Consultancy firm Price Waterhouse & Coopers recently published a report that suggested that 38% of US jobs will be performed by robots by 2030. The rates are even higher in the transportation and storage (56%) and manufacturing (46%). The continually aggressive growth trend in processing power fuels disciplines such as computer vision and artificial intelligence which, in turn, fuel the increased use of robots in every aspect of life.
Intel believes that by 2026, a processor will have as many transistors as there are neurons in the human brain. A fourth-generation Intel processor already has 7.2 billion transistors and runs at speeds faster than 3,000,000,000 Hz. In comparison, the human brain has 100 billion neurons, but runs only at 1,000 Hz. By 2026, a processor will have as many transistors as we do neurons, but will run at least 3 million times faster.
Self-driving cars were not possible a decade ago, yet every major car (or technology) manufacturer jumped on this bandwagon as soon as it was. At the Paris air-show last month, Boeing announced it will experiment with self-flying commercial jets next year.
Uber will replace its drivers with robots, and most likely so will the shipping companies, such as UPS and FedEx.
Robots can perform the job more accurately, more consistently, more efficiently, and faster. Oh, and they don't bring their emotions to work...
Where does this leave us?
In 1997, I flew over to one of the largest telecom provider in Southeast Asia. In my briefcase I carried a product I designed, which would allow placing international phone calls from regular phones at the price of a local call to your Internet Service Provider. The technology later became known as VoIP. I will never forget what one of the senior managers told me:
"This would create low prices, and will cannibalize our main business."
My answer to him was simple:
"This will cannibalize your revenue, I agree. The only question is--would you like to cannibalize your business, or would you like someone else to do it to you?"
Your first instinct when something threaten your livelihood is to fight against it. But fighting against robots is fighting against progress. Besides, once they do have the brain capacity of the human mind, running 3 million times faster--I'm not sure I would want to piss them off...
One positive conclusion from the PwC report is that some of the salaries will actually increase due to productivity improvements through the use of robots. However, while this might be true, there will likely be fewer jobs overall. No more drivers, pilots, production-line workers, and other, more routine jobs. We will probably not have soldiers anymore.
The jobs that will remain are likely be those requiring creativity, non-linear thinking, as well as lifestyle jobs (such as physical therapists. Thank god my older daughter decided to study physical therapy...)
A new business model?
When you hear the word innovation you typically think of new products. However, innovation can come in the form of new services, new processes, and yes--new business models. Dell, Amazon, eBay, and Uber are only a few examples of disruptive business model innovation.
I have to admit that the idea for this following business model came to me when I was speaking with a friend. He owns multiple rental properties. Most are residential, but some are commercial. In fact, he is in the process of converting as many of his properties from residential to commercial.
Many companies prefer to rent rather than own their buildings. They don't need as much investment to get started if they rent their facilities. Why wouldn't the same apply to robots?
I believe that in the future, a disruptive business model will be robot ownership and rental. Unless you have one of those sophisticated jobs that could not be replaced by robots (yet), and even if you do--you could make money by buying robots and leasing them to companies, enjoying the "salary" that your robot makes as your return on investment.
Replacing 100 employees with 50 robots to get the same productivity sounds great. You save 100 salaries. However, buying those 50 robots could be prohibitive. What if you could rent those robots? Pay their owners a salary? You would not have to lay out significant cash, and I will make my salary by letting you use my robot. I will not have to go to the office. And I will be more likely to need a physical therapist...
Think about it.