Category Archives: Economic Growth

Industrial automation will lead to autonomous/no workers factories

“You will see completely lights out factories for manufacturing,” said Rowan Trollope, senior vice president and general manager of Cisco Systems’ IoT and Collaboration Technology Group. “You’re going to see manufacturing technologies that are even easier to automate … that are really going to transform manufacturing.”

Source: 8 Internet Of Things And UC Technologies You’ll See In 10 Years – Page: 1 | CRN

This is also somewhat true for the service industry. A combination of automation and self service will reduce labor requirements. Long ago, the ATM machine did indeed reduce the need for bank tellers. Service service check outs at stores (grocery, hardware, department stores) has reduced staff needs. Some restaurants are using apps for self order/data entry by customers, and others are using a combination of self order kiosks and customer self service (Think of filling your own soft drink cup at a fast food restaurant.)

Minimum wage laws, the new requirement in some locales to pre-schedule workers two weeks in advance, and the expense of health insurance will cause a rush to replacing labor with automation. These changes were going to happen eventually but new costs associated with labor will accelerate this change.

To the extent this frees up labor to purse other, higher valued added functions, this can be a net positive with improved economic efficiency. However many will not be in a position to migrate upwards to provide higher value – this will cause disruption and hardship that will lead to government legislation that requires economic inefficiency.

A good example of the latter is Oregon’s law that prohibits individuals from pumping their own gas into their own car. Oregon is the only state in the U.S. that outlaws self service fueling of your own vehicle. This is a “make work” law – and consumers pay for it in the form of higher prices and longer waits for service and refueiling. Yet that is how government responds to this sort of problem. Next: A ban on using apps to self order at restaurants? Who knows.

Why on-the-job training has mostly vanished

Is On-the-Job Training Still Worth It for Companies? – Businessweek.

The relationship between employers and employees is such that jobs are rarely long lasting anymore. As a result, employers do not wish to invest in worker training for fear they will not see a return on investment. Another fear, not mentioned in the article, is that training workers with new skills often implies they should earn more money – which employers prefer not to pay. And when the employer does not pay for those additional skills, the employee leaves for elsewhere.

An issue in my field is employers seeking applicants with a long list of degrees and certifications, paid for by the employee. But employers are not paying much more for the employee’s own investment – the result is employers are expecting more but paying less for that value. Which is another way of saying that pay is going down, even if the $ value looks greater.

Future trends in Information Systems and Technology

This past Saturday I attended an IEEE Computer Society-Seattle sponsored seminar on future trends in information systems and technology. Speakers covered a very wide range of topics.  Here is a bullet point list of some key thoughts from the seminar:

  • The fastest growing market opportunities involve the mobile space.
  • Mobile means smart phones, tablets plus literally billions of devices expected in the years to come that communicate wirelessly.
  • Mobile also means cloud computing.
  • Desktop computers have become massive overkill for many businesses with 90% of the desktop resource literally unused (in terms storage, processing power and even unused in time).  These will be replaced with apps running on smart phones and tablets which are with you all the time. Few people carry a notebook computer to meetings anymore.
  • Applications are gradually moving to “simple”.  No one takes a training class to use the google.com search website. Few people need training classes to use their smart phone app. This is what one called the “Consumerization” of business applications. Companies do not want to spend time and money on training and are looking for ways to get out of that.
  • All applications are likely to be developed in iterative fashion (e.g. agile methodology) and will scale upwards as needed to handle larger capacity (cloud computing where more services can just be added as needed, when needed)
  • Applications are becoming “game-ified”. That is, we see even a progress bar on LinkedIn, and we keep track of how many network contacts we have, or how many friends we have on social media websites. Some firms offer “rewards” for achieving goals. All of these ideas come from gaming – and they apparently work and give status recognition to customers.
  • All mobile devices must be treated as untrusted devices within corporate information systems.  Android suffers from malware made possible by Android’s open marketplace. Corporate information security folks are terrified of Android devices on their network, said one. This gives the security edge to iPhone, and either RIM’s Blackberry (shrinking market share) or Windows Mobile Phone (not yet with any market share).
  • Social media is where all the customers are today. Businesses know this and it has many future impacts. Of course, it means advertising on social media; it means engaging customers on social media. Upset customers have a disproportionate influence with social media. Twenty years ago, I heard that only 1 in 27 dissatisfied customers complained to the business; the rest just never came back, but they did tell friends of their bad experience. With social media, all bad experiences quickly multiple.
  • Facebook Stores is going to be a killer application for social media. When people check their Facebook updates constantly throughout the day, this simplifies the online shopping experience – plus sharing and peer pressure can be used to drive sales.
  • Most non-IT businesses (think retailers, manufacturers and so on) will most likely outsource their IT functions. Unless IT provides a competitive advantage (e.g. Amazon), most companies have no business trying to do their own IT and many admit to not doing it very well. Everything will be outsourced. The IT function will be run by “business professionals” and those focused on the business, rather than technology.
  • Corollary: For most businesses, IT is not providing a sustainable competitive advantage, just as having electricity does not provide a sustainable advantage when everyone has it.
  • What happens to the job market for those working in information systems or information technology?
  • One speaker suggested that anyone doing individual contributor work in a cubicle today will not have a job within ten years. All such work will migrate outwards to the lowest cost supplier, which often means offshore. This becomes simpler as IT is treated as a utility (think like electricity).  Few businesses have a Chief Electricity Officer and run their own power systems.
  • Most businesses should outsource their application development.This creates opportunities for innovative entrepreneurs to do 1 or 2 things better than everyone else and sell that capability to others.  On an individual level, individuals should also strive to do 1 or 2 things better than everyone else and work in organizations with lots of smart people. (Corollary would be that the “era of the generalist is dead” and if you are not surrounded by smart people, your career will not survive.)
  • Within business organizations, the IT person who survives will focus on business, innovating, doing data analysis, business development, management functions and outsourcing IT since IT is just a commodity like electricity.
  • Higher education is not turning out information system students with the skills that employers actually want.
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