Originally published in The Spinoff
The robots are coming to take our jobs – so what should we be doing for work (and our workers) when they arrive? Rod Snodgrass, director of The Exponential Agency, says it’s time for New Zealand business to start preparing for the digital future.
I read a brilliant Guardian article recently that pondered life after the robots arrive to take all of our jobs and the potential emergence of what the author describes as “the useless class”. It’s confronting stuff but also a real possibility and something worth pondering in a New Zealand context.
Sci-fi and nerd wonders aside, it got me thinking – is New Zealand and particularly corporate New Zealand, and I guess the wider education sector, doing enough to prepare for the inevitable day when more and more of our employee’s jobs and livelihoods are ripped away by cold, metallic hands in the guise of intelligent machines and virtual assistants?
It’s not an idle thought. The technology is already here, as anyone who has seen the frankly gob-smacking work being done in the artificial intelligence space by the likes of New Zealander Mark Sagar and his company Soul Machines, whose hyper-realistic chatbots are being used by the likes of the Australian government, as this video explains.
We can already access AI driven assistants today and one of my colleagues at The Exponential Agency already uses one as his assistant that pesters me for meetings in a seemingly very human, but also very relentless way. The age of exponential disruption is rapidly moving into the intelligent machine phase that John and Sarah Connor warned us about.
Across New Zealand, incumbent professional service industries (for convenience sake let’s call them banks, telcos, energy companies, government departments and insurance companies) are grappling with these forces. In virtually every single industry a technology-led wave of digital disintermediation, often spearheaded by competition from largely faceless (and tax-less) global digital behemoths, is breaking over their heads. In the digital advertising industry that wave has already swept most of the local competition far out to sea. The retail sector in the US has already been smashed by the horseman of the digital apocalypse that is Amazon – as shown on this remarkable US retail chart – and one wonders just how this will play out as Amazon enters Australia and potentially New Zealand soon.
Regardless, to date the outcome has, by and large, been fantastic for New Zealand customers – in most cases we now get more products and services for less cost every year (or in the case of news media, we now get everything for nothing). Hallelujah I hear you cry. Bring it on. Give me a Netflix for my TV entertainment needs, Spotify for endless music on the go, or an Uber for my transport needs or an AirBnB for my state housing needs. The list goes on and yes indeed I use most of those services.
So what does that mean for big New Zealand companies? When the competition gets tough, the tough have to get going. Otherwise, by definition, they go backwards. The rational response from many will be to go harder on costs to meet customer demand, and to move at varying speeds and appetite towards things like artificial intelligence and digital self-service in order to deliver more for less and compete with their digital foes. Generally though, they apply digital thinking and execution to analogue business models. They end up improving but not transforming at the pace they need to in order to meet the external forces at work. Very few are re-imagining (if that is a real word) their business models in the way global digital disruptors are.
Or, at the same time some can simply choose to bow down to the inevitable and cede a little more of our economic sovereignty to international corporate giants worth more than the entire New Zealand housing stock – and larger than most countries’ economies.
So far, so many crocodile tears. But what does this mean for the employees (and their families) of those New Zealand companies? Expect words like ‘cost-cutting’, and ‘digitisation, and ‘automation’ to become more commonplace in our country over the next few years as the software robots start arriving in bigger numbers and competition pressures force companies to embrace their use.
No matter how you dress it up, it means many big New Zealand corporations will have little choice but to shed a significant number of jobs for highly skilled and well qualified people over the next few years. That’s a massive problem for our country, it’s a problem recognised by many people including Government think-tanks and it’s a problem that needs to be at least partially solved by those industries under the gun. A national problem needs a coordinated approach to solve. And as we’ve seen with the housing crisis, a national problem can get away from us if nothing gets done.
While it’s true New Zealand has a healthy and growing tech sector, it’s also true that smart young NZ companies emerging from the tech sector don’t always enjoy access to venture capital and R&D capability at the point they need it most. How many times have we seen a great young NZ business go offshore for expansion capital? Xero? Rocket Lab? Many New Zealand corporates invest in social causes, often through foundations or trusts. It’s a way of giving back as well as maintaining their ‘license to operate’. But not many invest specifically in future opportunities for their workers. I’d argue strongly that more investment can and should be made in this area. In short, we need more investment in what some call “big I” and also in educating and re-educating our people so they can survive and thrive in this quickly emerging new future.
One of the biggest gaps in our venture capital space is investment from New Zealand corporates. By global standards, our corporate R&D investment is woeful. Could the inevitable wounds that are going to be delivered to New Zealand corporates by the robots be healed by those same businesses investing in young New Zealand start-ups and talent? As well as investing in great business opportunities, those corporates could be laying the groundwork for future opportunities for their displaced workers, and keeping their skills within the New Zealand economy.
The reality is, as all incumbent industries move more towards an automated future we will need more emerging New Zealand businesses to hire the skilled people bumped out of the way by robots. Most New Zealand corporates now have digital disruption on their board agenda. Some have even hired ‘chief transformation officers’ and “Chief Digital Officers” to help them surf the wave. But very few of them are actively investing in the new companies that will provide the future opportunities needed.
That’s got to change. I don’t know about you, but investing in our own future feels like an elegant way to best welcome our new robot overlords to our shores.