Transport Industry

Self Driving Electric Cars will happily work 24/7, every day of the year with no breaks, holidays, sick days, lateness, distractions, tiredness, hangovers, complaints, strikes, wage rises, overtime pay, training or retraining, compensation, severance pay, contract negotiations, bonuses, maternity leave, require pensions and only demand a ‘salary’ equal to the cost of energy. They will be reliable, constantly alert and behave rationally without emotion eliminating human error and bias thus reducing risk of crashes meaning fewer law suits or insurance costs. They won’t procrastinate, talk back or unionise and they they won’t commit occupational fraud or harassment to customers.

Vehicles transporting goods wouldn’t need heat or air conditioning for the driver, saving on energy. Vehicles in general will have more free space for extra stock or passengers as driver space is not required. The car is becoming a computer technology, it can be easily improved with new software updates, the on-board computers and sensors will continually become cheaper, more powerful, more energy efficient allowing a much safer and cheaper transportation experience, increasing the rate of adoption over time.

The general public may be slow to adopt but businesses and startups will utilise autonomous vehicles instantly as they will see the potential to out-compete rivals and increase profits by being able to deliver items and people safely at much lower costs. The robot capital may be expensive at first but should eventually pay off if the cost of employing a human is higher than a machine or software bot, over time. Uber is already experimenting transporting goods to people with Cornerstore, a delivery service to compete with Amazon and Google Express. With Uber’s almost $50bn valuation stockholders will be expecting Uber to grow so it will have to enter every sector of the transport industry, it will aim to revolutionise the transportation of everything, not just people, and with it’s $10bn funding Uber has the resources to create the fleets of self driving cars needed to do so.

Uber recently poached 40 of the best scientific minds working at Carnegie Mellon’s National Robotics Engineering Center. If Tesla can build a fully-autonomous car by 2020, Uber CEO Travis Kalanick says his company would buy it. In fact, he’d buy every one Tesla builds. Nearly every car manufacture, Google, Uber and Apple are all working on driverless cars. As of CES 2015, predictions for an on-sale self-driving car are on the order of two to five years away, or 2017 to 2020. People see this and think about taxi drivers or truck drivers being disrupted but one major occupation is often neglected, which is retail staff which I will discuss. The 4 possible scenario’s below will show how self driving cars and a few other new technological innovations can disrupt physical retail sales.

Scenario 1: Buying a Smartphone

Let’s say you want to order a smartphone but you only want it delivered when you are at home in the evening or on a Sunday. Currently it’s difficult for delivery firms to find drivers to work these hours or days and it may be also difficult for the warehouse to get workers to pick the items and stock them into trucks at those inconvenient, unsociable hours too. Both of these tasks, delivering and picking objects, will soon become fully automated, the machines will happily work day and night, allowing packages to be delivered on demand when it’s convenient for the customer.

You may have already seen these Amazon Kiva robots which currently move shelves around to speed up the process of locating and packaging an item.

Amazon is now working on automating the next step in getting various items from shelves using robots pickers for its fulfilment warehouses.

This is currently very slow but it will quickly improve in performance as computing power, vision and AI algorithms, sensors and gripper technology improve. An example of how fast a speed up with better technology is Rethink Robotics Baxter Robot.

The Baxter robot then places the item into the self driving bespoke van which can be customised to use a locker system or vending machine mechanism to dispense goods.

So in this scenario a smartphone is ordered to be delivered at 8pm on Sunday, a Kiva robot delivers the shelf to a robot picker which grabs the item and puts it on an automated conveyor belt where its gets packaged by a Baxter robot and then placed into a self driving “vending machine” van. The custom delivery van autonomously drives to outside your front door. You receive a notification and pin code that it’s arrived and go out to the car, you enter the pin code or some other form of self service authentication on the van and your parcel appears for you to collect. All with minimal, if no, human involvement.

Scenario 2: Ordering Clothes

Phones are starting to get 3D scanning abilities and in the future will have 3D cameras built in as the sensors become so cheap. Someone will create an app where you can 3D “selfie” scan yourself, this could get the precise measurements of your body or create a 3D model which you can dress up.

You could virtually try on clothes by easily and quickly swiping through a websites clothing section, to see what you look good in, advanced computer algorithms could even suggest what you clothes would suit you or go well together. No lengthy queues for changing rooms or hassle removing and putting on clothes repeatedly, or taking things back because they don’t fit, just faster, more convenient clothes shopping.

Microsoft Hololens, Google Glasses 2.0 and other augmented reality tech will become cheaper, better and more prominent. They will transform your physical world, when looking in a mirror you could see different clothing on you. The same could be done for furniture in the home, wallpaper, appliances or the vast amounts of items where you are apprehensive about will it fit or look right, in the future you will be able to virtually see an item in the physical world before you buy it.

An automated warehouse doesn’t need prime location retail estate so has less rent. With less humans working inside then it can be lit up less, heated or cooled less so cheaper bills and reduced need for toilet or staffroom facilities which take up space so more room for stock. In a structured warehouse, stock doesn’t need to be displayed for customers so can be stored efficiently, it doesn’t need to constantly move from backroom to front of store, staff are not needed to face up items and other cost’s to maintain a storefront are not necessary in a warehouse. It doesn’t have to spend money on aesthetic or comfort features for humans. A warehouse can store goods in the most efficient way.

Within 20 years robots will be capable of stacking the warehouse shelves with the items that are delivered from manufacturers automatically.

Online items tend to already be cheaper and the trend may increase as the cost savings mentioned above will allow the online store to undercut the brick and mortar store in sale prices of items. Higher convenience for customers, better tech to try and look at goods before you buy and cheaper items will increase online sales. The high street will be at your front door, no travelling to shops, having to find the item, avoid people, queue, carry it back home and other inconveniences. Most goods are cheaper online, the only thing holding online shopping back today is the long wait for goods and inconvenient delivery times which looks to be eliminated soon. Brick and mortar will have stiff competition with this level of convenience as the virtual shop becomes far superior to the physical shopping experience.

Amazon CEO Jeff Bezos, whose personal wealth makes him the fifth richest person in the world with a net worth of $50 billion has plans to grow Amazon even more. “In its Q2 earnings this week Amazon’s value pushed north of $250 billion — some $20 billion more than Walmart. Don't expect Bezos to be content to stop there though. Amazon’s vast vision really is about flipping commerce on its head, and bringing the fruit market, the high street and the changing room — the whole kit and caboodle — into the living room.” -TechCrunch

Scenario 3: Ordering Tools

Many retail stores may suffer from disruption due to 3D printing. This example uses a DIY retail store. Let’s say you don’t have a wrench, missing an ikea screw or trying to DIY fix your sink. You can get remote help using to diagnose the problem, if you are missing tools to fix your sink then a home 3D printer will allow you to print the correct size valve, pipe or spanner.

The performance of 3D manufacturing is improving. The prices (for both printers and materials) are declining. 3D printers allow you to print many other materials other than plastic, they can print metal, wood, ceramic, carbon fiber, graphene, clothing, food, glass, optics for use in lenses and even electronics. 3D printers are continually getting cheaper and faster.

Now this example assumes people have 3D printers in the home, which may take a while for majority of consumers to adopt, 3D Home Printing is expected to double every year, from almost 62,000 in 2013 to nearly 2.5 million in 2018.People will be buying(or “acquiring”, if the music and film industry is anything to go by) product designs and be printing them at their own home cheaply and repeatedly, causing even more disruption to retail.

But like the self driving cars, it will be companies which adopt and utilise new technology first. Amazon could buy industry 3D printers and become a manufacturer, they already have a patent to 3D print items inside trucks. They could merge advanced industry 3D printers with self driving cars, we could have fully automated, mobile, manufacturing in the not too distant future. In this scenario when running out of an item, say a wrench, Amazon could use it’s own 3D printers to create more. Another company could have 3D printers available for public use, you send your custom design in, it gets printed in the nearest facility and delivered to you.

Scenario 4: Ordering Groceries

It’s 5pm, you just got home from work and need to start cooking a meal but you realise you are missing some ingredients, currently you would have to nip to the shops to carry on but maybe you don’t have time or just don’t want to travel to them.

The ice cream van can now become automated and other products could start to be sold in a similar model as running costs become cheaper. Picture self driving mobile vending machines as described earlier, driving around stocked full of the most common bought goods. Nipping to the shop for some bread, milk, beer etc. could become a thing of the past as corner shops become mobile.

If the mobile convenience store doesn't have the item then it could get to you from the warehouse. Self driving cars and automated warehouses will deliver items to you within the hour (e.g. Amazon Prime Now), much cheaper than today because a driver and warehouse staff wages won't be needed.

But maybe 1 hour is not fast enough for you, luckily you will soon be able to get ordered items incredibly quickly by flying to your location. Amazon are aiming to use drones to get items to you in less than 30 mins and they may be available within the year.

The internet of things will allow you to have a smart fridge which could have cheap camera sensors to recognise bar codes or objects without barcodes such as fruit or veg. Once the smart fridge knows it’s contents, it will know when it’s running short and will ask you if it should order more. Like an advanced version of Google Now or Siri, the smart fridge will learn about your tastes over time, it will know what ingredients and food you like and will scour different online stores and notify you off deals. The weekly huge food shopping experience may become a thing of the past as smart AI develops the perfect shopping list tailored for you and automatically orders it for you.

Another way technology may change shopping habits is items like Amazon Echo where you can order just by speaking and it will pick it up, “aww I’m out of eggs” can turn into “Alexa, order some eggs” and they will be with you within 30 mins by use of a drone.

You can already order things on demand with smartphones and now smart watches, you are now always connected to online digital stores. More use of the internet of things such as Amazon Dash, will allow you to rapidly order common items when are you running out.

The next generation of smart watches will improve their bio-sensors and gain better health data like Apple Health is currently. They will track your body vitals and suggest meal plans to improve it such as preventing vitamin deficiencies or reducing salt/fat intake. Meal plans can be automatically ordered for you, improving your health and saving you time having to shop and count calories and check nutrition, know your preferred tastes so you can stop worrying about if what you buy is healthy. All these features will make online ordering more streamlined and natural. Why make the trip to the mall, spend gas, use up your free time, where in the time it would take you to get back from the mall the item could already be with you and cheaper if you just stayed at home and ordered it online?

Retail vs Online Shopping

Online sales has been steadily increasing, it is now at about 7% in 2015. This figure is already expected to steadily increase but with the scenario’s explained above it could sharply rise and impact retail sales and the jobs that go with it.

Other technology could disrupt retail jobs. As shown in the Amazon picking challenge, how long until the reverse is possible and robots can stack shelves or face up isles? Dexterity will improve, prices will go down, speed will increase, possibly impacting the need for as many human shelf stackers within the next 20 years, bearing in mind the exponential rate of computer power which drives improving computer vision AI.

We have already become familiar with self service tills in grocery stores but these are set to increase and enter general retail, substantially reducing the need for as many checkout staff. RBR, a London-based strategic research and consulting firm, reported the global self-checkout market grew by almost 25% in 2013. The global installed base of self-checkout terminals will rise from 191,000 in 2013 to reach nearly 325,000 by 2019.

Soon shops won’t even have to buy as many costly self checkout machines. Grocer Asda recently launched a smartphone scan-and go-trial at its superstore in York which will allow customers to scan basket items via its app and pay at any till without unloading their trolley. In the future a person will be able to walk into a shop, grab an item, scan it with their Apple watch which is connected to Apple Pay and walk out the store with it, eliminating queuing time and offering maximum convenience for the customer, and for the company.

Customer service robots or AI apps can be used to provide assistance.The OSHbot will greet customers, ask if they need help and guide them through the store to the product.The head features a 3-D scanner to help customers identify items. OSHbot speaks English and Spanish, but other languages will be added.

Cleaning robots may be with us within 20 years, making retail staff more productive, requiring less of them to be needed in the shop at one time.

And finally the manager/supervisor could be disrupted by an advanced Siri or IBM’s Watson, connected to internet of things in a modernised shop 2.0 which is constantly getting sensor data from everything and using a super smart AI to understand it all. It will have advanced vision and computing power to understand scenes like messy isles, unkempt displays and be able to automatically delegate tasks to employees(or robots) to fix the problems it sees. It can use machine learning on customers visits and patterns each day to create rota’s, order new stock, info to assigning tasks, performing accounting.

Similar to how Amazon in walking picker roles used to be tracked and told where to go to or to speed up by a computer, an AI system could be used in a shop where employees are hooked up to a headset with Siri or some other software bot bossing them around. “You are needed on till, vegetable dates need to be checked, clean the floor, face up isle, customer looks lost, go assist them…etc” A super efficient shop would need less staff if everything is optimised and by using big data the AI can learn the correct number of staff for different days pr times and email employees on zero hour contracts to come into work, only when they are needed.

Uber has turned taxi employees into independent contractors and refuses to treat them as “employees” so it doesn't have to pay minimum wage, Obamacare health insurance, unemployment insurance, no guarantee of stability, worker’s compensation, pensions and so on. This kind of employment could infect many other occupations as companies look to cut cost to compete with increasing online sales. If a freelancing app is created for retail, the staff that remain will face less employment benefits, less full time employment opportunities and more competition for their roles which could go to the lowest bidder, pushing down wages.

A 2013 report estimates that roughly a third of the US workforce, more than 40 million, consists of temps, part-timers, contractors, contingent workers, freelancers/independent workers and those who are under-employed or work without employer-sponsored health insurance, 401Ks or FLEX accounts” according to a report by the Harvard Business Review. By 2020, 40 percent of the US workforce will consist of freelancers according to a study by Intuit. A study by Deloitte found Canadian organizations are reaching out to the “open talent economy.” 47% of Canadian respondents plan to increase their use of contingent, outsourced, contract or part-time workers in the next three to five years. 80% view workforce capability as an important trend — and 53% see it as a long-term priority for their organization.”

“Traditional employment will no longer be the norm. replaced by contingent workers such as freelancers and part-time workers. The long-term trend of hiring contingent workers will continue to accelerate with more than 80% percent of large corporations planning to substantially increase their use of a flexible workforce.”

This modernisation process is inevitable because company shareholders will look at ways to maximise profits and out compete rival businesses, any opportunity to get an advantage will be capitalised upon. It is in the interest of every company to employ a minimum number of workers, pay them a minimum salary and have the highest productivity. Companies which don’t adapt and stay relevant and persevere with the old way will be left behind. Just like Kodak or Blockbuster, no company wants to make those same mistakes and remain stagnant and let other businesses pounce on the new models and technology and let their customers choose other better cheaper and more convenient services. The pressure and competition from online stores will push physical retailers to make these cost cutting decisions, especially with minimum wage increases. They adapt or face obsolescence.

Conclusion: Disruption

With all this new information about the potential disruption retail staff face it is quite startling when you find out what the two most popular US occupations are. This chart below of the occupations with the largest employment in 2012.

The 2 most popular are #1 retail salespeople and #2 cashiers with almost 8m jobs, #15 also has 1.6m jobs. Retail workers have a median age of 38 in 2011, Retail are not jobs which only employ teenagers as many falsely believe. They are not stepping stone jobs that people do until they find something better. These are the most popular jobs in the country, vast amounts of people and families rely on these jobs. As shown the typical education is less than a high school degree. The automated warehouse and delivery system will disrupt jobs #10, #12 and #14, a total of ~5.7m jobs. Again #10 and #12 employees typically have less than a high school diploma. If there is even a small percentage of jobs cut this can cause a big disruption effect for many people within a very short time frame.

What happens when low level routine knowledge work starts to be automated and software bots are capable of performing many office roles which is #3 and #8? As mentioned in the advanced AI boss example in a shop, in 20 years with the internet of things and powerful computers processing, understanding and optimising, could #11 face disruption? Mihir Shukla is CEO of Automation Anywhere — “Take the example of invoice processing. In a week or two a software bot will learn how to process those invoices at your company and begin doing it by itself. In that sense it behaves like a robot, but is software. In the next 5–7 years we will have ten million of these in the market. So this is a huge wave, and it will transform the very basic definition of how we work and at what efficiency. It will transform what productivity means. Software is already defining the workforce today and that will certainly accelerate.”

Robots and AI will dominate legal practice within 15 years, perhaps leading to the “structural collapse” of law firms, a report predicting the shape of the legal market has envisaged. McKinsey Global Institute found that there were 230+ million knowledge workers in 2012 which accounts for 9% of the global workforce and 27% of global employment costs. They predict a $5–7 trillion potential economic impact by 2025 of automation of knowledge work. “Over the next 10 years, the work of 110 million to 140 million knowledge workers around the globe may be handled by cognitive robotic process automation systems. his shift to robotic process automation — which digitizes labor through the use of advanced machine intelligence, engagement, analytics, big data, social media, mobile technologies and cloud computing — will change the knowledge worker labor market as we know it.”

The food service jobs #4 and #7 are at high risk of disruption. By using computer tablets at tables, a report found, restaurant owners can reduce the labor time of servers by 30 to 40 percent. For example, the report found that using tabletop tablets at an average mid-scale, casual dining restaurant chain, could double the maximum number of tables that a server could handle at a time from four to eight. This means the number of servers would drop from seven per shift to only five per shift — saving $30,500 in payroll costs.

A startup which plans to release a robot with human like hands in 2018 for cooking meals. the company plans to build a digital library of 2,000 recipes before the kitchen is available to the wider public. Moley Robotics ambitiously aims to begin selling them as early as 2017. The robotic chef, complete with a purpose-built kitchen, including an oven, hob, dishwasher and sink, will cost £10,000 (around $15,000). Moley is working on improving the cooking robot’s functions and expanding its capabilities.

There is a 94% probability of accountants and auditors plus a 98% chance of bookkeepers all being automated within 20 years according to a study at Oxford by Carl Frey and Michael Osborne. Those roles were #13 on the chart. The study found nearly half of U.S. jobs could be susceptible to computerization over the next two decades. An analysis from the Committee of Economic Development of Australia warns more than five million jobs, almost 40% of jobs, could disappear in the next 10 to 15 years because of technological advancements. There's already evidence of our failed creativity to create new jobs for people in the present day employment statistics. The labor-participation rate in June was 62.6% which is the lowest since October of 1977.

On its own, each technology has the capacity to change business activity. Taken together, they have the potential to radically reshape society, businesses, the workforce and the economy. These are the occupations that employ many people which are all facing considerable disruption within a very short time frame. Low skilled jobs are at high risk of being automated and low skilled workers will struggle the most to find new jobs. Any new low skill jobs created will be at risk of being automated and will face high competition with the many unemployed low skilled people willing to perform it.

Gaining an entirely new advanced skill set is difficult and is currently very expensive and time consuming. How do you begin to take the median aged retail worker at 38 who probably hasn't looked at a Math textbook in over 20 years and turn them into a robotics engineer or computer vision scientist. How does the average aged 55 year old truck driver pay for their housing, family, elderly relatives care costs, rising living expenses and bills etc. without work. How do they survive until retirement with no work available for them? How do the 26% of fast food staff with children provide for their kids while upgrading their skills if suddenly $15 an hour is more than the cost of a Moley robot? What happens to the millions of teenagers who can't get their first step on the job ladder due to overwhelming competition for low skilled roles, will they face youth unemployment at levels similar to Greece?

In the full article I show how more industries and major sectors face disruption within the next 20 years from smarter, cheaper and more powerful digital and robotic technologies, increasing educated global competition, new outsourcing technology and changing models of employment. I also explain the solutions to ease the disruption and prevent unnecessary suffering as we enter a new digital age driven by exponential technologies. There is a way for us to equally enjoy all the wealth and prosperity this technologies offer.

http://nathanleigh.co.uk/exponentialdisruption.html