Okay, the title of my post is probably a bit overly dramatic. However, the fact of the matter is that our world is being more automated as each year passes by. Automation is becoming the norm in various industries. Artificial intelligence is on the rise and is becoming more sophisticated.
Automation and artificial intelligence is one of the main reasons I want to achieve financial freedom. I want automation and artificial intelligence to work for me. Rather than being out of a job not having prudently saved and invested when I could have.
So what industries and jobs are being automated?
- As I’m sure most of you are aware, self-driving cars and trucks are real. The technology is drastically improving. They’re being tested in Canada, the US, and Europe. This has the potential to eliminate a substantial portion of the truck driving and taxi industries. They’ve done test runs where trucks have hauled cargo across Europe and the US without incident. The biggest issue is what will the truck and taxi drivers do if they’re out of jobs? This has the potential to be a huge economic and social issue. I think retraining and education is key to get these people back to work in other industries. People once thought flying and space travel were impossible but we’re able to do these things now. So a world full of self-driving vehicles is possible. Whether or not people agree with the concept, there are benefits to self-driving cars and trucks:
- They have the potential to reduce accidents because human error is removed;
- traffic time can be reduced because cars and trucks won’t be weaving in and out of traffic and will keep optimum distance between each other;
- carbon emissions can be reduced because traffic will move more smoothly; and
- human efficiency will increase because people can focus on other things while in a car.
- Another hot issue these days, especially with the election of Donald Trump, is the loss of manufacturing jobs in Canada, the US, and Europe. This has put thousands of people out of work in the Midwest US, throughout Canada, and throughout Europe. This is probably one of the main reasons Donald Trump was elected. He was the only candidate talking to the people who had lost all of these manufacturing jobs. I don’t condemn the people who voted for him. No one else said they would look out for them. Trump has lambasted China and Mexico for manufacturing job losses. However, a Ball State University study found that automation accounted for 87% of manufacturing job losses and only 13% was due to free-trade deals and globalization (i.e., outsourcing). For example, the steel industry has lost 75% of its workforce since 1962 but the US is producing more steel than ever. The reason? Automation. So Mexico and China aren’t to blame – it’s automation. What’s the solution? The people who lost their jobs need to be retrained and educated in some other field. They then potentially need to be relocated, or local and state governments need to entice employers to move to cities that were once manufacturing hubs. I think the government or these employees’ former employers should pay for their retraining.
- For now, the safest place to be is in the services industry (e.g., accountant, lawyer, medicine, research, engineering, technology). It’s sometimes difficult to replace the human element in these industries. But with that said, some of these industries are becoming more automated. For example, in Canada, people can now process simple tax returns completely online without a human element. There is legal and tax software that provides detailed responses in seconds to almost any question. This reduces the hours a legal and tax professional can bill. Or worse, a professional may be cut out entirely. I recently read a Fortune article indicating that computers will eventually replace 80% of what doctors do. The reason being that computers are better at organizing and recalling complex information than humans. Often times, you can get diagnosed differently by various doctors when experiencing the same symptoms. Clinical trials have shown that computers are able to reduce these errors. Even teachers are being automated as courses are being offered completely online where a teacher isn’t even involved.
So how do you survive this?
- The most obvious way is to find a profession that probably won’t be automated for quite some time. These are mostly service based professions such as accounting, law, medicine, engineering, most computer related fields, etc… A way to rise above all is to specialize in some sort of niche such as a specific type of law, accounting, medicine, or engineering.
- For those working in manufacturing or fields susceptible to automation, the key may be to retrain in a different field or be one of the people who is in charge of the automation (e.g., own the company, are in management, or operate the technology).
- Stay on top of technological trends so that you can suggest and implement them in your company. This can apply if you are an employee – it can make you indispensible. It will absolutely apply if you own a business since it can be the difference between your business merely surviving and thriving.
- I think the key is to always be cognizant of the fact that your job, profession, or business may be phased out or eliminated by technology. By keeping this in mind, I ensure that I always keep learning to stay ahead of the curve in my profession and I ensure that I prudently invest. By investing, I decrease my reliance on my career. Rather, my goal is to become an owner of assets (stocks, bonds, real estate) so that I can leverage the technological advancement in our world.
Technological advancement can certainly be scary but it is part of the progress in our world. Over the last century and half, it has greatly improved our standard of living. Think of computers, TVs, automobiles, airplanes, and Smartphones. Now we’re moving into the next era of technological advancement – artificial intelligence, self-driving vehicles, and space travel for humans. I like to embrace technological change and not be afraid of it. My method to stay ahead of the change is to eventually become part of the investor class and own assets that leverage technology.