The Work of the Future

USC Viterbi managing editor Marc Ballon recently spoke to a panel of engineering, business
and economic experts about how the gig economy, the rise of robots and the growing importance of entrepreneurial thinking are transforming the way we work.

Forbes claims that robots will be the greatest job creators in human history. By contrast, Martin Ford, author of “Rise of the Robots,” argues that we might need a universal living wage because robots will eliminate so many jobs. What is likely to happen?

S.K. Gupta: I think in the short term, robots will eliminate jobs, but in the longer term — once people are free and can think a little bit more — people will be able to do new creative things. New types of services will be offered and that will create lots of new jobs. … Humans should not see robots as competition. Humans should see robots as tools, which enhance their own productivity.

Sonya Sepahban: It has been said that we’re in the Fourth Industrial Revolution. Every time we moved to mechanizing things, mass production and automation, everybody was fearful.

Andrea Belz: As Sonya said, we’ve had continuous transformations since the beginning of time, and each of those transformations brings a new set of challenges as it solves a set of problems. It’s like raising children — every phase has one set of things that get better and a new set of challenges. And we’re seeing exactly the same thing on a broad social scale.

Matthew Kahn: There’s a line in economics that we’re optimistic about the rise of robots actually creating new jobs in people-person skills occupations such as sales, but in those fields where the workers are in direct, head-to-head competition with the robots, the machine might beat the man, in many cases.

John Boudreau: I increasingly believe that jobs are the wrong unit of analysis, and that we’re trapping ourselves in very old thinking by thinking about a job as a bundle of things that someone does 40 hours a week. There’s a couple of really interesting studies about automation. One of them, by Oxford University, went and looked at the makeup of jobs. I’ll call it disaggregating or atomizing the jobs. The study basically said that if enough of the job is robotics-compatible, then that job can be done by a robot. They came up with 47 percent of jobs could be automated. Another group took apart the jobs and looked at just the parts that are automatable. They came up with about 9 percent. So, if work is divided up into these modules or a set of tasks rather than as this bundle that has historically existed as a 40-hour job, I think we begin to see the patterns in a different way.

AB: That’s really interesting, because it’s basically the mirror image of what people are saying in the hiring world. That is, people are no longer résumés; they’re really a collection of capabilities and skills. That’s the gig economy.

SS: That’s exactly right. We just need a different framework. According to the U.S. Bureau of Labor Statistics, about 50 percent of all labor is going to be independent workers by 2020. That’s 80 million people. The World Economic Forum said the same thing, that everybody had better figure out how to be an entrepreneur. So I think students need to start thinking of themselves as a startup. They need to [identify their] unique value proposition, the UVP. You know, competition is everywhere. Now, you’re competing with somebody in New Zealand, in India, in China.

In 2017, you can work as a trucker in Kansas and make $65,000 to $70,000 per year. Alternately, you can work for United Technologies in manufacturing in Indiana and afford to buy a house and send your kids to college. What are the jobs of the future that will be available at a large scale that will provide a similar middle-class existence?

JB: I suppose there will be jobs that do that, but I’m having a hard time imagining what they will look like. My bottom line: I think we need to be talking about good work, not good jobs. … Coal miners and manufacturing experts are not, in the long run, going to be able to get back the jobs they held or the jobs their parents held. But they have skills. There are coal-mining experts in Appalachia who know how to fix the machines that China is using.

AB: One of the premises of your question is that people want to work and that corporate America is driving them out with machines. It doesn’t always happen that way. Some of this [automation] is driven by the fact that people don’t want the jobs that [offered] a good living for their parents. For instance, the mining industry anticipates a labor shortage of about 90 percent in the next 10 years because they simply cannot recruit enough people to go to the difficult locations, such as remote sites in Australia and so on. Therefore, the mining industry is accelerating its automation because they know a need continues to exist for those commodities, whether it’s metal or coal or other resources, and they are racing to automate to continue to perform. They’re so grateful for the automation.

Is automation good for society?

SS: It has always been good. Every transition has always been good, ultimately. There’s just a transition period.

SKG: The difference between the previous industrial revolution, where automation played a role, is that in the last one it made mass production better. That means that all of us can buy affordable products that are mass-produced. The next revolution is about flexible automation. What is likely to happen is [the manufacture of] customized products cheaply. As a result, a large number of people can actually get on the design and creative end of product development. All of us would love to have personalized products, whether clothing, whether it be a chair you want to sit on. You can assume robots will be capable enough physically to do all this. [But] somebody has to design it. Somebody has to come up with the concept. Once humans are not needed to do the physical labor, they could do more of the creative, service, design end of things. This should create new jobs.

What will happen to people who aren’t lifelong learners? 

SKG: People will need to adapt. This adaptation might take few months for them to learn new things. But there will be several sectors with opportunities, such as the non-medical health care sector, where basically you’re taking care of people living in their home. There’s the food industry, entertainment. So there are lots of such things that will be out there, where automation makes you productive. Therefore you can sell your services to 100 people and earn good wages. … I think people will learn to use automation that doesn’t require a bachelor’s degree, but it’s going to require some retooling.

In what manufacturing and service sectors do you think the United States can become a leading job creator in the new economy?

JB: For me, it starts to make sense if I start to think of the work within sectors. I would love to see the U.S. become a pioneer in creating an infrastructure to make this kind of human capital market work. … For example, if you’re in the military and moving to the private sector, what does being a wing commander in the Navy mean to General Electric or Walmart? There’s an entire startup ecosystem working on providing a place where you can bring yourself to the world, translate what you’ve done into the language the world can understand.

AB: Something [like] that already exists, if you think of different pieces of it. Even if you consider Craigslist, it’s very easy to post a gig on there. And I’ve hired, and I don’t know how many companies have hired, people that way.

JB: We need some kind of a safety net for these people. … There’s a lot of infrastructure that existed in the more traditional world of manufacturing and mass production that depended on an employer and maybe a collective union working together. I think those dynamics are still going to exist, but the challenge is to explore how they will exist in a more virtual way, in a way that’s less bundled together in boxes called an organization, a union, a job, etc.

SKG: The rest of the world still views the U.S. as the leader in education, medicine, entertainment and finance. I think with the new way of delivering services internationally, the U.S. can continue to exploit this … the U.S. has done spectacularly in technology creation. There’s also lots in the pipeline where key innovations are happening in the U.S.: self-driving cars, alternative energy, new battery technology. … And then there’s the advanced manufacturing part of it. … Automation will help bring some advanced manufacturing jobs back to the U.S.

Will income inequality grow in the brave new world?

M.K.: In short, yes. Think of all the people currently driving for Uber. If Viterbi scientists make the progress they hope, within the next five to 10 years, will all of these guys be driving for Uber? And what will become of them? … Will their income have gone up or down? Will they have entered Viterbi as students, now that they are no longer driving? Or will they be working at McDonald’s?

AB: The gig economy facilitates this very rapid churn. The separation costs are much cheaper on both sides for the employer and the employee, so you can cycle through very quickly. … There will be opportunities for those willing to learn a lot, and there will be greater opportunities for those willing to learn even more.

SS: If left with no other action, the trends indicate that this disparity is going to continue and even get larger. So the question is, should we just not worry about it? I think the answer is we should absolutely worry about it. … If you look at the history of the world, when this happens, where nations and empires of the past got very wealthy, at least some portions of them, there were uprisings or decline. Things just kind of implode. … I believe in American exceptionalism, and I believe we are a nation that can figure it out.

AB: When you think about income inequality, people often refer to the differential between the top end and the bottom end of the spectrum. And one of things we tend to forget is that the entire distribution is moving to the right. There was actually an article in [a recent] Wall Street Journal talking about how 100,000 people-plus are lifted out of poverty today, another 100,000 tomorrow, and so on. Globally, we have a much smaller percentage of people living in poverty than ever before. … Everybody is being carried along by the wave of transformation.

How do you see USC and USC Viterbi preparing students for jobs that currently do not exist?

JB: Almost every analysis suggests it’s about learning to learn, about changing attitudes. You’re going to need to change yourself every five years, every 10 years. Only a few universities, including USC and USC Viterbi, are explicitly embracing the idea of meeting a constant need to train and retrain individuals over their lifetime.

MK: [Economist] James Heckman, the University of Chicago’s Nobel laureate, now affiliated with the USC Schaeffer Center, has been making the case for the past 10 years for universal pre-kindergarten. He makes this case [that] from birth to age 8 or so is this pivotal time of life and that it is crucial in helping every kid get off to a good start.

AB: Universities have always been in the business of adapting. … What you can do very effectively at a university is analyze information. So our role will be to help enable the synthesis process, which is something that is very difficult to automate.

Is it going to become imperative that everybody becomes an entrepreneur?

SS: That’s what the World Economic Forum says. Who am I to disagree with them?  That’s why I think initiatives like the ones that USC is leading are so important, and students should take advantage of them.

AB: Do we need to be teaching entrepreneurship? We do, but at a very macro sense. That is: Do you understand the value of what you generate? Can you provide something unique? Can you continue to do that repeatedly and sustainably? That is the essence of understanding a business model. We are embedding that in the engineering curriculum because we believe it is our responsibility to teach every engineer to understand the value that he or she creates and the business model around it. That doesn’t mean that every person is going to go off and re-create Google.

Is automation in high-end manufacturing an antidote to offshoring?

JB: The CEO of [HVAC manufacturer] Carrier Corp., when he explained what Carrier was going to do in response to President Trump’s tweet, said most of that investment was going to be automation. So, yes, there are some jobs that are going to be saved. But what [Carrier] really decided was to invest in more automation-enabled work, in the U.S., and that might mean fewer jobs. More than offshoring, statistics suggest that automation has and will be the big driver of job losses and job changes. And that’s happening globally no matter where you are.

SKG: Next-generation automation will certainly make it feasible to do local production. A 3-D printer is the same [price] whether you buy it in Germany, China or the U.S. But technology’s only a piece … Different countries have different tax policies. So, in California, the machine that’s going to create a job for you still demands a sales tax, while some other country might actually give you 10 percent tax credit on it. So, even though the cost of automation is roughly the same globally, the tax policy still makes a difference.

Should the students of today be optimistic or pessimistic about the changes going on?

SS: Super positive. As long as they don’t sit in fear of these things, as long as they embrace it, they can go out there and do anything. That’s how they should look at it. Not, Oh my God, this automation is replacing me, or there’s global competition. … They should go create. There are many, many startups yet to be created.

AB: There appear to be two Americas that we have can be described as the urban metropolises and the smaller towns that survived on manufacturing. But they can also be described as the digital immigrants or the digital natives, or the older versus the younger learners. We need to figure out those bridges, which are geographic but also demographic. As the economy transforms, it’s going to affect each of these groups disproportionately. I have a friend who speaks in my classes on the topic of creating luck. And he asks my class every time, at the beginning, “How many of you feel pretty lucky?” And in general, 25 to 30 percent of the class raises their hands. He says, “Well, you live in the freest nation on earth in the best time in history. … Would you rather be in the position you’re in today or 100 years ago?” And you’ll probably pick today. So while we do have to address all those disproportionate impact questions, it would be silly to say that you’d rather be living in a different time. … I think we have to acknowledge that we’re fortunate to be where we are today.