also claims that the entry of machines will occur in two waves. First low-wage jobs with low educational requirements will be hit, for example in transportation, logistics, production and administration. Then there will be a pause while technology is evolving to embrace also creative and social abilities, and at that point also well paid jobs with high educational requirements will be affected.
- In the report “Every second job will be automated within 20 years” from the Foundation for Strategic Research (Stiftelsen för strategisk forskning) — a Swedish adaptation of the Oxford report — the author argues that 53 percent of Swedish jobs run the same risk.
- Gartner expects that one in three jobs will be done by software, robots or smart machines 2025.
- Pew Research Center’s report “AI, Robotics, and the Future of Jobs” is based on answers from 1896 technology experts and analysts. 48 percent of them thought that technology will displace more jobs than it creates, while 52 percent believed the opposite.
- The report “New jobs in the automation era” from the Foundation for Strategic Research shows that 450 000 jobs were lost in Sweden through automation between 2006 and 2011. New jobs and increased demand for local services due to higher wages for those who still had their jobs, replaced three quarters of the lost jobs. Reforms in the labor market contributed to a total rise in employment.
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This can become Sweden’s role
What can be the role of Sweden for handling the transition when jobs are being automated?
Per Johansson: “We may be good at finding a new imaginative and realistic optimism. You have to observe all sorts of negative things and limitations clearly, but if you create a confidence in the future that is effective enough, then you have the antidote you need against destructive tendencies that strive back to the Middle Ages.”
Roland Paulsen: “To be a leading country. Economic globalization is not the only one, there is a political / ideological globalization too. That the Washington Post reported on the experiment in Gothenburg (six-hour work day), says something about when a country is at the forefront, it puts pressure on other countries. And Sweden has a long tradition of being a political frontrunner.”
Robin Teigland: “Sweden is at the forefront in sharing economy, in robotising of jobs, and in IT and Internet penetration. Many people look at us and see how we do. We can sell our services and our knowledge. All countries are facing this and people come to us. Sweden can also be a test market, where it is easier to push change than in the US for example.”
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A part of this report was first published in the Swedish magazine Digital Teknik.
(This post was originally published on Animpossibleinvention.com).
I’m happy to announce that the Italian edition of my book An Impossible Invention — Un’invenzione impossible — is finally out. I’m particularly satisfied since the story is closely related to Italy to which I have personal connections, my wife being Italian.
A great thanks to Alex Passi who has made the translation, and who preferred not to be compensated but instead asked me to donate part of the sales revenue to scientific research, which I will do. What research that will receive the donation is still to be defined.
Read more here.
(This post was originally published on Animpossibleinvention.com).
On August 25, Andrea Rossi was granted a patent on his LENR based heating device the E-Cat. The patent, which has the filing date March 14, 2012, can be downloaded here: US9115913B1
As far as I understand, the patent describes the so-called low temperature E-Cat that Rossi showed in semi-public demonstrations at several occasions in 2011, and which is also used in an ongoing 350-day trial of a 1 MW plant, but since it describes core parts of the technology it is probably also valid at a certain extent also for more recent E-Cat models with higher operating temperature.
Stockholm is singled out as the world’s hottest spot for startup companies in the financial and banking sector–Fintech. Now experts are warning big banks for not being sufficiently innovative.
“Sure, certain banks are technology mature, but I do not know if that should be called innovation. What has your bank done for you in recent years that is innovative?”
Erik Wetter, director of the incubator Business Lab at Stockholm School of Economics, where the successful Swedish payment startup Klarna started, is asking the rhetorical question.
He states that Stockholm has become perhaps the world’s hottest spot for fintech–young tech companies in the area of banking and finance. With innovative services and smart technology, they see opportunities to challenge traditional banks.
“One of the largest US banks can make four releases a year in their system that handles a trillion dollars per year. We make four releases per day. It says something about the speed with which we are testing products and how users feel, think and behave–in a completely different manner than the banks can do, says Erik Engellau-Nilsson, marketing manager for Klarna.
Motivation in fintech startups should be increased by the fact that banks belong to an unusually profitable industry. Or, as former Swedish Prime Minister Fredrik Reinfeldt put it at the seminar Bankdagen 2015 in Stockholm recently:
”The banks make fantastic profits and it is only to be congratulated. But if you’re making big profits, there’s a risk of being challenged. Such large profit margins are difficult to defend over time.”
Erik Wetter thinks that, as in other oligopolistic industries such as aviation, it will be difficult for incumbent banks to meet the challenge from startups. He is backed by Robin Teigland, researcher at the Stockholm School of Economics, who believes that banks will be consolidated or may well fail in the long term.
The question is what banks are doing, and what they should be doing.
Erik Wetter notes that IT giants such as Google and Apple are basing their innovation on acquisition of innovative companies, while banks do not seem to take that opportunity. As an example, the new Swedish venture capital company NFT Ventures, focusing on Fintech, does not have a bank as lead investor, but the Swedish media company Bonnier. And the major Swedish bank SEB’s most successful venture capital investment is said to be the musical Mamma Mia, but they did not invest in the successful fintech startups Klarna or Izettle.
”That is symptomatic,” says Erik Wetter.
Robin Teigland, however, does not think that banks should buy innovation.
”It’s an old mindset that you have to own. It is better to collaborate,” she says.
She thinks that banks should experiment more, internally and externally. For example she suggests internal projects with crowdfunding, where employees get a certain amount of money to invest in various projects.
”How many bank employees have tried crowdfunding, or peer-to-peer lending? And how many have tried Bitcoin? If you do not understand how things work, how will you be able to decide?” she asks.
Both the banks themselves and startup companies believe that user experience has become particularly important. The Finnish consulting firm Tieto that organized the Bankdagen 2015, notes in a report that seven out of ten banks see digital customer experience as the key to efficient operations. Yet only twelve percent of the companies are using data from different sources to individualize services.
”Consumers are often one step ahead of the banks on this. If you need a loan, it may be perceived as less risky and easier to go to a peer-to-peer service, and you do not have to worry about credit approval. And those who need funding for an idea can go to Kickstarter instead of a bank branch,” Katarina Segerståhl, director of strategic design at Tieto, notes.
“This means that banks need to approach consumers even more and create new services along with them,” she adds.
In the end, the question of understanding the customers might be about culture. That is what Elísabet Grétarsdóttir believes, who a few years ago was recruited from the gaming industry to become marketing manager for the Icelandic Arion Bank, which was formed from the collapse of Kaupthing Bank.
She points out that banking culture has been shaped over hundreds of years, and that it is hierarchical and risk-averse–and rightly so since financial systems are an important backbone of society.
But today this culture is blocking innovation, Elísabet Grétarsdóttir says, and she believes that many in the banking industry do not see this.
“They live and dream this culture, and when something in your environment is a part of you, you stop to see it,” she says.
As an example, she takes the dress code in the banking world.
“Dress codes were important 50 or 60 years ago, when people thought that suits inspired confidence and trust. Today, consumers’ values have changed and they don’t see trust in an outfit. Instead, they build trust when they feel that someone really cares about their well-being. That’s how brands need to operate, and this is where financial institutions have a hard time connecting with consumers. They have different value systems, says Elisabet Grétarsdóttir, who just left the Arion Bank for a job at the EA owned Swedish gaming company Dice.
Maybe her new career indicates where the knowledge that the banks need is to be found today.
”We do not know where banking services will be offered in ten years from now–if it is from an organization, a local player or perhaps in a global online game, says Robin Teigland.
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Here’s what fintech companies focus on
1. Information–better information through efficient apps and data analysis.
Example: Comparisons, overviews, negotiation services and more.
2. Capital Sources–access to new sources of capital.
Examples: Crowdfunding–both as donation and investment to equity. Peer-to-peer lending–services that facilitate loans between people and/or organisations in different target groups.
3. Transactions–services that create new ways to manage transactions.
Example: New payment services, billing services, use of mobile phones as payment terminals.
4. Global Services–services that offer the same simplicity and security internationally as many users expect only in their own country.
Example: Private sales, return of goods, delivery guarantee, credit risk.
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16 Swedish fintech startups
Klarna – payment services for e-commerce.
Mondido – payment services for e-commerce.
Izettle – turns mobiles and tablets into a payment card terminal and cash register.
Trustly – allows e-stores in several countries to offer direct payment from banks.
Sitoo – common cash register and inventory system in the cloud for e-store and physical store.
Betalo – pay your bills with payment cards.
Toborrow – digital marketplace for business loans (peer-to-peer loans).
Kortio – service for the comparison of payment cards.
Funded By Me – crowdfunding, both as donation and investment.
Lånbyte – negotiating mortgage rate for consumers.
Lendo – find the loan with the lowest interest rate.
Bolånegruppen – negotiates mortgages for groups of people.
Tessin – crowdfunding for properties.
Leasify – optimization of leases and contracts.
Share Travel – allows users to share information on how they invest.
Tink – giving consumers overview of their private economy.
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This post was originally published in Digital Teknik, in Swedish.
This post was originally published on Animpossibleinvention.com
Apart from the well-known companies with LENR based technology, such as Andrea Rossi’s partner company Industrial Heat, and Brillouin Energy, founded by Robert Godes, there are a series of small rather unknown companies that have popped out in the last few years.
One of them is Swedish Neofire that surfaced in February 2015. It turns out to be founded in 2010 and run by one single person – Peter Björkbom – whom I came to talk with at ICCF-19 in Padua last week.
Read more on Animpossibleinvention.com
This post was originally published on Animpossibleinvention.com.
The first is the ongoing trial by Rossi’s and his US partner Industrial Heat of a commercially implemented 1 MW thermal power plant based on the E-Cat. From credible sources I get confirmation of what Rossi states — that the plant is running very well — which means that we should expect important results presented at the end of the 400 day trial, backed up by a customer who certifies the useful power output and the measured electrical input from the grid. Such results will be difficult to challenge.
Read more on Animpossibleinvention.com.
The hypothesis seems accurate and also reasonable, given that the world is getting increasingly connected in several ways, both with regard to communications, transportation and commerce, but it’s actually not correct.