Future Technologies. Have we reached “peak jobs”?

ImageIf I’m born again, I want my job to be “Senior Futurist”. This is the job title of a gentleman by the name of Klaus Ægidius Mogensen, who works at the Copenhagen Institute for Futures Studies and has recently released a 62-page report titled Future Technologies.

The report is only available to member organizations, but I want to thank my good friend Alessandra Losito and her employer Pictet for sharing it. Here are a few of the most intriguing possibilities that Mr. Mogensen throws our way (all dates, of course, “subject to some uncertainty”):

  • 2020: Free GMO trade agreements between US and EU.
  • 2025: The MARS ONE project sends the first colonists to Mars (however, also note the prediction for 2037: MARS ONE gives up sending more colonists to failed Mars colony.)
  • 2034: Authorities finally give up censoring the Internet. (Yay!)
  • 2040: 75% of cars worldwide are fully autonomous robot cars.

In 2035, the author also says, 50% of present-day job types are wholly or mostly automated. The rapidly growing use of robots (and more generally software, I guess, not just the variety with hardware attached) leads to jobless growth: adding to that, “individuals unemployed by automation have to find jobs in fields with lower productivity, causing a decline in overall productivity, in spite of increased productivity in industries where a lot of automation is possible.” And here is the wild card, or “possible extreme future event”:

In the long term, it is possible that robots and computers will handle all the necessary work, making it unnecessary for people to do other work. This can lead to an economy that is not based on work as a source of earning money; something that is central to present-day economics.

I have to admit that I find this scenario very extreme. It jars with a present-day reality where blue-collar jobs consume 40 hours a week and almost everybody I know in white-collar, corporate jobs is regularly working 50-60 hours per week (you’d think we’d be smarter than that). Is this prediction an extreme case of the “lump of labor” fallacy – in which case, we shouldn’t worry, because new work to be performed will keep popping out? Is it perhaps something that will truly happen, only a lot farther into the future than we think, as these things tend to do (re-read my rant about the Singularitarian future)?

But, on the other hand, unemployment is real, and jobless recoveries (where we have recoveries at all) are a fact. And well-documented authors such as Brynjolfsson and McAfee (The Second Machine Age) are worried about very much the same issues.

So, let’s go along with the futurist thought experiment and imagine a future where the work to be done by humans is vastly reduced: way after a brief moment of “peak jobs”, so to speak, that is already slightly behind us. What happens? Is this a scenario where billions of idle people consume all their time in adolescent ennui, addictive entertainment, and training for holy wars? Will capital (invested in robots) earn all the money, and labor none of it? Is Piketty right? Will the masses live in destitution? Will suicides skyrocket? And what can we do about it?

Evolutionary technologies may claim to be ethically neutral. Revolutionary technologies never are. We need ethicists along with educators, economists and technologists to help us craft a sustainable future – one that we want our children to live in. Forget about privacy, climate change, human cloning and Mars landings: the central ethical issue in 21st-century politics will be “peak jobs”. The search for a 21st-century John Rawls is open, and more urgent than it ever was.

Nassim Nicholas Taleb, Antifragile: a review

AntifragileYou knew that Nassim Nicholas Taleb’s Antifragile was in my reading list: having read it, I now owe you a review. Taleb’s The Black Swan was a book I found not only clever and innovative, but engaging and somehow necessary (for reference, here is my 2007 Black Swan review); Antifragile, rather less so.

What is antifragile? Taleb has coined the neologism to describe a class of things that “benefit from shocks”: “thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.” “Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.” It is a property of living beings that Taleb describes in mathematical form (convexity) and proceeds to apply to ideas, cultures, political systems and much more. He is least interested in the application of the idea to the “vulgar” world of finance, perhaps feeling that the events of the past few years have abundantly proved his point.

Figure 12

Notwithstanding the author’s ambition, scope and breadth of intellectual interests, let me say right away that this would be a bigger book if it didn’t hit the reader in the face repeatedly with bitterness, sarcasm and contempt. The deeply held opinions of the author may not have changed since his previous books; his tone, I think, has – and not in favor of readability. Just witness the ad personam taunting and teasing directed at certain people (Thomas Friedman, Paul Krugman, Joseph Stiglitz, Robert Merton) and schools (“The Soviet-Harvard delusion”); the author’s scorn for entire professions, such as academia and management; his rants against large corporations, with the exception of Apple (!), and disdain of corporate leaders, except for Steve Jobs. Passages like this may be occasionally entertaining to the reader, but grow to be too much:

The historian Niall Ferguson and I once debated the chairperson of Pepsi-Cola as part of an event at the New York Public Library […] Neither Niall nor I cared about who she was (I did not even bother to know her name). […] My experience of company executives, as evidenced by their appetite for spending thousands of hours in dull meetings or reading bad memos, is that they cannot possibly be remarkably bright. […] Someone intelligent—or free—would likely implode under such a regimen.

The most convincing arguments in the book are about medicine and diet. Which is somewhat surprising from a non-specialist writer, until you remember that most medical and nutrition professionals have a bias for intervention (medicate, perform surgery, keep you on a diet, sell you supplements), when subtraction (not intervening and removing things instead) would often just work as well. They therefore live an implicit conflict of interest, the paradoxical result of which is “if you want to accelerate someone’s death, give him a personal doctor”. Taleb is right to call the reader’s attention to iatrogenics, the (usually hidden or delayed) damage from treatment in excess of the benefits. His ideas on diet also make sense: our bodies benefit not just from variety of nutrients, but from some “randomness in food delivery and composition” and some stress in the form of periodic deprivations (such as in the Orthodox lent) and occasional fasting. Even here, though, the author’s Levantine superiority complex (and don’t you forget that Steve Jobs’s ancestors came from Syria!) gets to be rather quirky:

I, for my part, resist eating fruits not found in the ancient Eastern Mediterranean (I use “I” here in order to show that I am not narrowly generalizing to the rest of humanity). I avoid any fruit that does not have an ancient Greek or Hebrew name, such as mangoes, papayas, even oranges. Oranges seem to be the postmedieval equivalent of candy; they did not exist in the ancient Mediterranean. […] As to liquid, my rule is drink no liquid that is not at least a thousand years old—so its fitness has been tested. I drink just wine, water, and coffee.

His brief critique of Singularity efforts follows logically from his arguments, but is delivered with the recurring scornful attitude. Well, at least he remembers the fellow’s name:

I felt some deep disgust—as would any ancient—at the efforts of the “singularity” thinkers (such as Ray Kurzweil) who believe in humans’ potential to live forever. Note that if I had to find the anti-me, the person with diametrically opposite ideas and lifestyle on the planet, it would be that Ray Kurzweil fellow. […] While I propose removing offensive elements from people’s diets (and lives), he works by adding, popping close to two hundred pills daily. Beyond that, these attempts at immortality leave me with deep moral revulsion.

The least convincing arguments in the book are those in praise of entire economic systems based on “small is beautiful” (going hand in hand with the author’s love for the Swiss political system). Taleb rightly praises small entrepreneurs for their risk-taking: even if small businesses are individually fragile (as in the example of restaurants) or merely robust, even harboring a bit of antifragility (taxi drivers), their ecosystem (the restaurant scene) becomes antifragile. And he is right to point out that size can make you fragile: it is probably true that large projects are intrinsically over time and over budget due to intrinsic negative convexity, and that “the problem of cost overruns and delays is much more acute in the presence of information technologies”. Yet, one cannot seriously propose the London Crystal Palace (an overgrown conservatory built in 1850-51) as a model of architectural effectiveness, let alone human achievement, today.

It seems to me that in deliberately ignoring that it is mostly large organizations that create large economic surpluses, Taleb gets way too close to the current “degrowth” narrative, a crackpot economic proposition if there ever was one. While he openly despises large corporations and the people who work in them, he seems happy to write up his books on a computer built in a very large factory in China (as long as it is a subcontractor for Apple), to have his writings published by very large publishing houses, and to fly in planes built by large corporations and run by other large corporations (even while pointing out the fragility of air traffic control systems), for example to meet interesting people in Davos, at a large annual World Economic Forum gathering that would not exist if there were no very large corporations to sponsor it. Even the aforementioned New York Public Library is probably a much too large and bureaucratic organization for his taste, given that his model for an antifragile life and thinking is the “flâneur with a large private library”, no doubt acquired via independent (often antiquarian) booksellers.

With the exception of, say, drug dealers, small companies and artisans tend to sell us healthy products, ones that seem naturally and spontaneously needed; larger ones— including pharmaceutical giants— are likely to be in the business of producing wholesale iatrogenics, taking our money, and then, to add insult to injury, hijacking the state thanks to their army of lobbyists. Further, anything that requires marketing appears to carry such side effects. […] There is no product that I particularly like that I have discovered through advertising and marketing: cheeses, wine, meats, eggs, tomatoes, basil leaves, apples, restaurants, barbers, art, books, hotels, shoes, shirts, eyeglasses, pants (my father and I have used three generations of Armenian tailors in Beirut), olives, olive oil, etc.

Eyeglasses? Last time I checked mine, Luxottica had made those – and Luxottica is a very large multinational that has long abandoned its “small is beautiful” stage. Maybe Mr. Taleb orders his glasses from Warby Parker – fine. But do Warby Parker’s owners really not want to grow it into a much larger company? And does Mr. Taleb like a glass of vintage Chateau d’Yquem less than a Greek retsina, knowing that Chateau d’Yquem is owned by LVMH, a large corporation, and not a small artisan?

In summary, Antifragile is a thoughtful book with much to recommend it for, and you should read it if you like the author’s broad, non-academic erudition, share his reverence for ancient history and Mother Nature, and don’t mind his personal quirks too much; but the book’s flaws in tone of voice – and, sometimes, in argumentation – make it less strong than it otherwise could have been.

The dream that failed. The Economist on nuclear power

ImageOne year after Fukushima, the Economist has published a special report on nuclear power, which I recommend you read in its entirety if you are interested in the past, present and future of power sources on our planet (article and further links here).

It is a fascinating report (pictured: Enrico Fermi), and it ventures into broader issues of technologic success and failure (emphasis added):

The ability to split atoms and extract energy from them was one of the more remarkable scientific achievements of the 20th century, widely seen as world-changing. Intuitively one might expect such a scientific wonder either to sweep all before it or be renounced, rather than end up in a modest niche, at best stable, at worst dwindling. But if nuclear power teaches one lesson, it is to doubt all stories of technological determinism. It is not the essential nature of a technology that matters but its capacity to fit into the social, political and economic conditions of the day. If a technology fits into the human world in a way that gives it ever more scope for growth it can succeed beyond the dreams of its pioneers. The diesel engines that power the world’s shipping are an example; so are the artificial fertilisers that have allowed ever more people to be supplied by ever more productive farms, and the computers that make the world ever more hungry for yet more computing power.

There has been no such expansive setting for nuclear technologies. Their history has for the most part been one of concentration not expansion, of options being closed rather than opened.

This is what the Greek default looks like

Europe will have to make its choice this year. Either a much tighter, more constrictive fiscal union with a central bank that can aggressively print euros in this crisis, or a break-up, either controlled or not. I don’t think they can kick the can until 2013, as the market will not allow it. Either the ECB takes off its gloves and gets down to real monetization when Italy and Spain need it, or the wheels come off.

If you want to understand what’s going on in global financial markets, go to John Mauldin’s site and subscribe to his free weekly newsletter Thoughts from the Frontline. Every week he pores over analyst reports, travels, talks to a lot of people who know what’s going on behind the scenes, and sits down to package thoughts, numbers and charts to be conveniently delivered to your inbox to provide you with food for thought.  Also from this week’s newsletter: this is what the Greek default looks like.

Greece has two choices. They can choose Disaster A, which is to stay in the euro, cutting spending and raising taxes so they can qualify for yet another bailout; negotiating more defaults; getting further behind on their balance of payments; and suffering along with a lack of medicine, energy, and other goods they need. They will be mired in a depression for a generation. Demonstrations will get ever larger and uglier, as the government has to make even more cuts to deal with decreasing revenues, as 2.5% of their GDP in euros leaves the country each month. There is a run on their banks. Any Greek who can is getting his money out.

Greek voters will then blame whichever political group was responsible for choosing Disaster A and vote them out, as the opposition calls for Greece to exit the euro. Which is of course Disaster B.

Leaving the euro is a nightmare of biblical proportions, equivalent to about 7 of the 10 plagues that visited Egypt. First there is a banking holiday, then all accounts are converted to drachmas and all pensions and government pay is now in drachmas. What about private contracts made in euros with non-Greek businesses? And it is one thing to convert all the electronic money and cash in the banks; but how do you get Greeks to turn in their euros for drachmas, when they can cross the border and buy goods at lower prices, as inflation and/or outright devaluation will follow any change of currency. It has to. That is the whole point.

So how do you get Zorba and Deimos to willingly turn in their remaining cash euros? You can close the borders, but that creates a black market for euros – and the Greeks have been smuggling through their hills for centuries. And how do you close the fishing villages, where their cousin from Italy meets them in the Mediterranean for a little currency exchange? What about non-Greek businesses that built apartments or condos and sold them? They now get paid in depreciating drachmas, while having to cover their euro costs back home? Not to mention, how do you get “hard” currency to buy medicine, energy, food, military supplies, etc.? The list goes on and on. It is a lawyer’s dream.

There is a third choice, Disaster C, which is worse than both of the above. Greece can stay in the euro and default on all debt, which cuts them off completely from the bond market for some time to come. This forces them to make drastic cuts in all government services and payments (salaries, pensions etc.), and suffer a capital D Depression, as they must balance their trade payments overnight, or do without. Then they choose Disaster B anyway.

The Internet of the Future: Nouveau Monde 2.0, Paris, October 21, 2011

I had the pleasure to represent Italian Angels for Growth yesterday at a seminar held at the French Ministry for the Economy, Finance and Industry in order to advance the G8 Deauville agenda for the digital economy. It is a bit unusual for me to participate in a governmental event, but since the invitees were “Ministers for the digital economy, leading firms, start-ups, venture capitalists, bloggers and think tanks”, I thought at least it would be a place where interesting people gathered.

“New World 2.0: Concretizing the Internet of the Future”, or “Nouveau Monde 2.0”, was indeed packed with content and not too long on rhetorics. I had to miss the opening session on Thursday night, which dealt with Democracy 2.0 and saw Minister Eric Besson, the event host, engaged – quite empathically, I am told – with a number of Tunisian bloggers. (Here is a short interview he gave about Nouveau Monde 2.0).

Friday started with a discussion on network infrastructure that is by now familiar to me from working in a telco (I almost felt like crying out: “Those numbers on video traffic on cellular networks? They’re not tomorrow! They are practically today!”) and was framed by Cisco’s Robert Pepper, who showed projections from the Visual Networking Index leading us into the “Zettabyte Era” by 2015. Two key facts here: the volume of data transmitted around the world is increasingly driven by consumers, not businesses; and the biggest consumer demand is for video, in its many incarnations (short- and long-form, recorded and real-time, and so on). It is, also, a remarkably global demand: according to Google’s David Drummond, half of the views for videos uploaded from France this year were due to users ouside France. The question is, obviously, who’s going to pay for the networks we need to put in place. There was a full range of policy options represented on stage: the most laissez-faire was probably the U.S., whose Department of Commerce representative, Lawrence Strickland, maintained that regulators’ job is to “get out of the way”, but nevertheless admitted that there is at least one case, rural broadband, where the government should step in. The most interventionist? Not Sweden, not Finland, but Australia, where fruitless haggling with the incumbent, Minister Stephen Conroy told the audience, led the government to give up in frustration and launch a Newco tasked with building the National Broadband Network out of taxpayers’ money; one guesses that having Singapore, Taiwan and South Korea as “neighbors” and competitors tends to sharpen resolve. The proceedings were lent gravitas by European Commissioner Neelie Kroes, who reminded us that not only do we have a financial crisis to solve, but we must also find the resources to invest in our digital future. She deplored the lack of a single digital market across the Union (think of the mess that national copyright systems have gotten us into), and shone the spotlight on the recent Commission recommendation to establish a €9.2bn “Connecting Europe Facility” (here’s how it should work). Kroes was the star of the session: in a way, at at time when almost all politicians seem to think desperately short-term, she seemed to show how politics should care for the long run. (I am, needless to say, a fan of her commitment to put more “girl power” into technology).

The second session was moderated by entrepreneur, angel investor and independent board member Sherry Coutu, and focused on privacy on the Internet: “as a mother, I worry about these things”, she said in introducing the panel. Barbs were exchanged, as expected, between Simon Davies of Transparency International and Elliot Schrage from Facebook. Schrage was also challenged by the audience, notably when Tunisian journalist Emna Ben Jemaa took Schrage to task about a number of decisions on Tunisian pages made, or rather not made, by Facebook administrators during the Arab spring: if you followed the hashtag #NMwwwyou could almost hear the Twittershphere cheering her on.

The third session, introduced by Alcatel-Lucent CEO (and former BT CEO) Ben Verwaayen, took on the issue of the digital divide. In opening the panel discussion, Mr. Verwaayen admitted that even in the West we are absolutely nowhere with “Internet for all”, and asked whether spectrum is treated as a strategic scarce resource or a milk cow for finance ministers. Again, representatives from places such as Japan and Sweden shared the stage with politicians from Kenya and Morocco. Digital inclusion is a tough challenge, both in terms of infrastructure and in terms of awareness and culture: there are lots of inspiring experiments going on, from tools to get cashew nuts to market at the right time in Ghana to telecommuting after the quake in Japan, but no one has any easy answers.

After the “official” conference was over, there followed a start-up evening (“Innovation Night 2.0”) put together by the outstanding team from Le Camping: three nascent start-ups and three slightly more mature ones got to present one-minute pitches and be grilled by senior executives from Microsoft, Google, Facebook… Here, the star performer was Criteo, a business that barely existed three years ago and plans to book $200m in revenues in 2011. When research reports talk about the jobs and the share of GDP growth created by the digital economy, folks like those at Criteo are the reality behing the numbers. Well done, guys!

Overall, the day felt like one of those rare occasions where my generation (the 40-year-olds), the previous generation (Ms. Kroes’s), and the younger generation (the university students presenting their start-ups in the evening) almost spoke the same language. The Ministry (where Mr. Besson holds, in addition to Industry and Energy, a specific mandate for the Digital Economy) deserves credit for creating a common space where this could happen. It was a showcase for a very dynamic France, and perhaps an example to the many other countries where participants came from.

The roots of the subprime mortgage crisis, and everything that followed. From a David Foster Wallace article

One reads David Foster Wallace‘s long-form journalism collected in Consider the Lobster slowly and with care, knowing there won’t be any more of his pieces for Harper’s, The New York Observer, Premiere and so on. (Incidentally, Gourmet, the magazine that commissioned the title story, has recently ceased to exist, too.) One of these pieces, appearing in this collection in its full uncut glory, got a brief revival in the 2008 elections: it is “Up, Simba”, where DFW got to cover on behalf of Rolling Stone none other than John McCain on the campaign trail in the 2000 Republican primary, which McCain lost to George W. Bush after a non-inconsiderable amount of “negative advertising”.

“Host”, the piece that closes the collection, profiles for the Atlantic Monthly a conservative radio talk show host named John Ziegler working at KFI in Los Angeles, and it is insightful and probing and sad. I just wanted to notice one little thing, and point it out to you. When the host is off the air, the writer’s ear does not tune out to the mindless chatter of the advertising segments. The writer keeps listening. And (this is 2004) he observes that there is quite a bit more of a certain type of radio advertising than there used to be.

As of spring ’04, though, the most frequent and concussive spots on KFI are for mortgage and home-refi companies. In just a few slumped, glazed hours of listening, a member of this station’s audience can hear both canned and live-read ads for Green Light Financial, HMS Capital, Home Field Financial, Benchmark Lending. Over and over. Pacific Home Financial, Lenox National Lending, U.S. Mortgage Capital, Crestline Funding, Home Savings Mortgage, Advantix Lending, Reverse mortgages, negative amortization, adjustable rates, APR, FICO… where did all these firms come from? What were these guys doing five years ago? Why is KFI’s audience seen as so especially ripe and ready for refi? Betterloans.com, lendingtree.com, Union Bank of California, bethebroker.net, on and on and on.

I don’t want to attribute any prescience to DFW’s words. While he might be read as implying that nothing good would come of it, this may very well be just our interpretation as readers in 2010, with the privilege of what we know today. As a writer, he merely observed and reported. May we observe the world around us with the same open-mindedness and insight.

Project 10^100: a missed opportunity for girls and women

Well, Google’s long-delayed Project 10^100 has finally come to the voting stage. And all of the 16 bundles of ideas that have made it to this stage are worthwhile endeavors.

But they’re also a missed opportunity. None of the ideas is about empowering girls and women. In fact, the word “women” is entirely missing from the page that describes the 16 finalists.

Yet, economists have proved again and again that getting girls into education, teaching women about their reproductive rights, financing women’s ventures, and setting up services that allow women to be productive in the workplace is the hidden lever to unlocking growth and prosperity. None of the 16 ideas up there on that page recognizes this. (Sure, many women will benefit if voters choose to fund better technologies to remove landmines, or more education for African students, or early warning systems to prevent mass atrocities – including war rapes. But there is no idea up there that says  “let’s spend this money 100% on women”).

My proposal? Together with my friend Raffaele, I had submitted an idea about women’s leadership and role models. It went like this: The 1,000 member companies of the World Economic Forum would commit to having neither gender represented by more than 60% of Directors on their Board. Sure, it would primarily have impacted the West, and not so much of the developing world. But it was a very low-cost idea – all it takes is leadership, commitment and some monitoring systems – and it would have triggered a vast culture change in our business, political and civic organizations. Culture change will come anyway, you say? It doesn’t: we’ve stopped making any measurable progress at all – except for places with forcing devices, such as Norway. It didn’t fly: let me know if you find a better forum to promote it.

In the menatime, how are you voting on Project 10^100?