Are robotic smart machines behind the jobless recovery?

Two new studies say a wave of robots is coming quicker than most people think to take (Canadian) jobs. But as Don Pittis writes, that wave is already crashing ashore.

Two new studies say robots are coming to take (Canadian) jobs

An engineer makes an adjustment to the robot "The Incredible Bionic Man" at the Smithsonian National Air and Space Museum in Washington October 17, 2013. The robot is the world's first-ever functioning bionic man made of prosthetic parts and artificial organ implants. (Reuters)

I bet you think your job could never be done by a robot. "Not in my lifetime," Mark Murray told me last week, and he works with robots. 

But that's not what the experts say. 

Two new studies, one from a group of Oxford University academics, another from some well-respected business analysts at the Gartner Group, both say the invasion of the smart machines is coming quicker than most of us think.

A bit of my own Canadian research shows it's here already, and growing fast.

The Gartner report was interesting because it was directed, not at the workers likely to lose their jobs, but at company bosses.  

"Most business and thought leaders underestimate the potential of smart machines to take over millions of middle-class jobs in the coming decades," said the Gartner Group release, warning CEOs of "machine-driven job elimination ... overwhelming the market's ability to create valuable new ones."

Gartner says that the impact on business will be "widespread and deep" over the next seven years. 

The other recent study, also in October, from the Oxford Martin Program on the Impacts of Future Technology, says the same thing on a slightly different time scale. Their analysis shows that 45 per cent of American jobs could be taken by computers within two decades. 

As both studies also show, the process has already started, and some experts say it is at least partly to blame for the so-called jobless recovery.

It will be something to think about when we watch the next release of Canadian job numbers later in the week. 

Little orange robots

For a glimpse of the future I visited Think Logistics robotic warehouse just north of Toronto.

Think Logistics is one of two in this country to use the Kiva Systems robot retrieval system. And in the year that the warehouse has been operating you may have used it too, without even knowing it. 

'Carl' fills drinks for patrons at the Robots Bar and Lounge in the eastern German town of Ilmenau, in July 2013. (Fabrizio Bensch/Reuters)

This is how it works. You order a product or printed material from the website of a well-known Canadian company.

The order goes instantly to the Kiva Systems computer at Think Logistics where little orange Kiva robots scoot out and find the shelf in the warehouse where the product is stored and bring it to someone like Mark Murray, who transfers it to a bin for automated packaging.

Then your product is mailed out, labelled with the name of the company you ordered it from.

 "Before all of this was built, all the inventory was in the racks," says Murray, as he works with the little orange robots. "So I'd have six or seven people go out and do the exact same thing I'm doing now." 

Think Logistics is not an isolated case. Similar systems are spreading to warehouses elsewhere.​

And Jack June, a unionized auto worker in Windsor, says that during the last 30 years, he's watched more and more jobs disappear to automation.

One of the latest innovations is computer vision, a program that can choose a specific part from a rack and knows when supplies are running out.

Accelerating change

While robots may be a visible symbol of smart machines taking human jobs, the change is more subtle and widespread.

Robert Hashimoto, president and founder of Think Logistics. (Think Logistics website)

Robert Hashimoto, the founder and president of Think Logistics, was a victim of the exact same phenomenon.

His first business, making and shipping CDs and DVDs, was hit by the new technology of digital downloading. It was only by starting this new venture that he was able to keep his employees in work.

You can probably see it where you work too. Here at the CBC we can do things on our desk computer that used to require an entire studio or a team of graphics experts.

"It's hard to think of any kind of job that isn't going to be affected, or isn't affected already, by changes in IT," says Adam Saunders, a professor at University of British Columbia's Sauder School of Business. 

Saunders collaborates with Erik Brynjolfsson at the Massachusetts Institute of Technology, the author of a book whose title alone sums up the issue: Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy.

The key word is accelerating. As Saunders sees it, most people perceive life as a linear progression, with change happening at a constant rate. He says the confusing thing about the current robotic revolution is that change is actually happening at an exponential rate.

"Just like how the processing speed doubles every year, another way of saying it is that you can get the same technology for 50 per cent less money every year," he says.

"So as technologies become cheap enough, they reach a critical mass and seem to have come out of nowhere and transform the labour market."

'Arms race' in smart machines

Some supporters of robotics and technological change say we have nothing to fear. They point to the agricultural revolution that drove people off the land and into the cities, where they found a new kind of work. They say the same thing will happen this time.

As Hashimoto at Think Logistics told me, he is creating jobs, not cutting them, as his company grows.

Mazda's new state-of-the-art robotic assembly line in Hofu, Japan, is rolling off vehicles at a stunning rate of one every 54 seconds. (Shizuo Kambayashi / Associated Press)

But even he is looking for new efficiencies in order to compete with other companies, something the Gartner Group refers to as "an 'arms race' for acquiring and/or developing smart machines."

A shortage of labour is not the issue. Chinese electronics companies are reported to be installing robotics and vision-assisted systems to run their assembly plants.

Rio Tinto, owners of the Iron Ore Company of Canada, is already using fully autonomous trucks in the Pilbara region of Western Australia. It's more than an experiment. They expect to have 40 of the giant robotic vehicles operating by next year.  

Even closer to home, transit systems like Vancouver's LRT operate without a driver.

At the heart of the issue of course is cost. "It's worth remembering that IT cost is typically about four per cent of annual revenue, whereas the labour costs that can be rationalized by smart machines are as high as 40 per cent of revenue," says the Gartner report. 

This is an issue that thoughtful people have to address.  

Saunders suggests the solution is a "new entrepreneurialism" as we all go out and create jobs that no one has ever thought of before. But it is not clear that people who lose their jobs in the first wave will be qualified for whatever will come next.

Earlier this year, Nora Young, the host of CBC Radio's Spark had an excellent discussion with silicon valley entrepreneur and author Martin Ford on the long-term economic impact of the robotic revolution. 

As Ford said, our current economic model where rich people bring their capital and everyone else brings their labour may no longer work when the capital, in the form of robots and computers, is actually the labour too. 

Ford is also convinced the transition is coming and coming quickly. If so, the answer "not in my life-time" may depend on just how long you intend to live.


Don Pittis

Business columnist

Based in Toronto, Don Pittis is a business columnist and senior producer for CBC News. Previously, he was a forest firefighter, and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London.