Creative Destruction

[overthere]

That is what has been happening since the industrial revolution, however private ownership ensures that the benefits of automation go to those who own the technology.

Unfortunately that statement fails to address a couple of items.

The creation of the huge and welathy middle class in industrialized countries is one.

Far longer abd healthier human life spans is another benefit it ignores.

[Michael Hardner]

Unfortunately that statement fails to address a couple of items.

The creation of the huge and welathy middle class in industrialized countries is one.

Far longer abd healthier human life spans is another benefit it ignores.

Very true - the wording on that statement was bad, it should have said "most benefits" or perhaps some less quantifiable language.

[Bonam]

Very true - the wording on that statement was bad, it should have said "most benefits" or perhaps some less quantifiable language.

I don't think that's necessarily true either. Certainly much of the profit goes to people who "own the technology", but there are many benefits besides profit. In the advanced society that we all live in as a result, whether one is an average citizen or a wealthy investor, life today is far far more comfortable, safer, and longer than it was in the past. Besides those obvious metrics, the average person today has far more choice as to what they will do in life, knows far more about the world, endures far less drudgery, communicates with people around the world, etc. The benefits of advancing technology affect everyone's lives.

[Michael Hardner]

life today is far far more comfortable, safer, and longer than it was in the past.

Yes, but if we're talking about such things they're difficult to quantify... and you're also in the domain of general social change that's difficult to pin down as to causes.

Besides those obvious metrics, the average person today has far more choice as to what they will do in life, knows far more about the world, endures far less drudgery, communicates with people around the world, etc. The benefits of advancing technology affect everyone's lives.

I absolutely believe this too.

[GostHacked]

So what are people going to do then?

People will welcome the technocratic robot overlords. They won't have a choice. Have your hand with your RFID chip ready to swipe for daily food rations.

http://knightscope.com/technology/

Edited February 5, 2014 by GostHacked

[WestCoastRunner]

No, that trend is stopping now.

They are disappearing to silicon valley now.

Tech startup Hootsuite wants to hire 100 software engineers this year and it says it will be all but impossible to find them in Canada.

The Vancouver company, like other Canadian tech companies, is competing with San Francisco's Silicon Valley which regularly draws software engineers to work at heavyweights Google, Twitter, Facebook, Apple and LinkedIn, and startup firms.

Hootsuite will likely have to recruit internationally to add to the ranks of its 80 software engineers, said Ambrosia Humphrey, the company's head of human resources.

Here is the original article: http://www.cbc.ca/news/canada/british-columbia/vancouver-s-hootsuite-competing-for-silicon-valley-talent-1.2529631

[Michael Hardner]

http://www.forbes.com/sites/ciocentral/2012/12/28/the-death-of-outsourcing-and-other-it-management-trends/

Here is a Forbes article indicating why offshoring is dead for IT

[WestCoastRunner]

http://www.forbes.com/sites/ciocentral/2012/12/28/the-death-of-outsourcing-and-other-it-management-trends/

Here is a Forbes article indicating why offshoring is dead for IT

You have no argument from me there.

[bush_cheney2004]

Here is a Forbes article indicating why offshoring is dead for IT

"Offshoring" is certainly not "dead" for IT, but the value proposition is no longer what it used to be. The factors mentioned in the Forbe's article are also impacting domestic workers in the U.S. Increasing productivity through automation is continuing a trend started many years ago. I have seen it in my own industry for customer service call centers (IVR telephony), software development (lightweight agile processes and automated testing), open source tools, automated business analytics, migration to Google desktop applications (sorry Microsoft), and instant messaging (over e-mail).

Employees and shops who cannot or will not adapt will find themselves losing out to competitive offshore and near-shore resources. Consultancies like IBM, Tata, and Accenture are already well positioned to take advantage of IT opportunities domestically with imported and offshore workers.

[Michael Hardner]

"Offshoring" is certainly not "dead" for IT, but the value proposition is no longer what it used to be.

I think what Forbes and Gartner mean is that the tide is now going to start turning back - we are close to an even market. I asked a friend of mine in 2005 how much his top programmers were making, and he said they made $60K... in Bangalore. And this was eight years ago.

The factors mentioned in the Forbe's article are also impacting domestic workers in the U.S. Increasing productivity through automation is continuing a trend started many years ago. I have seen it in my own industry for customer service call centers (IVR telephony), software development (lightweight agile processes and automated testing), open source tools, automated business analytics, migration to Google desktop applications (sorry Microsoft), and instant messaging (over e-mail).

Yes, and it stands to reason that since these were the first jobs to go offshore, they will be the first ones to come back too.

Employees and shops who cannot or will not adapt will find themselves losing out to competitive offshore and near-shore resources. Consultancies like IBM, Tata, and Accenture are already well positioned to take advantage of IT opportunities domestically with imported and offshore workers.

I haven't worked with the large consulting firms in a long time, but I actually worked for a similar organization recently. I never thought that they were good at taking advantage of offshore labour to cut costs while keeping quality high. It seemed to me that the cost focus dominated the entire exercise, with a kind of implicit belief that India and China were unable to provide quality service anyway. But that's just my experience, I'd be more interested in hearing yours.

[bush_cheney2004]

....It seemed to me that the cost focus dominated the entire exercise, with a kind of implicit belief that India and China were unable to provide quality service anyway. But that's just my experience, I'd be more interested in hearing yours.

India had a head start and continues to have the lower language barrier advantage. We also outsourced to the Philippines, mostly for testing. Cost is the big driver, and billable hours need to be managed efficiently to get the most value. Onshore consultant houses can get us skilled developers on work visas (we use Accenture and InfoSys)...they roll off the project when no longer needed without any HR fuss.

The quality of the offshore deliverables is directly related to how well requirements are developed and communicated, along with well integrated teams that can leverage the 12 hour time difference as an opportunity instead of a liability. To be clear, poor quality work can also come from a mismanaged project without any offshore resources, as about 2/3rds of all IT projects fail anyway. Just ask President Obama.

[Michael Hardner]

To be clear, poor quality work can also come from a mismanaged project without any offshore resources, as about 2/3rds of all IT projects fail anyway. Just ask President Obama.

Yes, and I have inside knowledge on that example. Basically, some companies use the lower costs as a de facto excuse not to improve management, and especially communication and planning. They effectively threw cheap labour at their problems and overallocated lower cost resources to paper over their scheduling and quality problems.

But that only hit the 'snooze' bar on mismanagement problems. It sounds like we're in the same field - let's [MLW] chat on that sometime.

[bush_cheney2004]

Yes, and I have inside knowledge on that example. Basically, some companies use the lower costs as a de facto excuse not to improve management, and especially communication and planning. They effectively threw cheap labour at their problems and overallocated lower cost resources to paper over their scheduling and quality problems.

Sure, I've seen that no matter how the project is resourced...onshore or offshore. About five years ago, we needed a new roof and after taking three contractor bids, I asked each one if they employed immigrant labour (legal or illegal). They all laughed and told me good luck finding a cost competitive roofing contractor that didn't use such labour. The crew (mostly from Paraguay) showed up and executed a textbook R&R roofing job with frequent foreman checks and city permits/inspections in a single day. I was impressed.

We see a lot of that in the IT biz too....emigres trying to live the "dream" and obtain permanent residency. They are motivated to do well and have already escaped from whatever lack of opportunity (or worse) that they left back home.

Edited February 11, 2014 by bush_cheney2004

[Michael Hardner]

The crew (mostly from Paraguay) showed up and executed a textbook R&R roofing job with frequent foreman checks and city permits/inspections in a single day.

I suspect that people who know how to manage engage good managers.

[bush_cheney2004]

I suspect that people who know how to manage engage good managers.

Yes, they are key to wringing out the most value. We always have an onshore asset who it partnered with the contracted offshore resources. We also fly one member of the management team to India or the P.I. each year to check on things. Burning garment workers are bad for business !

[Moonlight Graham]

I don't think that's necessarily true either. Certainly much of the profit goes to people who "own the technology", but there are many benefits besides profit. In the advanced society that we all live in as a result, whether one is an average citizen or a wealthy investor, life today is far far more comfortable, safer, and longer than it was in the past. Besides those obvious metrics, the average person today has far more choice as to what they will do in life, knows far more about the world, endures far less drudgery, communicates with people around the world, etc. The benefits of advancing technology affect everyone's lives.

Technology has given the world many wonderful benefits, which are pretty obvious. However, technology also has downsides and humans need to manage the power of technology better than we do. Downsides can be environmental (ie: pollution, ecological destruction), health hazards, improved ability to cause violence/death (nukes, guns, drones etc.). Communication technology is very useful but ironically also can cause more social isolation, where we spend a higher % of our time texting, emailing, or talking to people on Facebook (or MLW) and a lower % of time talking to humans in real life or even on the phone. Our leisure time is also increasingly spent absorbing mass media (and a lot of brain-dead, superficial, socially empty media at that) rather than entertaining ourselves through social interaction, which has its downsides. Our mismanagement of technology has also led us to become fatter and less physically active, and when we do exercise we're literally running on treadmills like hamsters instead of jogging or playing sports outside and enjoying our natural environment.

[Michael Hardner]

Technology has given the world many wonderful benefits, which are pretty obvious. However, technology also has downsides and humans need to manage the power of technology better than we do.

Marshall McLuhan wrote extensively on this topic, and his recommendation is that we can't hope to manage the power of technology as much as we can discuss and adapt to it after the fact.

His quote about our so-called understanding of our technology "the one thing a fish knows exactly nothing about is water"

I blog about this topic here:

Downsides can be environmental (ie: pollution, ecological destruction), health hazards, improved ability to cause violence/death (nukes, guns, drones etc.).

Alienation, social change, and ... with large changes ... war and violence seems inevitable.

[Boges]

Do you really need 2 people to operate a train?

http://www.thestar.com/news/gta/transportation/2014/02/07/driverless_subway_trains_not_in_nervous_toronto_says_ttc_head.html

The TTC has the technology to run its subway without drivers. At least it will in 2018, when it completes installation of its new $566 million computerized signaling system on the Yonge-University-Spadina line.

Cities from Vancouver to Shanghai are already running driverless trains, although many still maintain staff on the vehicles. But TTC CEO Andy Byford isn’t ready to drop operators from the Toronto subway system.

In theory the TTC could put its busiest subway on auto-pilot once the new signaling system, called Automatic Train Control (ATC), is fully operational.

But Byford thinks single-operator trains are as far as Toronto should or wants to go.

So why not let the computer do all the work?

Byford offers three reasons:

Push-back from the union representing the TTC’s 612 subway operators and guards would be substantial. But that’s not his main objection, he said.

Automatic Train Control is only one piece of the infrastructure required to go driverless. The TTC would also need to install platform edge doors that would prevent people from jumping or falling to track level. They could also prevent many delays caused by debris falling on the tracks.

The doors — used on the Pearson airport people mover, the LINK train — line up perfectly with the train doors, opening once the train comes to a halt at the platform.

DING DING DING!!!

Computers can't do what people can because Union jobs will be lost. Ignore that the system will run faster for less price.

[cybercoma]

war and violence seems inevitable.

Far from it. Technology allows democracy to flourish, since people are better equipped to communicate en masse. So you have what we've seen in the Middle East over the last couple of years. Nevertheless, war and violence are not necessarily inevitable ends here. Economic integration between nations on global markets makes war and violence less likely because it disrupts trading, thereby hurting the economic well-being of nations engaging in war. This is at least partially why there has been nothing like WWII in 75 years. Where we do see the most violence and conflict are in nations that haven't been integrated yet, mostly because they were decolonized following WWII and are still seeking stability.

[Michael Hardner]

Far from it. Technology allows democracy to flourish, since people are better equipped to communicate en masse. So you have what we've seen in the Middle East over the last couple of years. Nevertheless, war and violence are not necessarily inevitable ends here.

Democracy flourishes, as we've seen, but more often then not it's after violence and war. Is it inevitable ? It remains to be seen, but the scale of change would historically mean a much larger scale of violence - that is, involving seemingly stable countries such as North America, China or even the world.

Economic integration between nations on global markets makes war and violence less likely because it disrupts trading, thereby hurting the economic well-being of nations engaging in war.

True, but international war is but one form of violence. Violent labour struggles, leading to revolutions in some part, were a direct result of industrialization although they happened much later.

[GostHacked]

Do you really need 2 people to operate a train?

http://www.thestar.com/news/gta/transportation/2014/02/07/driverless_subway_trains_not_in_nervous_toronto_says_ttc_head.html

DING DING DING!!!

Computers can't do what people can because Union jobs will be lost. Ignore that the system will run faster for less price.

The automation revolution is coming and will put many out of work. How do we deal with that?

[Michael Hardner]

The automation revolution is coming and will put many out of work. How do we deal with that?

We may decide that debt isn't real, and choose to expand welfare eligibility infinitely, we may reinvent state enterprise, we may feel the need to tag and track the unemployed and drug test them to ensure that they are productive. Lots of scenarios are possible, but it's pretty difficult to imagine the future.

How many 1950s sci-fi films featured gays, or even women on the crew ? McLuhan (yes, you should all be getting annoyed with the frequency with which I invoke his name) spoke of the rear-view-mirror tendency when trying to look forward, but caught in the past/present.

[Michael Hardner]

This topic is covered by real economists on the Econ Talk podcast below:

Erik Brynjolfsson of MIT and co-author of The Second Machine Age talks with EconTalk host Russ Roberts about the ideas in the book, co-authored with Andrew McAfee. He argues we are entering a new age of economic activity dominated by smart machines and computers. Neither dystopian or utopian, Brynjolfsson sees this new age as one of possibility and challenge. He is optimistic that with the right choices and policy responses, the future will have much to celebrate.

Econ Talk podcast

Overall, economists are optimistic but without any reason. Furthermore, the people in general don't seem to mention the historical backlash from the industrial age, which baffles me. At one point the host says something like "this is the first technological advance that hasn't benefited everyone".

I was scratching my head at that one, given that the first Industrial Age produced modern capitalism, the results of which produced Communism.

[GostHacked]

We may decide that debt isn't real, and choose to expand welfare eligibility infinitely, we may reinvent state enterprise, we may feel the need to tag and track the unemployed and drug test them to ensure that they are productive. Lots of scenarios are possible, but it's pretty difficult to imagine the future.

Debt is not real, so money is not real.

But what you speak of is a scary future, where we are all tagged and our level of lifestyle is afforded by how much we can mold ourselves into their system. Well more like how they mold us into their society.

A tyrannical Dystopia is where we are heading when automation fully kicks in. If you are tracked and drug tested, that does not seem like you are living in a free society anymore. We are heading for a tipping point here soon. Where the number of machines working will be higher than the amount of people working.

What do we do then? I don't think this transition will be a long one, simply because of the exponential growth of technology and computers. We have already seen that in the last decade with the Internet, smart phones, wifi ect ect. A huge contrast from the 90s, which was a lot different than the decade before and so on,

The only way this may work is if money is abolished, but then you have a problem of being controlled by the technocracy and you get rewards based on your actions/work in order for everyone to be treated equally.

How many 1950s sci-fi films featured gays, or even women on the crew ? McLuhan (yes, you should all be getting annoyed with the frequency with which I invoke his name) spoke of the rear-view-mirror tendency when trying to look forward, but caught in the past/present.

Society was not really conducive to women or gays or blacks when it comes to film in the 50s. You are best to read some of the sci-fi that was created then. Like Asimov for example. The Foundation series can be taken as an interpretation/prediction of our future. The empire gets too big it ends up crushing itself under its own weight.

[Michael Hardner]

Debt is not real, so money is not real.

But what you speak of is a scary future, where we are all tagged and our level of lifestyle is afforded by how much we can mold ourselves into their system. Well more like how they mold us into their society.

That sounds like today, really. Your level of lifestyle is afforded, today, by how much you can sell yourself into our system. Exactly.

A tyrannical Dystopia is where we are heading when automation fully kicks in. If you are tracked and drug tested, that does not seem like you are living in a free society anymore. We are heading for a tipping point here soon. Where the number of machines working will be higher than the amount of people working.

No, no... that's just one option. If you listen to the podcast you will understand that no one really knows how this will work out.

The only way this may work is if money is abolished, but then you have a problem of being controlled by the technocracy and you get rewards based on your actions/work in order for everyone to be treated equally.

That's even more interesting than the suggestions I offered. Money is replaced with reputation perhaps. Or better yet, money is only used to buy luxury items and basic living is provided for.

By the way, some of the words you use - technocracy, dictatorship, imply a central authority which is more and more impossible to maintain today. That's how oppression worked in the past, but in the future it will more likely be the omniscient mob.

Society was not really conducive to women or gays or blacks when it comes to film in the 50s. You are best to read some of the sci-fi that was created then. Like Asimov for example. The Foundation series can be taken as an interpretation/prediction of our future. The empire gets too big it ends up crushing itself under its own weight.

I may indeed read that one.