Employment is going backwards while the economy is booming - to make sense of this, we need to understand the race to replace humans with machines, writes Alan Kohler.

I used to think online shopping would mean plenty of work for couriers, because at least delivering the stuff that's bought online can't be automated.

But then on the weekend Jeff Bezos of Amazon announced that the company is well advanced on developing airborne drones, or Unmanned Airborne Vehicles (UAVs), to deliver stuff - little square aircraft that can be programmed with GPS coordinates and can zip a package out to the suburbs an hour or two after it's purchased.

He says it's three to four years off - the idea needs Federal Aviation Authority approval and they also have to make sure packages don't get dropped on someone's head, or the drone lands on the family pet, or in the pool.

In fact, it turns out Australia has become the first country in the world to allow private drone use (Civil Aviation Safety Regulation Part 101 lays down the rules governing unmanned aircraft and rockets).

What's more, an Australian start-up called Zookal, a textbook rental business based in Sydney, reckons it will be making drone deliveries within a two-kilometre radius by March next year.

Meanwhile, back on earth, economists are puzzling over Australia's weak jobs growth, which is happening despite a much stronger than expected bounce in GDP.

We'll find out later today, but all the recent data, including yesterday's stronger than expected retail sales, suggest that GDP grew more than 1 per cent in the September quarter, or 5 per cent annualised. The Australian economy, would you believe, is booming.

But employment is going backwards, down about 15,000 in the quarter; in net terms, 4,000-5,000 people per month are losing their jobs. The discrepancy can be partly explained by the strength of net exports, which, we learned yesterday, added 0.7 per cent to GDP in the quarter thanks to a big decline in imports.

But it can also be partly explained by one of the big contributors to strong GDP itself: capital expenditure. It grew by 3.6 per cent in September quarter, and it's not just the long tail of the mining boom: the "pipeline" of non-mining capex is now $138 billion, or half the value of mining capex.

With the dollar "uncomfortably high", as the Reserve Bank repeated yesterday while leaving rates on hold, Australian firms are under enormous pressure to get costs down or go out of business.

In the context of a strong exchange rate caused by weak currencies elsewhere and relatively high interest rates here, Australian firms are uncompetitive. They can't reduce wages so they are automating, replacing human beings as fast as possible.

The internet's next big wave, M2M or the internet of machines, is bringing with it a new wave of automation.

Publishers, manufacturers, the public service, and banks are all rapidly downsizing. Retailers that once resisted online shopping, extolling the virtues of bricks and mortar, are now racing to build internet sales because the margins are higher.

In Kerry O'Brien's riveting interview with Paul Keating, the former treasurer and prime minister said the people who lost their jobs in the "recession we had to have" (1991) ended up getting better ones.

That's what the optimists say about automation: that the machines are just replacing unpleasant machine-like jobs with better ones.

Except that this is not a recession - employment is going backwards while the economy is booming.

Maybe jobs growth will catch up with capital expenditure and GDP later, but it's hard to imagine the definition of full employment getting back to what it was before the rise of the machines.

Alan Kohler is Editor in Chief of Business Spectator and Eureka Report, as well as finance presenter on ABC News. View his full profile here.