The Rise of the Robots: FT and McKinsey Business Book of the Year

Book matters is very good but quality of is not good please do not send the duplicate printing

Starts off with a great view of how the world has progressed in regards to the Job Market in the last numerous years, and then follows up with how AI could impact this further. Martin has a fairly balanced approach to his thinking, and anything other people may consider to be outrageous is often backed by good sources.This book outlines a very interesting future, one that seems heavily dependent on how governments will embrace AI in the near future, and how citizens will be provided for when they no longer have a job to wake up to every morning. It was a very easy read, I would really like to see another book in the next few years to summarize the progress that has been made in the short time since this book was published.For further information from this author, I would recommend looking up The Investors Podcast - episode 158 where Martin is a guest and discusses AI and his book in further detail.

“The Rise of the Robots – Technology and the Threat of Mass Unemployment” is a very important and interesting book. Among the books short listed for the best business book award in 2015 it is the right choice.The subtitle describes the content: “Technology and the Threat of Mass Unemployment.Martin Ford, founder of a Silicon Valley-based software development firm, has over twenty-five years of experience in computer design and software development. With his background as IT expert he describes significant risks of mass unemployment by progressing implementation of information technology and fast growing artificial intelligence eliminating whole job categories. He emphasizes the double role of the employed workforce as workers as well as consumers: increasing unemployment growing into mass unemployment would hit significantly our societies and economies.Readers who study this book and follow Ford’s analysis must come to the conclusion that he describes our economic system as being heavily affected by the risks of malignant cancer: mass unemployment and collapse of consumption.Martin Ford paints a pretty bleak picture, a kind of writing on the wall with a strong focus on problems; he provides some intriguing solutions how we, the society, could cope with the challenges ahead. Both sides, problems and solutions, are not motivating, it is the opposite.Jim Clifton’s ideas in The Coming Jobs War, published in 2011 should be considered on the solution side.At every turn of socio-economic paradigms and fundamental technological changes – cars, airplanes, computer, internet, world-wide web – doomsayers saw more problems than opportunities because the problems were real and the opportunities depended on creativity and entrepreneurship which is difficult to forecast because the future has to be created and cannot be simply proclaimed.This comprehensive customer review corresponds with the importance of this book and should motivate the reader to study it, draw his/her own conclusions and act future-oriented.In the first part of this review I am quoting sensitive and proven facts in USA, UK and Europe described by Ford which require effective and efficient measures to counteract worrying trends:In the US, the symbiotic relationship between increasing productivity and rising wages began to dissolve in the 1970s. As of 2013, a typical production or nonsupervisory worker earned about 13 percent less than in 1973 (after adjusting for inflation), even as productivity rose by 107 percent and the costs of housing, education, and healthcare have soared. Pg. XI.… the US economy needs to create roughly a million jobs per year just to keep up with growth in the size of the workforce. In other words, during those first ten years there were about 10 million jobs that should have been created – but never showed up. Pg. XII.Wages for new university graduates have actually been declining over the past decade, while up to 50 percent of new graduates are forced to take jobs that do not require a degree.Indeed, as I’ll demonstrate in this book, employment for many skilled professionals – including lawyers, journalists, scientists, and pharmacists – is already being significantly eroded by advancing information technology. Pg. XVI.The Parkdale plant employs about 140 people. In 1980, the same level of production would have required more than 2.000 factory workers.The US textile industry was decimated in the 1990s as production moved to low-wage countries, especially China, India, and Mexico. About 1.2 million jobs – more than three-quarters of domestic employment in the textile sector – vanished between 1990 and 2012. Pg. 9.In fact, advancing technology has already had a dramatic impact on Chinese factory jobs; between 1995 and 2002 China lost about 15 percent of its manufacturing workforce, or about16 million jobs. Pg. 11.Figure 2.1 Growth of US Real Hourly Compensation for Production and Nonsupervisory Workers versus Productivity (1948-2011). Productivity +254,3%. Compensation +113,1%. Pg. 36.The Great Recession resulted in a monstrous jobless recovery, it took until May 2014 – a full six and a half years after the start of the downturn – for employment to return to its pre-recession level. Pg. 45.One of the most fundamental ideas woven into Western Capitalism – the belief that anyone can get ahead through hard work and perseverance – really has little basis in statistically reality.Pg. 47.Between the start of the Great Recession in December 2007 and August 2013, about 5 million full-time jobs in the United States were vaporized, but the number of part-time jobs actually increased by 3 million. Pg. 51.A colossal, billion-dollar data center built by Apple, Inc., in the town of Maiden, NC, had created only fifty full-time positions.In 2012, the CEO of Good Data, a SF company that uses cloud services to perform data analysis for about 6.000 clients, noted that before each client company needed at least five people to do this work. That is 30.000 people. I do it with 180. Pg. 109.At the turn of the twenty-first century, Wall Street firms employed nearly 150.000 financial workers in New York City; by 2013 the number was barely more than 100.000 – even as both the volume of transactions and the industry’s profits soared. … Despite rising profits in recent years, banks are making significantly lay-offs with estimates suggesting that by the end of 2015, Lloyds, HSBC, RBS and Barclays will have cut 189.000 jobs between them over a five year period. Pg. 117.An April 2013 analysis … found that at universities in the United States, the number of new graduates with engineering and computer science degrees exceeds the number of graduates who actually find jobs in these fields by 50 percent. Pg. 130.… the decades-long uptrend in consumer spending was powered largely by increased debt taken on by the lower 95 percent of American consumers. Between 1989 and 2007 the ratio of debt to income for this vast majority roughly doubled from just over 80 percent to a peak of nearly 160 percent. Among the wealthiest 5 percent, the same ratio remained relatively constant at around 60 percent.By 2012, the top 5 percent had increased their spending by about 17 percent, after adjusting for inflation. The bottom 95 percent had seen no recovery at all; consumption remained mired at 2008 levels. Pg. 194.As of January 2014, the youth unemployment rates in …, Italy and Spain, were both at catastrophic levels: 42 percent in Italy and a stunning 58 percent in Spain. Pg. 216.In 1998, workers in the US business sector put in a total of 194 billion hours of labor.In 2013, the value of the goods and services produced by American businesses had grown by … $3.5 trillion after adjusting for inflation – a 42 percent increase in output. The total amount of human labor required to accomplish that was … 194 billion hours. … ‘this means that there was ultimately no growth at all in the number of hours worked over this 15-year period, despite the fact that the US population gained over 40 million people during that time, and despite the fact that there were thousands of new businesses established during that time.’ Pg. 281.In the second part of this review you find Ford’s worries which could become reality in a not so distant future. Therefore we, the society, policy and decision makers have to be alerted and prepared to act according to Norbert Wiener’s advice provided in this context already in 1949: “We can be humble and live a good life with the aid of the machines, or we can be arrogant and die.”Ford starts his worries with examples like IBM’s Deep Blue supercomputer winning against the chess champion Kasparov in 1997, IBM’s Smart Machine Watson winning Jeopardy! against two human champions In 2011, Google’s announcement of a self-driving car in in 2012, the big data revolution and a 3D printing hype to describe future risks for any category of the working and consuming population:In the not distant future, radiology will be a job performed almost exclusively by machines. Pg. XV.Entry-level jobs are likely to be heavily affected. Pg. XVI.Beyond the potentially devastating impact of long-term unemployment and underemployment on individual lives and on the fabric of society, there will also be a significant economic price. The virtuous feedback loop between productivity, rising wages, and increasing consumer spending will collapse. Pg. XVII.In a 2012 study, economists … analyzed data from recent US recessions and found that the jobs most likely to permanently disappear are the good middle-class jobs, while the jobs that tend to get created during recoveries are largely concentrated in low-wage sectors like retail, hospitality, and food preparations and, to a lesser extent, in high-skill professions that require extensive training. Pg. 51. My comment (MC): this is in contradiction with Ford’s statement about entry-level jobs on Pg. XVI.A 2013 study … at the University of Oxford concluded that occupations amounting to nearly half of US total employment may be vulnerable to automation within roughly the next two decades. Pg. 61.The question of whether smart machines will someday eclipse the capability of average people to perform much of the work demanded by the economy will be answered by the nature of the technology that arrives in the future – not by lessons gleaned from economic history. Pg. 62.The big data revolution is likely to have two especially important implications for knowledge-based occupations. First, the data captured may, in many cases, lead to direct automation of specific tasks and jobs. Just as a person might study the historical record and then practice completing specific tasks in order to learn a new job, smart algorithms will often succeed using essentially the same approach. Pg. 95. MC: this contradicts Ford’s correct argument on Page 62. Historical record can be a basis for future tasks; however, including improvements and changes require creativity.The second, and probably more significant, impact on knowledge jobs will occur as a result of the way big data changes organizations and the methods by which they are managed. … The predictions that can be extracted from data will increasingly be used to substitute for human qualities such as experience and judgment. As top managers increasingly employ data-driven decision making powered by automated tools, there will be an ever-shrinking need for an extensive human analytic and management infrastructure. …Organizations are likely to flatten. Layers of middle management will evaporate, and many of the jobs now performed by both clerical workers and skilled analysts will simply disappear. Pg. 97.Alan Blinder has conducted a number of surveys aimed at assessing the future impact of offshoring and has estimated that 30-40 million US jobs – positions employing roughly a quarter of the workforce – are potentially offshorable. As he says, ‘We have so far barely seen the tip of the offshoring iceberg, the eventual dimensions of which may be staggering.’OECD estimates that 20 percent of existing jobs in the EU could potentially be offshored. Pg. 120.In 2013, researchers at the University of Oxford’s Martin School conducted a detailed study of over seven hundred job types and came to the conclusion that nearly 50 percent of US jobs will ultimately be susceptible to full machine automation. In February 2015, a parliamentary report to the UK’s House of Lords estimated 35 percent of UK jobs will fall victim to automation within thenext twenty years. Pg. 122.In mid-2013, Chinese authorities acknowledged that only about half of the country’s current crop of university graduates had been able to find jobs, while more than 20 percent of the previous year’s graduates remained unemployed – and those figures are inflated … Pg. 123.The bottom line is that you will find yourself working with, or under the direction of, a smart software system, it’s probably a pretty good bet that – whether you’re aware of it or not – you are also training the software to ultimately replace you. Pg. 126.As Massive Open Online Courses (MOOCs) continue to evolve and improve, the hope that they will drive a global revolution that will bring high-quality education to hundreds of millions of the world’s poor may ultimately be realized. … Assuming that potential employers see MOOCs as offering a valuable credential, this could eventually unleash a dramatic disruption of the entire higher-education sector. Pg. 139.If the MOOC disruption is yet to unfold, it will slam into an industry that brings in nearly L75 B in annual revenue for the UK and employs 750.000 people. Pg. 144.… much of what pharmacists do is almost ideally suited to automation. Pg. 160.The fact that both pharmacy and law are also impacted by direct automation makes things even more unsustainable. My prediction for the next professional school bubble: MBA degrees. Pg. 167.… two specific technologies that have the potential to loom large in the future: 3D printing and autonomous cars. Pg. 170.The true driverless vehicle has the potential to completely upend the way we think about and interact with cars. It could vaporize millions of solid middle-class jobs and destroy untold thousands of businesses around the world. Pg. 185.As jobs evaporate, median incomes stagnate, or perhaps fall, we run the risk that a large and growing fraction of our population will no longer have sufficient discretionary income to continue propelling vibrant demand for the products and services that the economy produces. Pg. 186.The essential point is that a worker is also a consumer (and may support other consumers). These people drive final demand. When a worker is replaced by a machine, that machine does not go out and consume. Pg. 191.As the top tier comes under increasing pressure from technology, there are few reasons to expect that the prospects for the bottom 95% of households will improve significantly. Robotics and self-service technology in the service sector will continue to make inroads, holding down wages and leaving relatively unskilled workers with fewer options. Automated vehicles or construction-scale 3D printers may eventually destroy millions of jobs. Many of these workers may experience downward mobility; some will likely choose to leave the labor force entirely. Pg. 209.While the argument I’m making here is theoretical, there is statistical evidence to support the contention that inequality can be harmful to economic growth. In April 2011, economists Berg and Ostry of the IMF studied a variety of advanced and emerging economies and came to the conclusion that income inequality is a vital factor affecting the sustainability of economic growth. … The economists found that higher inequality was strongly correlated with shorter periods of economic growth. A 10% decrease in inequality was associated with growth spells that lasted 50% longer. Pg. 210.In a perverse process of creative destruction, the mass-market industries that currently power our economy would be replaced by new industries producing high-value products and services geared exclusively toward a super-wealthy elite. The vast majority of humanity would effectively be disenfranchised. Economic mobility would become nonexistent. The plutocracy would shut itself away in gated communities or in elite cities, perhaps guarded by autonomous military robots and drones. We would see a return to something like the feudal system that prevailed during the Middle Ages. Pg. 214.I exclude Chapter 9 “Super-Intelligence and the Singularity” from further review.It deals with human-level, rather than merely narrow, Artificial Intelligence – within the field referred to as Artificial General Intelligence (AGI).James Barrat asked two hundred computer scientists to select from four different predictions for when AGI would be achieved. Results:42% believed a thinking machine would arrive by 2030. 25% said by 2050.20% thought it would happen by 2100. 02% believed it would never happen. Pg. 227.Ford: Nonetheless, the ultimate realization of molecular assembly would mean the end of manufacturing industry as we understand it; it would also likely bring about the demise of entire sectors of the economy focused on areas like retail, distribution, and waste management. The global impact on employment would be staggering. Pg. 242.Molecular assembly, if it were weaponized by an authoritarian regime, might bring about a world order very different from utopia. Pg. 243.MC: following Ford’s thoughts totalitarian dystopia would become reality.Ford closes chapter 9 with the following statement:long before such genuinely advanced technologies become practical, more specialized forms of AI and robotics are likely to threaten vast numbers of jobs at a variety of skill levels. Pg. 245.Conclusion:The greatest risk is that we could face a “perfect storm” – a situation where technological unemployment and environmental impact unfold roughly in parallel and perhaps even amplifying each other. Pg. 284. My comment: in that case another financial crisis would not be far away.The third part of this review summarizes Ford’s ideas how to cope with massive problems of mass unemployment driven by technology:Professional economists – all of whom have access to the same objective data – are completely unable to agree on what I would characterize as an extraordinarily fundamental economic question: is a demand shortfall holding back economic growth, and if so, is income inequality an important contributor to the problem? I suspect that the lack of consensus on this question offers a pretty good preview of what we can expect from the economics profession as the technological disruption I’ve been describing in these pages unfolds. …in the field of economics the opinions all too often break cleanly along predefined political lines. Knowing the ideological predisposition of a particular economist is often a better predictor of what that individual is likely to say than anything contained in the data under examination. In other words, if you’re waiting for the economists to deliver some sort of definitive verdict on the impact that advancing technology is having on the economy, you may have a very long wait.Beyond the ideological divide in economics, yet another potential problem is the extreme quantification in the field. In the decades since World War II, economics has become extraordinarily mathematical and data-driven. … there is obviously no economic data streaming in from the future. Any quantitative, data-driven analysis necessarily depends entirely on information gathered in the past, and in some cases, that data may have been collected years or even decades ago. Pg. 199.Ford quotes John Maynard Keynes in The General Theory of EMI, 1936: “Too large a proportion of recent “mathematical” economics are merely concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.” Pg. 200.The Case for a Basic Income Guarantee is far from a new idea.While a basic income has been embraced by economists and intellectuals on both sides of the political spectrum, the idea has been advocated especially forcefully by conservatives and libertarians.Friedrich Hayek, who has become an iconic figure among today’s conservatives, was a strong proponent of the idea. In his three-volume work Law, Legislation and Liberty, published between 1973 and 1979, Hayek suggested that a guaranteed income would be a legitimate government policy designed to provide insurance against adversity, and that the need for this type of safety net is the direct result of the transition to a more open and mobile society where many individuals can no longer rely on tradition support systems. Pg. 256.I think that viewing markets – or the entire economy – as a resource also works well from another perspective. Recall that in Chapter 3, I argued that the technologies poised to transform the job market result from a cumulative effort that has spanned generations and has involved countless individuals, and has often been funded by taxpayers. To some extent, you can make a reasonable argument that all these accumulated advances – as well as the economic and political institutions that enable a vibrant market economy – are really resource that belongs to all citizens. A term often used in place of “guaranteed income” is “citizen dividend”, which I think effectively captures the argument that everyone should have at least a minimal claim on a nation’s overall prosperity. Pg. 265.A guaranteed income would offer an economic cushion for all types of entrepreneurial activity, from the person starting an online business, to the restaurateur, to the small farmer facing a drought. In many cases, it might be enough to get small business through difficult periods that would otherwise bring about their failure. Pg. 266While our value system is geared toward celebrating production, it’s important to keep in mind that consumption is also an essential economic function. Pg. 268.The most feasible approach might be to use a variety of different taxes to raise the necessary revenue. One obvious option would be to reform environmental taxes, ensuring businesses pay more for their carbon emission.There are numerous other possibilities, including higher corporate taxes or the elimination of a tax avoidance schemes. National land tax, higher capital gains taxes, and a financial transaction tax. It seems inevitable that personal income taxes would also have to increase, one of the best ways is to make the system more progressive. Pg. 271.One of the most common proposals is to focus on wealth, rather than income. In a future world where nearly all the income is captured by capital, and human labor is worth very little, why not simply make sure that everyone owns enough capital to be economically secure? Pg. 272.I’m skeptical that policies geared toward more education and vocational training will offer a long-term, systemic solution to the problem of technological unemployment, there are certainly many things we can and should be doing to improve the more immediate prospects for students and workers. Pg. 275.If you accept the argument that Western economies are likely to become ever less labor-intensive over time, then it follows logically that we ought to shift our taxation schemes away from labor and toward capital. Pg. 276.If we can fully leverage advancing technology as a solution – while recognizing and adapting to its implications for employment and the distribution of income – then the outcome is likely to be far more optimistic. Negotiating a path through these entangled forces and crafting a future that offers broad-based security and prosperity may prove to be the greatest challenge for our time. Pg. 285.

n his book, Martin Ford gives compelling arguments to be aware of the negative effects of increase automation and recourse to AI in many aspects of our lives. I was stunned that already in 2009, sports articles were written using a specialised software and published under the “pen” of fictitious journalists (see beginning of Chap. 4). He gives some positive effects but there are only few especially in health care. This covers the first seven chapters of the book and they are excellent. I gave 4 stars for the review because the author gives possible scenarios and means to mitigate or adapt to what appear to an increasing wave of automation and usage of AI in our lives. These, I am afraid are going to be difficult to implement. Overall, Martin Ford has written a very important book that help us understand better the world now and what is coming. I highly recommend it.

It's a great book, because explain questions that everyone ask itself when we're talking about technology and artificial intelligence, does the machines could replace me at work? Or we’ll be conquest by them? It has been done with multiple cases and examples and that makes an easier way to read it, explaining even the technicalities terms that the author uses. It has problematic subjects like the unemployment that will be generate when machines replace humans in some jobs or the impact in the economy that this will generate. Also the author gives some solutions for these topics, but not for everyone.This book is structured in different points of view like the economic, the social, the politics or the education one. And this allows a bigger idea of the consequences that will bring, and give us a strategy to solve it.It also states that humans must improve as a species, since machines will not replace us, they will only do the most repetitive tasks we have, but this should give us the opportunity to grow intellectually speaking.In short it is a great book that anyone should read because it raises many possible scenarios and allows us to dazzle what could be the near future, where the machines will live with us in a common way, something that will happen sooner or later and that we must adapt To that change, and leaving the technology aside is not an option these days.