Machines don’t buy stuff (and they don’t create much either)
Machines don’t buy stuff
Occasionally I tune in to the latest in economics to see what is going on in the World economy according to the experts. I watch talks in Davos, listen to hedge fund managers, business people and government officials discuss the macroeconomic environments. There’s always a little indirect hints an ever increasing number of people who are forced out of the workforce by the rise of automation and globalization. While globalization is a complex topic, I just want to see if it’s possible to simplify the automation part of the debate.
So what’s going on… we can write software for computers and machines (hardware) that do tasks that people did before. For example, a company that needed a whole bunch of admin staff to manage paperwork or do routine work, no longer needs these people to do this work because they have bought a system that is comprised of software and hardware which does the same job automatically.
This company now has a whole bunch more money available, assuming 1) they pay less for the software/hardware than they did for the people who were previously doing the job, 2) and no longer retain the employees who were previously doing the work.
The people who had the jobs, it’s assumed, now do not have a job and need a new one. They may also need to reskill since the work they were doing before can now be done by software/hardware.
So in terms of money, let’s assume the company is still making as much money in revenues as it made before. However it has let go of 10 people who now do not have work. (For a local economy, this is basically the same case as globalization, where instead of machines, other people in other countries who don’t require as much wages, do the work.)
The question is where do those people who have lost their jobs get their money from now? and what does the company do with the extra money it has made by reducing the cost of wages for 10 people?
Personally I think the assuming the people know and love the culture of the company inside out and like to work, they can be reassigned and retrained within the company. When the company automates routine tasks, those same people who did the routine tasks are freed up to focus on stuff that requires their intellect, passion and enthusiasm.
Instead of spending hours walking to work, we have cars that take us there. Instead of spending hours on an admin task, that valuable time can be spent adding value for the company in the form of more time spent understanding evolving customer needs, developing products and services for these needs and building the company for the future.
Just like people who don’t learn new things, might get stuck doing routine work, companies who don’t focus their people on new ways to serve and delight their customers, are likely to become commodity businesses. People’s innovation is what drives the economy.
An app is another washing machine or a car that does stuff for us in our work or home life, so that we can put more of our energy and passion into creating and living! Life is beautiful and ever more so!