Horse Warning


Here’s a warning direct from the horses mouth.

farm

Our horses, Lucy (the Appaloosa ) and Harriet.

If you believe in karma and have been really good, you might get to come back as one of our horses!

Their jobs are to do whatever they desire (except get past the fences – which they do anyway once in awhile).  Fortunately what they want to do most of the time is eat grass.

I’m good with that.

Our horses don’t work at all, but even horses that do work are not much involved in the modern economic world.   This fact can provide us with a warning about where our way of life, and how we earn, might be headed.

That’s why I urge you to read a horse’s warning in the article “Where is technology taking the economy?” (1) written by W. Brian Arthur and published in the McKinsey Quarterly this month (October 2017).

McKinsey & Company is a worldwide management consulting firm.  According to The New York Times, it is considered the most prestigious management consultancy in the world. McKinsey funds the McKinsey Global Institute that has published the McKinsey Quarterly since 1964 and publishes reports on management topics, and has authored many influential books on management.

There are a few books, speeches and articles that I come across that alter the direction of my thinking, my strategies, my plans for years ahead.

I believe “Where is technology taking the economy?” is one of them.  I have read it three times already.

I’ll read it many times again.

The point that first grabbed my attention was about horses.

The article explains that  a new virtual economy is forming of “interconnected machines, software, and processes emerges, where physical actions can be executed digitally”.   The workforce is computers using “cheap and ubiquitous sensors”.

These sensors allow computers to do what we thought only humans could do—association.   This associative intelligence creates “the ability to make appropriate associations, or in an action domain to sense a situation and act appropriately.”  There doesn’t need to be a human controller at the center of such intelligence; appropriate action can emerge as the property of the whole system.  Whether retail banking, transport, healthcare, or the military, is that industries aren’t just becoming automated with machines replacing humans. They are using the new intelligent building blocks to re-architect the way they do things.

Everyone agrees that  jobs are vanishing.  The question  they argue over whether these will be replaced by new jobs.

Economic history tells us they will. The automobile may have wiped out blacksmiths, but it created new jobs in car manufacturing and highway construction. Freed labor resources, history tells us, always find a replacement outlet and the digital economy will not be different.

But consider this warning, straight from the horse’s mouth.

Erik Brynjolfsson and Andrew McAfee of the Massachusetts Institute of Technology point out that when automotive transport arrived, a whole group of workers—horses—were displaced,  never to be employed again.  They lost their jobs and vanished from the economy.

I would add another historical precedent. Offshoring in the last few decades has eaten up physical jobs and whole industries, jobs that were not replaced. The current transfer of jobs from the physical to the virtual economy is a different sort of offshoring, not to a foreign country but to a virtual one.  If we follow recent history we can’t assume these jobs will be replaced either.

There is a link to the report “Where is technology taking the economy?”

It’s long.

It’s a hard read.

It takes time.

You should read it anyhow.

Gary

(1) www.mckinsey.com:  Where is technology taking the economy

 

 


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