NZ Herald business editor at large

The Big Read: How to prepare your kids for the robot revolution

Robots, virtual reality, artificial intelligence -- will they kill our jobs? And how do we future-proof our children. Liam Dann investigates

Will a robot terminate your job? And what will your children do for a living?

Research by consultants McKinsey & Co has found that 45 per cent of US jobs could be automated by technology that already exists.

We are on the cusp of an industrial revolution. Another one. It's been dubbed industry 4.0 by techies in the manufacturing sector.

The first revolution was the steam-powered rise of machines in the 18th and 19th centuries, the second was based on the assembly lines that drove mass production in the early 20th century and the third was the rise of electronics and computing that began in the 1960s.

Now a convergence of several new technologies is threatening to transform the workplace at speeds which have even ardent futurists wondering what we will be left to do to make a living.

The Pokemon Go craze has brought augmented reality into the mainstream.

Kids of all ages have been roaming parks and streets, hunting virtual monsters located in the real world by a smart computer program.

But the enhanced interface between the real-world user and the virtual world has implications for us all. Enhancing the workplace with computer graphics and visual cues promises to make complex physical tasks achievable even by first-time novices.

Meanwhile, improved sensors and the ability to process vast amounts of data are making more and more manufacturing tasks achievable by robots.

Progress in language and image recognition is encroaching on professional service and creative jobs - making experts and artists out of us all.

We've seen what apps like Uber can do to the taxi industry, but what about driverless cars?

That's a revolution that could turn the world on its head. Some estimates suggest 10 million US workers are employed either driving or servicing those drivers. Are human workers doomed?

"After years of automating factories, accountants are seeing Xero (Kiwi-made accounting app) and going 'Wow, am I going to be around?'" says Massey business school's Dr David Brougham, whose special focus is the future of work.

"The service sector jobs are high paying and high skilled but there are computer programmers analysing what people do and and working out how to eliminate the person from that process," he says.

Graphic / NZ Herald
Graphic / NZ Herald

Lawyers may be next, says Brougham. Imagine a supercomputer trying to crack a case, looking for a certain word or phrase and searching through the case law with a speed that no human can match.

"Maybe that's just a tool that makes their job easier ... but some would say harder for graduate lawyers to get jobs now."

But it's not all doom and gloom. It's always easier to see the jobs which will disappear than it is to identify new jobs that haven't been invented yet.

"So current thinking is 50/50 as to whether there will be more jobs created than lost," Brougham says.

"When you look at the industrial revolutions in the past, there have been more and different jobs created so why would it be any different now?"

After all, you couldn't plan a career as a social media analyst 20 years ago, because social media didn't exist, but now it is one of the fastest growing occupations in the media and marketing sector.

But whatever the tradeoff between old and new jobs, history does tell us that change can bring social instability. For example, the first automated looms in England sparked riots and the "Luddite" uprising.

We do need to brace ourselves for a huge change, Brougham says.

When you look at the industrial revolutions in the past, there have been more and different jobs created so why would it be any different now?

He made made headlines this year with a study which found New Zealanders were grossly unaware of the changes about to hit the workforce.

That study found 87.5 per cent of respondents either disagreed or strongly disagreed with this statement: "smart technology, artificial intelligence, robotics or algorithms could take my job".

Brougham cites a 2013 study by Oxford researchers Carl Frey and Michael Osborne as the landmark in the field.

Like the McKinsey research, it found about 47 per cent of jobs in the US were at risk from automation based on current technologies.

Some have challenged that figure, suggesting it overestimates the dexterity and intuition of robots when put to a real-world test.

But the McKinsey researchers broke automation potential down to specific task-based details. Their work is ongoing, but an article published this month includes analysis of 2000 workplace activities for more than 8000 US occupations.

They found that 60 per cent of all occupations could see 30 per cent or more of their constituent activities automated. The figures vary depending on the kind of work.

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Some 78 per cent of predictable physical work, like welding and soldering on an assembly line, could be automated. On the other hand, only 25 per cent of unpredictable physical work, like construction, forestry and farming, could be automated.

There's no doubt the machines are already on the rise in manufacturing.

Tech research firm IDC forecasts global spending on robotics and related services to grow at a compound annual growth rate of 17 per cent - from more than US$71 billion in 2015 to US$135.4b in 2019.

The good news is that a large chunk of that spending is support based - things like applications management, education and training, hardware deployment, systems integration and consulting. And all that means new job creation.

About 65 per cent of robotics activity is expected to happen in the Asia-Pacific region, driven by booming demand in China.

Clearly, New Zealand is going to have to keep up if it wants to stay in the manufacturing game.

The Manufacturers and Exporters Association has been working with Callaghan Innovation to try to prepare the manufacturing sector for the changes.

Last month they hosted a series of lectures by German Industry 4.0 expert Dr Frank Wagner.

We have a huge shortage of skilled manufacturing workers already so we shouldn't really be worried about reducing the demand.

Currently based at Queensland University of Technology, Wagner has first-hand insight into the highly structured and proactive approach the German government has taken to upskill industry. Needless to say, the Germans have embraced it.

Wagner believes the transition is good news for skilled workers. "In a high cost environment robots create jobs, they increase productivity ... only low cost environments need to fear robots," he says.

What's driving the change, says Wagner, is the ability of machines to talk to other machines.

And it's not just robots in factories. "We see a lot of Industry 4.0 in construction, agriculture, mining, food industry, even in tourism. these are all industries which are highly relevant to New Zealand."

He says the advantage for smaller companies like those in New Zealand lies in the scale of production. Technologies such as 3D printing will make it economic to machine components in very small numbers.

Wagner's host, NZMEA chief executive Dieter Adams, says New Zealand businesses are lagging in their understanding of the robotic revolution. But he's confident that once the understanding is there, we will catch up fast.

The competitive pressure is such that there is really no alternative, he says.

Graphic / NZ Herald
Graphic / NZ Herald

"Because what is now leading edge is going to become just standard."

Computer controlled lathes, for example, were once exotic but now they are in every workshop.

But what about those jobs?

Well, says Adams, you can argue it either way. Just look at all the reports coming out of the World Economic Forum in Davos this year, which focused on the future of work.

"We had predictions all over the place. There were well researched studies that predict an increase in manufacturing jobs and others that say it will lead to massive redundancies.

"But the thing is, if we don't stay competitive we're going to lose the jobs anyway."

The promising thing was that New Zealand manufacturers were seeing the the possibilities in new business models, as much as in process improvement and cost savings.

He cites the expansion of F&P Production Machines - a division of the Haier-owned F&P appliances.

It is effectively a robotics firm that makes the machines that make the machines.

The idea of a job for life, that's gone. So then you say, well, how do you cope with that? you need to be quite a different person.

Its primary purpose was to supply F&P Appliances with the equipment it needs for its factories, but it has become increasingly focused on external customers .

"There is no doubt that there's an element of replacing human labour with machines and robots," Adams says. "But we have a huge shortage of skilled manufacturing workers already so we shouldn't really be worried about reducing the demand."

The worrying part is that "all the reports and investigations predict skill levels will need to significantly increase and our education system is not equipped for that."

Simon Bennett, chief executive of listed recruitment firm AWF Madison, agrees the education system is where the challenge needs to be addressed.

"The idea of a job for life, that's gone. So then you say, well, how do you cope with that? you need to be quite a different person," he says.

"If you think of advice for your children, it would be you need to be more flexible and resilient because there will be times when you're out of work. You have to get used to working in different environments, different people around you. Getting comfortable in a team of 10 people that don't turn over is no longer the way."

As an aside, Bennett notes that in many ways job candidates are adapting more quickly to the change than businesses are.

Graphic / NZ Herald
Graphic / NZ Herald

At the blue collar end of the market, Bennett says he remains a bit cynical about the immediacy of the robot revolution.

"We've still got significant shortages in it and all sorts of new world careers like cyber security, but then at the other end of the spectrum, you talk about truck drivers; well, there is still a shortage of drivers in Auckland and a shortage of forklift drivers."

But more ominously, he is seeing the impact of intelligent computing on the professional services end of the market.

So demand for recruitment was shifting from sectors such as accountancy, where software was providing tools for people to do more of it themselves. The growth is in other areas such as marketing, he says.

McKinsey & Co's research into white collar jobs has found that management skills remain hard to automate in all industries - with 10 per cent or less of relevant tasks replicable by machines.

But other traditionally white collar skills are more vulnerable. For data collection and processing, between 60 and 80 per cent of tasks can now be done by machines in all industry sectors.

You have to be optimistic or it's hard to wake up.

For stakeholder interaction - in everyday language, customer service and sales - between 20 and 30 per cent of tasks could be replaced. Food, accommodation, arts and recreation, transportation and real estate were among the most vulnerable sectors.

When it comes to what many of us would consider the smartest areas of work - "applying expertise" -- McKinsey found the percentage of tasks that could be automated ranged from 20 per cent for professional services (lawyers, accountants and financial advisers, for example) to around 30 per cent for industries such as mining and agriculture. It was as high as 40 per cent for retailing.

The big question is how quickly these figures may rise as artificial intelligence gets smarter.

AUT professor of human resource management Jarrod Haar says he believes it is the soft skills - our most human attributes - that will be hardest to replicate.

His advice for young people is that they may need both soft and hard skills to compete.

It was great to see the Ministry of Education starting to push computer coding into the school curriculum, he said. But this would be a base level skill onto which we'd add a human dimension.

"It's having skills plus," he says. "Like you'll need to be an expert in public relations and coding."

Haar's research collaborator Dr Brougham agrees.

"If you think back over the past three or four hundred years, most of the jobs that existed then don't exist now but we've just created more jobs," he says.

"So that's why I'm completely unsure whether or not we'll have all these new creative jobs or whether we're headed for some dystopian 'have and have not' society."

"You have to be optimistic about the future or it's hard to wake up," Brougham says. "Look at climate change: if we say 'oh no, we've gone past the tipping point it's all over', then we don't do anything to actively change the future in front of us.

"Right now we're at that point where we can vote and we can decide who we buy from, we're still in control of how this pans out."

- NZ Herald

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