Thriving in the New World of Big Data and Robots

robots

I remember reading a number of stats about the 2008/2009 Global recession and there was one stat that stood out to me – it was how the downturn hit males harder than ever before in previous downturns.  The unemployment rate was much higher (as well as the length of time to find a new role) for males versus females, and by a wide margin.

The reason?  The layoffs were concentrated in many areas that typically employ a higher percentage of men, such as in manufacturing, the trades and construction.

In this new era of Big Data and Robots, this may seem more like the norm than a trend...

Technological advances have often hit many traditional male roles first

When the Industrial revolution began, machines were able to replace much of the manual labour that existed at the time.  In fact, some areas, like agriculture, now employ as few as 5% of the workers that they would have then.  Since the majority of these jobs were filled by males, it makes sense that they would get hit the hardest.

The same holds true for much of the advancement today in the world of Business IoT.  While we all tout how giving companies better information allows them to be "more productive", this mostly refers to how they are able to do more work with less.....so, either they cut staff to do the existing workload or they increase their work without increasing their headcount.

Many of today's jobs would not exist if better technology existed decades ago

One of the businessmen from history that I admire is Henry Ford.  He managed to put together a system that is still basically used today by most automobile manufacturers.  However, knowing how progressive Ford was, is it hard to imagine that he would have never employed humans to build cars if robots were available back then?  I mean, Ford once referred to people as saying "one of the problems with humans is that their two hands come with a brain".  The only reason why he used people was because that was all he had.

Women will do better than men in this new era, and not why you may think

I don't want to stereotype men vs. women, in terms of traditional roles.  There are some excellent male teachers and nurses, as there are many excellent tradespeople who are women...that has nothing to do with why women will succeed better.

The reason is that one of the important skills that robots cannot do as well as humans is interact.  Sure, they can be taught to read certain body movements and gestures, but they are not great at interacting.  This requires the ability to be caring, have empathy and to be able to better support your fellow worker.....things that, let's face it, guys just are not typically as good at.

It is no secret that while the number of manufacturing jobs have declined in the past decade, jobs that require interaction with people as part of the day to day function have not.

It's not all doom and gloom

I can only imagine if we had Twitter back in the beginning of the Industrial revolution, we would have heard all kinds of doom and gloom.  Millions of people had their jobs replaced by machines, and I am sure that this caused huge hardship for them and their families.  However, as a society, we not only bounced back, but we thrived...and we will do this again.

The Bottom Line

No one ever likes to lose their job.  It is difficult from a financial standpoint and for many, it is equally difficult from an emotional standpoint.  However, change always has and always will happen, so it is important that young workers get the skills that they need to compete with not only the global workforce, but also the next generation of technology.

Wanted in the IoT Space: More Entrepreneurship

Innovation

Each month, I try to read a few magazines on my iPad, although most times, they end up piling up until I get on a long flight with time to kill.  One magazine that I like to read is Inc., which focuses on a variety of areas of entrepreneurship and business.  I especially like to read their annual issue that talks about the fastest growing 500 privately-held businesses.

Many entrepreneurs might look at this issue and realize that their businesses are actually growing faster, but may choose to not submit their company for a variety of reasons....so, the list is not perfect.  However, it gives you a fairly accurate account of some growth areas where people are seeing the most success.

One thing I noticed...not a lot of IoT focused companies on there.

Sure, there are some....ranging from home automation to "big data" etc.  However, for an area that is supposed to be the hottest area of technology (at least according to some), one might think that there would be more on this list.  It might be that some of the businesses in the IoT sector are just too new (there needs to be a bit of track record to make this list), or maybe my fellow IoT entrepreneurs are just a little shy.

Instead, the list covers other areas where the growth might not be as obvious, such as companies:

  • Offering direct mail programs
  • Making bobblehead dolls
  • Repairing electronics such as phones
  • Leasing portable structures
  • Making road salt

Why is IoT not better represented?

Too little action for amount of talk  

I have heard this one a few times.  Right now, the adoption rate is not nearly as exciting for IoT as it is in other areas of the technology world, such as social media and search.  Investors only have so much capital to go around, so they often don't look that far out.

Not enough opportunity to disrupt  

Many of the entrepreneurs in some of the more established areas made their money by disrupting or changing a particular industry.  I mean, road salt has been around for decades, but one would think that either a technological change to the product or a change in distribution models might be an easy way to shake up an established market.  IoT is still really in its infancy, so I don't doubt that many entrepreneurs think that it may be too much effort to disrupt the market in a meaningful way, at least not when compared to other areas.

The race for the bottom is never a way to make money  

One only has to look at the AVL market to see a disturbing trend.....prices dove way faster than they needed to.  I have heard stats about the AVL industry....how fast it is growing, how little market is penetrated and how easy it is to sell.  However, I see too much of a "race to the bottom" on pricing every day in this space.  Many entrepreneurs look for areas that allow them to have decent margins as well as the ability to differentiate themselves over the long-term, as a way to maintain decent returns.   From what I have seen, this is already starting with other areas of the IoT space, like hardware and sensors....not a good trend.

The money is often at the trailing edge

I remember buying a laptop for college, some 20 years ago.  It was slick, it was state of the art, it cost $2000 and it was about as smart as an Apple Watch is now.  Technology gets better and prices tend to fall over time....so, it makes sense to sell everything at the beginning of the cycle, right?  Well, for some, it can, but for many, it might make sense to wait until there is an established market and find ways to disrupt it.....I suspect that many entrepreneurs are thinking this about IoT.

The Bottom Line

Please don't get me wrong, there are some truly talented entrepreneurs whom have made huge investments (and money so far) in the world of IoT.  However, I think that we need many more to see the growth that is predicted by most.  I look forward to seeing more such stories in future additions of the Inc. magazine's fastest growing companies, as it will make for great reading on a future flight!

Engineering: Most valued degree in upcoming world of automation

As a father of two boys, 12 and 6, I naturally worry about their future.  I think all parents do, so I am definitely not alone.  I worry about things like health, happiness and them having a good marriage. But as a pragmatic person, I tend to think more about things I can have an influence on helping them with.  After 14 years of marriage, I still make rookie mistakes, so I’m not sure I qualify to help much in that regard!

One thing I try to do is reinforce the importance of education in the chances of their success.  Sure, many people have become successful/wealthy without post-secondary education, but that is becoming less likely all of the time.  I also try to stress that while they should pursue a career that will allow them to be fulfilled, they need to keep in mind what jobs may actually be there 20-40 years from now.

I mean….would it make sense for me to move them towards a career that will likely be replaced by robots (like in manufacturing) or automation/software (like accounting)?  I think parents need to be cognizant of the fact that while there are no guarantees that any job will be there 50 years from now, we can be assured that the chances of many are next to nil.

One of the areas that I believe will do well in the future is Engineering. While I often tease some engineers for their single-mindedness, I do have a lot of respect for not only their knowledge, but also for the methodologies they learn, as they often are easily applied to many other fields.  I have seen successful people in areas ranging from Sales to Marketing to Legal who all have those little rings on their pinkie finger.

Why Engineers should thrive…

In the previous shake-ups (or revolutions) that we have seen in the world of business, they have always targeted the blue collar side of the workforce.  The Industrial revolution targeted the manual labourer – whether they worked on a farm, on construction projects or in the transportation field.  The Internet revolution was not as aggressive in cutting jobs, but it did take out many positions in Finance, Travel and other areas.  However, many people have commented that these two revolutions did not generally go after College-educated people in any significant manner.

Automation will change that.  Accountants, analysts and even writers will be attacked like never before…as will positions like chefs and medical assistants.  The one field that will likely thrive is Engineering. Here's why:

Someone needs to design these things

Humans are devouring software code in numbers that stagger most people’s minds, so Software Engineers will be needed in record numbers.  Robots use incredible amounts of computing power, so Computer and Hardware Engineers will be needed to keep up.  Finally, the complexity of the devices will mean that repair technicians, while not needed in huge numbers, will have to have Engineering backgrounds.

Engineers can find “needles in haystacks”

With the increase in automation comes an increase in Data….the amount that is created, the amount that needs to be stored and the amount that needs to be filtered through to determine what is valuable.  Engineers will be needed in all areas...cloud storage/computing, data analysis and communication networks capable of delivering thousands of times what we do now.

Engineering is not just what they learn but how they learn

I spoke earlier about how Engineering grads have often found success in other areas and this is not by accident.  A methodical way of thinking often helps to solve the most complex problems, regardless of the field where they may be.  Many engineers bring this to the table.  As well, the most successful Engineers I have seen take this ability and combine it with some creativity to go on to successful C-level careers, something I expect to see more.  Expect more CEOs to come from MIT and less from Harvard Business School in the future.

The Bottom Line

So, should we all just push our kids into Engineering?  Of course not…there will be plenty of need for other fields including Medicine, Arts and Business.  However, the goal of any parent should be to help place their kids into a position that allows them to have the best chance of success.  I think a background in Engineering does this.  It obviously does not ensure anything….it can’t replace drive, determination and will, but there are other ways you can instill these traits in your children.

Watson makes it move into taxes…what is next?

As a whole, I am pretty good with numbers.  As a salesperson, I was always strong at calculating things like margin and selling discount levels.  As an owner of a growing business, there are always numbers to look at…..growth rates, interest rates and payroll are just a few of them.  However, like most people, I dread the word “taxes”.

Sure, I do hate paying them, who doesn’t?  However, I also just hate the thought of them…changing regulations, the burden of paperwork and the concern about what to claim and what not really tire me out.  Luckily for us, we have a great Finance team, but even they struggle with the ever-changing rules.  Apparently, they are not alone.  Many accountants talk about the incredible complexity of a 70,000+ page tax code, let alone annual changes.

Enter Watson.

Our friends at H&R Block are using IBM’s Whiz machine to help find deductions, credits and perhaps Pokemon in millions of tax returns.  They are spinning it as a way to have an extra “set of eyes” go over your return…but let’s face it, it is really the death of accountants in its infancy.

Not to stereotype, but accountants are not usually the most entertaining people to be around.  I mean, if I asked you to list five occupations of people that you would not want to be stuck with on a 4-hour car ride, most people would have accountant in their list.  Their strength is in numbers, not people.  And, numbers are one of the things that is most easily done through automation.

Why aren’t more people freaking out about this?

Watch any US news for 15 minutes and you are bound to hear about manufacturing jobs and how the new administration is trying to protect them.  So, why aren’t we hearing anything about this?

Well, for a few reasons…

No immediate jobs lost?
It is smart of H&R Block to consistently talk about how Watson is being used to help maximize your refund...when it is likely there to reduce the needs of accountants.  However, since most of these accountants are contractors, it won’t show up in the job loss report.

People like to save money, especially taxes
Gotta hand it to the Marketing folks at H&R Block. They did an excellent job in selling the benefit while quietly forgetting to mention any possible downside.

Everyone likes Jon Hamm
I say this in jest, but there is some truth here.  Jon Hamm is one of the most likeable endorsers out there.  He is equally liked by men and women and he carries a certain sense of sophistication and humility.  This helps to build up people’s trust.

The Bottom Line

Make no mistake about it.  This use of Watson will reduce the number of accountants at H&R Block at some point, even if they don’t do so this year.  And, who can blame them?  It seems that this may be an application where the use of Watson will not have any degradation on the level of performance and will do more with less.  So, how long until we see the next announcement? How long until Watson is used to find reductions in your Insurance costs, as an example?  This is the first of many of these, yet no one seems to care.

The move to cloud is exciting, unless you are looking for a job.

Ok, not sure if you are like me, but I have wondered why more college kids don't use the term "cloud" as a drinking game....much the same as they did in 2008 with Sarah Palin and the term "Maverick"....thanks to SNL for that!

It seems that everyone wants to be part of the cloud.  As I have written before, even the stodgiest Industrial companies are now putting all of their future in cloud-based services....yes, I am looking at you, GE.  And for good reason....it is what investors want them to do.

As we move more data to the "cloud", it causes a tremendous need for computing centres and consequently, they are opening up all over the place.  One of the prime places they are doing so is in rural America, especially in some of the harder hit economic areas, and this makes sense.  Space/land is usually cheap and there is an abundance of lower cost labour.

The problem is that not a lot of labour is needed.

Cloud = less workers needed

Imagine a huge warehouse, maybe the size of an old automotive plant....it is filled with servers running down the aisle, as far as the eye can see.  Back when it was an automotive plant, there were hundreds, if not thousands, of workers on each shift, plus a huge support crew to keep things running.  In a data center, it is a lot of nothing.  Sure, it takes huge manpower to set up the place, but once it is running, it doesn't require many people.  You could run the place using remote call centres anywhere in the world. So in fact, you just need someone there in case the actual hardware had issues, which in the case of enterprise grade stuff, is not that often.

So, once you control access to it, it pretty much runs itself, at least compared to other similar sized facilities.  As a result, many jurisdictions are ending up a little disappointed.  They often gave huge tax breaks (or maybe even free land) to companies like Google and Microsoft to set up these places and then found out that it did little to help the unemployment problem in their area.

The Bottom Line

The new world of technology is very exciting.  It allows for incredible mobility across devices, very low levels of downtime and incredible speeds of performance at very low historical costs.  It also does not need a lot of people, and this should worry politicians.  For all the talk of getting jobs back to America, neither Trump nor Clinton addressed the true elephant in the room.....what do we do with the technology displaced?  And, the problem is only going to get worse with the introduction of things like self-driving cars.  We need to wake up to the fact that technology may be moving at a faster rate than we can deal with, but who is going to tell it to slow down?