It’s not a science fiction movie- robots really are taking over.
You might think that sounds crazy, but robots are already taking over people’s jobs on a global scale. This is the new reality and it’s something we all need to come to terms with.
Make no mistake, burying your head in the sand and “hoping” automation won’t effect you, means putting your financial future at risk. Each day that goes by, the prospect of losing your job becomes even more real.
But it’s not all doom and gloom for those who face the issue head on. There is opportunity among the chaos and steps you can take to secure your financial future.
What Is Job Automation?
Job automation (AKA technological unemployment) is unemployment resulting from changes in technology. In and of itself, this is not a new phenomenon.
Mankind has been striving to make their life easier, and their businesses more efficient, for centuries. There have been many examples of job automation over the years.
One well known example is artisan weavers, who were replaced by the mechanical loom during the industrial revolution in 1785. Or more recently, with cashiers being replaced by automated self service tills.
So, there’s no disputing that technology disrupts jobs.
However, there are different opinions about technology’s affect on jobs over the longterm. Some say automation will lead to large scale unemployment, while others believe automation simply creates new jobs and new opportunities.
In reality, there’s truth in both points of view, so it’s not as simple as black and white. Which is why it pays to educate yourself as best as possible, so you can make your own mind up.
In any case, automation is now a very different beast to what we’ve seen in the past.
Firstly, the speed of technological change is faster than ever. Never before in history has technology evolved at such an incredible pace. Massive companies and entire industries are being disrupted without warning, on a large scale, because of advancements in technology.
Second, automation is further reaching. These are not just “good machines” that automate general repetitive tasks like it was during the industrial revolution. No. We’re talking about Artificial Intelligence that is already capable of performing highly advanced tasks.
And we can’t blame companies for wanting to increase profitability either. This is business. If a company can decrease it’s labor costs and increase it’s output, it WILL do so.
Profit wins every time.
Who Should Be Concerned About Losing Their Jobs?
According to many data backed reports, the worst hit jobs will be some of the most common. For example retail salespeople, fast food workers, labourers, secretaries, general office workers, cashiers, and cleaners. The list goes on and on.
But it doesn’t stop with the lower level, more repetitive jobs though. Computers are more advanced than ever before, so it’s no longer a case of machines making some tasks more efficient or cutting out ‘some’ jobs in ‘some’ industries. No job is safe.
Here’s what AI and Computer Science expert, Jerry Kaplan has to say:
Today, automation is blind to the color of your collar. It doesn’t matter whether you’re a factory worker, a financial advisor or a professional flute-player: automation is coming for you – source
Let’s briefly discuss some of the different professions that are at risk of being automated.
Accountants: You might think accountants are safe due to the complexity associated with their role. I mean, they need a degree and a formal qualification- so how on earth could robots take their job?
Truck Drivers: You might assume that truck drivers would never be out of a job because we need REAL people to drive. Allowing robots to do our taxes or operate vehicles would be crazy right?
Not according to Vasant Dhar, professor at the Stern School of Business and the Center for Data Science at NYU.
Between accounting professionals and truck drivers alone, about 4.5 million human jobs could be ceded to robots over the next few years – source
This is already starting to happen. One of the most popular accounting firms on the planet for example, H & R Block, is now using an advanced AI system known as IBM Watson to help with their accounting. The team at IBM believe that “this is the future of tax preparation, and H&R Block with Watson is leading the way”. When it comes to truck drivers and transport related jobs, we need look no further than self driving vehicles.
Delivery Drivers: Even without self driving cars and trucks, delivery staff are in the firing line due to advancements in drone based delivery systems. From fast food restaurants to massive online stores- drone delivery is on the horizon.
Legal Secretaries: Advances in technology mean that an ever greater number of traditional, routine tasks within the legal sector can be automated by smart and self-learning algorithms – says Peter Saunders in the Deloitte Insight Report. The same report predicts that 39% (over 100,000) of jobs within the legal profession will be automated within the next 10 years alone.
Retail Salespeople: Up to 7.5 million retail jobs within the US are expected to be “automated out of existence” within the next 10 years. This represents 10 percent of the entire US working population says the Cornerstone Capital Group study, and cashiers will be the worst effected.
Fast Food Workers: According to Yum Brands CEO Greg Creed, many fast food restaurants will become automated. He believes the full affect of this will start taking shape by the mid 2020s.
This is really just the just the tip of the iceberg though. There are many examples of how automation is going to be affecting large numbers of people throughout the world, across many different industries.
Almost everyone will be affected by job automation in one way or another.
The jobs that are said to be least effected are those requiring “empathy, creativity, and a human touch”. This is why healthcare professionals such as nurses, Marketing professionals and CEO’s are expected to be among the safest positions.
However, even if your job is safe from being wiped out completely, some of the tasks within your job could likely become automated. Meaning less hours and less pay. Considering many full-time workers struggle to get by as it is, this is far from a good thing.
Where Is Expected To Be Hit The Hardest?
Just as few jobs are safe from automation, few countries are safe from it’s reach.
In fact, job automation is expected to impact over 1 Billion full-time jobs across the globe. And that’s just with the technology we already have.
1.2 billion full-time equivalents and $14.6 trillion in wages are associated with activities that are automatable with current technology. This automation potential differs among countries, ranging from 40% to 55% – source
A study conducted by PwC states that the United States will be the worst hit because “more employees work in positions requiring routinized tasks” compared with other major economies. The report concludes that an estimated 38 percent of ALL jobs in the US will be lost to automation during the 2030s.
As you’d expect, the worst hit areas within the United States are expected to be large metropolitan areas. The Institute for Spatial Economic Analysis (ISEA) conducted a study that outlines which metro areas be most effected.
Some areas may see over 60 percent of automation related job loss within 10-20 years:
The above map was created by ISEA and uses data from the Bureau of Labour Statistics along with research from Oxford University. So, while no one can predict the future, this is far from some conspiracy theory. It’s grounded in credible, well documented research.
There’s no way to know for sure which country or city will be hit the hardest, but it’s pretty obvious that automation is going to affect a lot of people.
When Will Automation Effect You?
Automation has already begun and it’s only accelerating with each day that passes.
We’ve already touched on historical examples of this. But perhaps the most significant and recent example is within the manufacturing industry.
Automation was responsible for 87 percent of manufacturing job losses between 2000 to 2010 according to a Ball State University study. Millions of jobs have been lost to automation in the manufacturing industry within the last 10 years alone.
It’s impossible to predict just how bad, or how soon job losses will come about as a result of robotics, AI and/ or automation. The answer depends on many economic factors which are beyond anyone’s control or ability to predict.
Not to mention, what happens to you personally, depends on what you do for a living.
In any case, automation is here, and it continues to take hold at an alarmingly fast rate. Which, as far as I’m concerned, is enough to warrant some serious thought.
How eCommerce Is Amplifying Job Losses
One of the driving forces behind automation is a shift in consumer shopping behaviors.
More and more people are choosing to shop online. And why wouldn’t they? It’s faster, cheaper, more convenient. It allows consumers to compare brands, products and prices easily, in a matter of minutes.
In any case, this is taking it’s toll on brick and mortar businesses, and the folks they employ.
The evidence of falling sales and job losses within traditional brick and mortar companies is clear. Sales at US department stores continue to decline, and people are losing their jobs. The data shows that 45 percent of jobs within non-discount department stores have been lost since 2000.
Even seeing good companies are going bankrupt due to ecommerce.
For example, Toys “R” Us filed for bankruptcy recently. They have over 1600 stores and have long been one of the most successful toy stores in the United States. Like many traditional retail stores, ecommerce was a contributing factor in it’s demise.
Thankfully, it’s not all bad news. Just as the disruption of ecommerce has taken some jobs away, it has presented new jobs.
As you can see from the data above, many jobs have been lost in traditional department stores, but many new ones have opened up. The need for ecommerce related jobs has tripled in recent years.
Companies like Amazon are thriving and taking full advantage of the shift towards online shopping. Times have changed, and continue changing, and sites like Amazon are way out in front of the change.
Retailers have awakened to the fact that Amazon and other online players are an existential threat to retailing – source
You might be thinking… “that’s great for multinational corporations, but what about me?”.
Well, the success of online business presents NEW opportunities for people who are both looking for a job and who have more of an entrepreneurial spirit.
If people are spending money online, there are jobs and opportunities to be had.
Data from BigCommerce shows that 96 percent of ALL US residents with an internet connection have shopped online at some point, and that ecommerce is growing by more than 23 percent year-over-year. Considering there’s almost 4 billion people online, the income potential the internet presents has never been better.
What Can You Do If Robots Steal Your Job?
Ok. So enough with all the doom and gloom. What’s the solution?
Unfortunately, I don’t have one. At least not on a ‘macro’ scale anyway. The answer to automation related job loss as a whole, is beyond my expertise and the scope of this blog.
But hey, if I find the “what to do when robots steal your job” handbook… I’ll let you know!
Being serious, there’s very little we can do to stop job automation from happening. Technology will continue to advance at a rapid pace, and businesses will continue looking for ways to increase profitability. That’s just the way it is.
The better approach, in my opinion, is to work with these changes. Not against them.
Learn as much as you can about what is happening, and what will likely happen in the near future. This will allow you to proactively seek out a solution based on your circumstances.
Here are some simple and practical ideas to get you thinking…
1) Get a ‘Less Automatable’ Job
Perhaps the most obvious solution is to get yourself a “less automatable” job. Typically, these are jobs that require more of a ‘human element’ such as creativity, empathy and relationship building. Common examples include medical professionals, teachers, marketers, high level management etc.
Bloomberg provides an interactive chart showing all the different professions, on a scale of safe to automatable. It’s worth checking out if you have the time.
Doing your homework and identifying the safest jobs, is a sensible course of action. But it’s not the ‘be all end all’ either. This route comes with it’s own set of drawbacks.
For starters, not everyone can be employed within less automatable jobs simply due to availability. Second, the more people apply for these so called ‘safe’ jobs, the lower the rate of pay due to basic supply and demand. Third, shifting careers can incur significant costs such as education and training to qualify.
2) Diversify Your Skillset
While some jobs will disappear completely, others may end up ‘shrinking’. Meaning, automation will remove a number of tasks within a given profession, but may not remove the profession completely.
As a result, there will logically be fewer jobs within these professions. And folks who are employed within these roles, may only be employed part-time.
For this reason, experts such as Justin Tobin from DDG believe diversification is best.
being an employee is the equivalent to putting all your money into one stock – a better strategy is to diversify your portfolio – source
This is echoed by futurist Faith Popcorn. She says “we’ll all have seven or eight jobs, with the average adult working for a number of companies simultaneously rather than working for one big corporation”.
On the one hand, diversifying your expertise is smart when jobs begin to ‘shrink’, or if getting a less automatable job isn’t possible. It gives you more options. You may need several jobs, but at least you’re making ends meet.
On the other hand, up-skilling can be costly and instead of answering to one boss, you’re now answering to many. Not to mention, the hours spent commuting to and from all your different jobs could lead you to burnout.
3) Become a Freelancer
Having a job is not the only answer to financial security. In fact, it seems to be less and less ‘secure’ as time goes on. Which is likely why more and more people are turning to self employment. Automation is only going to fuel this.
As Professor Durrant-Whyte puts it:
There will be more and more people in the service industries, self-employed, in the gig economy, Airtasker – source
Becoming a freelancer is a viable option, and you can certainly make good money this way. I personally know someone who works in the ‘gig economy’ on UpWork, making upwards of $250 per hour. While that is an extreme case, it does shows what’s possible.
The trouble with freelancing however, is that you’re still trading your time for money. Instead of owning a business, you’ve essentially got yourself another job. One with a LOT more paperwork, planning and time commitment.
4) Start An Online Business
I personally believe this is the best option. I guess I’m somewhat biased though, because this is how I make money.
I’m not talking about setting up some kind of elaborate online business either, I’m talking about affiliate marketing which is WAY simpler. Put simply, you get paid to promote other people’s stuff online.
We’ve already touched on the incredible popularity of ecommerce giants like Amazon. What you may not know, however, is that you can actually promote any one of Amazon’s 160 million products as an affiliate.
You can do this with their free affiliate program called Amazon Associates.
The affiliate marketing business model allows you to take full advantage of the shift towards online shopping, and create a reliable passive income in the process. I’m not saying it’ll be “quick and easy” but this is something anyone can do.
The potential isn’t limited to Amazon either. You can promote anything you want from some of the worlds most successful companies such as Nike, Walmart, Apple and many others. There’s literally hundreds of millions of products across millions of untapped niches to explore.
I’m not exaggerating here, the opportunity really is that abundant for anyone willing to learn and develop the right skills.
On the plus side, you don’t have to deal with customers, stock inventory, deal with shipping, or any of that time consuming stuff as an affiliate. You’re simply promoting existing products that people are already buying. Not to mention, the profit potential is just as great, if not greater, than a typical online business and the startup costs are extremely low.
The ‘drawback’ to this model, is that it takes time to get your business into profit. There are ways to fast track things if you’ve got deep pockets. But for the rest of us, it takes time and a solid amount of effort. You could reasonably expect to work your butt off for at least 6-12 months before seeing any real income.
That was my experience anyway. But I say it’s worth it, especially when it’s passive income.
The robots really are
coming here and thankfully, it’s not all doom and gloom.
By facing the challenge of job automation head on, you can ‘weather the storm’ and safeguard your financial security during uncertain times. Better yet, you may even find a better career, or start a business that gives you a way of life your old job never could.