On this episode of FTP, the Futurum Tech Podcast, we take a look at automation and the ethical issues surrounding automation and whether it enhances worker productivity or replaces workers. Plus, we’ll take a look at the FTC and what they’re doing with Facebook. We’ll take a look at Tesla’s very, very strange week as well as touching on Walmart’s foray into AI-based stores, Kohl’s and Amazon’s new partnership, and Samsung’s attempt to dominate the logic chip market. All this and more on this episode of FTP.
Our Main Dive
Automation is quickly transforming the global workforce. But are technologies like Robotic Process Automation (RPA) augmenting workers who can now do more and increase business productivity? Or are they replacing workers and allowing businesses to cut costs and improve margins? Much like AI (artificial intelligence), there is an aspect of #digitalethics that needs to be discussed and that conversation requires the participation of businesses, technology providers, governments, and society to determine just what type of “culture” we will live in and how automation can be leveraged to advantage within an ethical framework that benefits all.
Our Fast Five
We dig into the week’s interesting and noteworthy news:
- Walmart’s AI-based concept store is alive and kicking (and it isn’t anything like Amazon’s GO)
- Kohl’s expands its “hybrid GIG economy” partnership with Amazon
- Samsung bets $116 billion on logic chips to compete with Intel & Qualcomm
- Facebook sets aside $3 – $5 billion dollars for the FTC’s “user data” inquiry (and nothing will change)
- Even Elon Musk is hedging on his prediction of 1 million Tesla robotaxis by 2020
First we learned Amazon’s Alexa was saving and sharing snippets of user conversations with Amazon’s Data Services “review” team. Now we learn this same team has access to Alexa geotagging data that could allow reviewers to match conversations with user addresses. We’ve got to ask the obvious question “is there an ethics officer within Amazon and did they know about this?” Our guess is yes on the former and no on the latter (or so we hope).
Crystal Ball: Future-um Predictions and Guesses
By the year 2030, will automation replace more workers than it augments? Unfortunately, the answer is complex, and one that needs to take into account a number of factors—including the risk of job obsolescence due to other market factors— that need to be taken into account. We share our Yes/No predictions and explain why.
Olivier Blanchard: Welcome to this week’s edition of FTP, the Futurum Tech Podcast. I’m Olivier Blanchard, senior analyst for Futurum research, and joining me today is Fred McClimans, my colleague and co-conspirator on this podcast. Unfortunately, Dan Newman is traveling, so he will not be joining us this week.
Fred, how are you doing today?
Fred McClimans: I’m doing great, Olivier. How about yourself?
Olivier Blanchard: I’m doing pretty awesome, doing pretty great. Okay, so let’s jump right in. We’re going to start today’s show with a discussion about the future of automation, and specifically, I think we’re going to be having a subthread about RPA, which stands for robotic process automation. We’ll have some of our favorite tech news stories of the week in our Fast Five segments, followed by Tech Bites, in which we highlight one of the biggest tech-related fails of the week. And we will end the show as usual with our crystal ball.
Before we begin, though, as always, it goes without saying that this show is intended for informational purposes only and no advice or insights provided here today should be taken as investment advice. Now that that’s out of the way, let’s talk about robotic process automation and really the future of automation. I want to kind of steer this towards the fear that robots and machines and AIs will take all of our jobs.
It’s a popular discussion pretty much everywhere. It’s not just in the tech industry anymore. You start to see it in the media. You start to see it at a lot of conferences. People are worried, and it doesn’t matter if you’re blue collar, white collar, gray collar, green collar, orange collar. These are all, by the way … Every type of job out there has a color code for the collar, as in the collar of your shirt. There’s black collar, which is oil and gas and mining industries. Orange collar is prison labor. Green labor is environmental and just eco-friendly industries.
Everyone is concerned that at some point in the near future, some kind of automation will take their jobs from them. There are essentially two paths here that we can take. One of them is the path of automation as a means of replacement of human labor, and the other one is automation as a path to augmenting the capabilities and productivity of human labor. These two don’t necessarily have to be opposing, but they are kind of like the two ends or the two possible paths that we can take with regards to automation.
Fred, you went to a conference this week, or an event … I don’t know if it was a conference or symposium … that specifically focused on RPA, and I think that tried to answer that question whether automation replaces or augments human workers. Why don’t you tell us a little bit about that.
Fred McClimans: Yeah. This week I had a chance to go to a UiPath event, a user conference, where UiPath, one of the leaders in the RPA field, the robotic process automation, brought together about 300 or 400 of their users and had a great series of conversations around RPA, everything from what it is, how it works, its value proposition, all the way up to some of the more dicey issues about what are the challenges with RPA? Where does it work? Where doesn’t it work? What are some of the issues surrounding that issue that you brought up there, does RPA, does automation, do all these things replace people or do they augment people?
It was a great event. I had a good opportunity to connect with a lot of enterprise users out there and get a sense for how they’re deploying RPA and where they are in their life cycle. In fact, it’s interesting because just last month, we published a research piece on the future of work looking at workplace transformation, and in that report, we took a look at where RPA is today. It turns out that by 24 months out, so figure early 2021 timeframe here, about 50% of all the people that we surveyed in this particular piece of research expect to have at least 40% of all the tasks that could be automated actually automated.
That’s sort of an interesting stat there, because I do think that as we move through the process of identifying what can be automated today and start moving forward, we’re going to find that a lot more things can be automated than we thought could be automated. Certainly, as the technology advances and as we start to work through sort of the low-hanging fruit in the automation space, I think we’ll find a lot of these tasks can be transformed, can be reworked into different processes, which, in turn, opens up the opportunity for a second wave of automation there.
To your point, the whole issue of automation, it brings up a lot of fear in people. They look at it and they say, “Well, if I’m automating this, what am I going to do?” Certainly, the media, I think, kind of builds off that fear to an extent, because you can’t go more than a week or two without seeing some article out there, some chart, some stat, something that says here’s a list of all the jobs that are going to be eliminated through automation over the next X number of years.
The list is really quite extensive, but I think it’s not really quite an accurate portrayal there because as tasks become automated … And we’ve seen this throughout history. As something gets automated, people move on and do something bigger and better. Right now, there are a lot of things that we do in our daily lives and our business lives that are mundane tasks. They’re things that we could automate very easily.
Just as an example, somebody going through an Excel spreadsheet and performing the same type of calculations, same type of formatting, same type of exporting on a regular basis, that’s a terribly time-consuming process. That’s something that can easily be automated with today’s RPA tools, and that then frees the person up to start thinking about, well, what does the data actually mean? What’s the bigger picture? That’s where, I think, the emphasis really needs to be on. I tweeted something out the other day from the event, saying, “If your goal in automation is to do the same function with less resources, basically cutting cost and eliminating manpower requirements, you’re doing it wrong.”
What you really need to be thinking about is, how can I automate something and then take those resources, those people, the talent, and bump that up a level? Don’t let them worry about level-one functions. Think about level-two functions, level-three functions, areas where people really can excel. That’s the big key, because if you’re not looking to automate and expand, you’re basically looking to automate and stagnate, and stagnation is never good in any industry.
Olivier Blanchard: I agree. I’m a 100% proponent of using technology to augment the capabilities and productivity of workers as opposed to replacing them with some kind of automated tool or ecosystem of automation tools, so I completely agree with all this. But let me play devil’s advocate here, because I don’t want to just kind of preaching to the choir, but what do you say to people who have watched … Say, let’s begin with blue-collar workers in industries like just manufacturing, assembly line workers, people whose jobs can easily be automated 100%, or at least close to 100%, and who have watched their jobs disappear and who, in the opposite of what you suggested earlier, were not able to move on and go do something better, who kind of got stuck because they didn’t have the resources to be retrained.
They didn’t have the opportunities to move into different jobs or to move into different industries for a variety of reasons, educational reasons, being stuck in place because they can’t afford to move to a different state. They can’t afford to go to school. What do you say to people who actually live this and for whom there is no next step or next phase or recycling into an upward or diagonal career trajectory?
Fred McClimans: Yeah. That is a huge issue, and it’s one that I don’t think there’s any simple answer to that. But from a business perspective, I do think that there needs to be some type of not necessarily a contract, but sort of a goal to leverage technology in an ethical way and recognize that as a business, it may be very possible for you to simply automate away a whole group, a whole portion of your workforce. At the same time, I think there’s somewhat of an ethical responsibility, a societal responsibility to say, “If we’re going to do that, then we really need to think about what can we do as an enterprise, as a business, as a brand to retrain those workers, to move those workers to something where they can still be productive?”
That’s an aspect of our business culture that just really hasn’t been there to a large extent, and it’s becoming very quickly a very political issue. We see this coming up in the buildup to the 2020 elections here where these issues do need to be addressed. Somebody needs to figure out a way or I think we collectively need to figure out a way to say, “Yes, we’re going to eliminate X, but we also have a responsibility to retrain for Y and to give people the opportunity to move up that ladder to maintain their lives in a productive and contributing way.” Because the idea of just simply shutting down the company town when the mine closes and walking away from that, that’s just bad. There has to be a way to work through that.
Olivier Blanchard: Because the fear is … We’ve all watched this happen in manufacturing, right? And we’re about to start watching this happen in transportation. Will we still need truck drivers when the trucks drive themselves? Right? Will we still need taxi drivers when the taxis drive themselves? We’re going to touch on that a little bit in our Fast Five.
Fred McClimans: But, Olivier, I think that gets down to what’s the motivation or what’s the goal of the business? Should somebody like an Uber be driving, and no pun intended, driving in the direction of saying, “We want no person in our car”? Or should they be saying, “Look, we recognize there’s value in having that person in the vehicle and there’s value in having our economy and our society fully employed and productive as consumers in that society”?
Olivier Blanchard: Well, we can answer that question. That question is the motivation of the business is to maximize profitability for itself and for its investors, and so that is always in direct opposition to societal and ethical, not necessarily ethical concerns, but those broader societal concerns where companies can partner with governments to try to solve those, but their primary responsibility is a fiduciary one. Right?
Fred McClimans: It is. There’s a fiduciary responsibility to the investors and to the shareholders, but I would say that from a brand perspective, from a marketing perspective, and even from an investment perspective … Take a company like Uber or Lyft, General Motors with their driverless robo-taxi service or even now Tesla saying they’re moving into that space, if you look at that approach and two companies side by side, equal products and services, and one says, “We’re going to go completely automated and we’re going to cut 100,000 jobs out of the workforce over the next 12 months,” and another one that says, “We’re going to automate and we’re going to keep the driver in the car because we recognize the value of that person there,” which one is going to be selected more often as the ride of choice? I would like to think-
Olivier Blanchard: The one that has the cheapest fares.
Fred McClimans: I would like to think it’s the one that has the person in that car.
Olivier Blanchard: For some people, that’s true, but I don’t think we live in that world, or at least not yet. I think that for us to actually live in a world that works that way, we’re going to have to do a whole lot of spending on public service announcements and changing the culture, because at this point, an Uber could say, “Well, first of all, they were never our employees to begin with, so we’re not laying anybody off.” Right?
Fred McClimans: Yep, yeah.
Olivier Blanchard: “We just gave them the opportunity to make money and now they have the opportunity to go make money somewhere else, doing something better.”
Fred McClimans: Yeah. Well, that’s interesting, though, because that ties directly into the gig economy movement here, where gig economy and what we’re talking about here, responsible automation, they’re kind of opposed, in a way. As employees become contract workers, gig workers moving forward in basically large numbers, this issue is going to become more important. At some point, there has to be a coming together of citizens of businesses and of government to say, “For the good of all, this is what we’re going to do.” Think of it sort of as a taxation kind of issue.
We get taxed and we take those taxes and, hopefully, we put those taxes to work in an effective way that benefits everybody in the country, everybody in every country, everybody around the world. That’s something that’s lacking right now that I think needs to be addressed.
Olivier Blanchard: Wait. Let me reframe that because I think what I heard is, in the subtext, if we’re all replaced by machines or if a significant portion of taxpayers is replaced by machines in one way or another, whether they’re physical machines or virtual machines, that worker is now a virtual, or has been replaced by a virtual worker, and that virtual worker pays no taxes, and so-
Fred McClimans: Yes.
Olivier Blanchard: No, this is a serious question.
Fred McClimans: No, I’m with you. Yeah.
Olivier Blanchard: At some point, cities, states, even the federal government are going to realize that they’re hitting tax shortfalls because fewer people are paying taxes because fewer people are employed, and so is the question do we tax robots or virtual employees to compensate for that? And does some of that money potentially go into programs that either help them with moving expenses or job training or something along those lines? Is that what we’re talking about?
Fred McClimans: I think that’s a strong part of it. The other side of that, though, is don’t think about it from a government infrastructure perspective, but think about it from a business market perspective. These employees or these drivers, these gig workers, as they get replaced, yes, they’re no longer paying taxes that they were before, but they’re also not generating the income that they need to be consumers any longer, which means that overall, you have a decline in the number of people that can actually consume. As we know, in our society, if you’re a business and you run out of marketplace, you wither, you stagnate.
I think there are two very related issues here. We as a country, as a group of nations, we all have a vested interest in our citizens maintaining their status in society, being able to consume, being able to contribute, being active participants. Once we lose that, you end up with a series of corporations that are producing lots of services, lots of products, but nobody to actually buy those products or services or to consume them. It’s a dual issue here. It’s business and it’s government, and there needs to be attention paid to that. If you create a technology that obsoletes employees and obsoletes consumers, then what’s the point of the technology?
Olivier Blanchard: Exactly. Okay. As on the employment side, it’s what a communist would refer to as friction, at the very least. Even if every single worker who’s displaced by technology ultimately finds an equal or better opportunity to generate revenue and spend as they would as consumers, there is still, at the very least, some degree of friction to be expected, and that’s the hard part, especially if it’s five to 10 years instead of six months to make that transition.
I’m going to end this segment with one more point that I want to touch on because I think it’s also pretty important.
We’ve kind of talked about the worst-case scenarios, but I also want to address, I guess, a positive note, that a lot of this automation that we keep talking about that at one point was focused on replacing factory workers and is now starting to focus on replacing a lot of white-collar tasks that could help clerks and secretaries and customer service representatives and salespeople potentially disappear or have to find something else to do, a lot of these technologies, whether it’s RPA or other automation, are still very limited, still not particularly advanced or advanced enough to really be able to take over for us.
Fred McClimans: But they lack the [inaudible 00:18:05] as well.
Olivier Blanchard: Right. Do you want to address that real quick, in like two minutes, the two-minute version of why shouldn’t we be too worried right now? We need to start being worried, but why we shouldn’t panic just yet.
Fred McClimans: Well, certainly if you’re in an industry or looking at an industry that has undergone rapid transformation and the obsoleting of tasks in its entirety, and we can almost look back to the outsourcing boom back in the early 2000s where everything was going offshore and that literally did, it obsoleted jobs across the board. At least in the U.S., our economy paid a price for that, for that massive kind of shift there.
But when we think about automation today, most of the automation functions, they are very basic. They’re rudimentary. They’re not designed to obsolete everything that a person does. They’re designed to take what a person does and pull out those components that are repetitive, that are prone to error, or that are simply so time-consuming that they lack the focus or expansion. A good example there is in law where the research that’s required to find prior case law and so forth, that’s an extensive, very labor-intensive task.
That can be automated to a great extent, but what it doesn’t do is it doesn’t necessarily give you the … What’s the way to say it? It pulls the data together, but it doesn’t make the decision for you. The tasks that are being automated right now, they’re very if this, then that-focused. A lot of what people do is very creative. There’s that aspect of emotion, creativity, curiosity, and empathy that people bring to various job functions that these RPA tools and so forth they just can’t address because they’re not even close to that level there today.
Again, most of the tasks we’re automating relatively simple, and, in fact, they do free up time for people to actually be more effective and more efficient in their jobs and to accomplish more. I think the way to position this is right now, automation. It’s in its infancy. It’s going to expand and it’s going to have a tremendous impact, but we need to leverage that and need to think of this as a positive because it allows an individual to be increasingly more efficient, more productive, and to increase the workload capacity or the capability there.
I think that’s the best way to look at it. Yes, some jobs simply are going to be eliminated, but that’s where we kind of get into the issue of people need to be aware of this and they need to start thinking about what they’re going to do next. Then businesses need to be aware of this as well, and they need to have that mindset that says, “We’re going to take this automation tool and we’re going to expand our services, our products. We’re going to go deeper into areas that we could not get into before because we simply lacked the resources for it.”
Olivier Blanchard: Right. Maybe we need to have a more, I guess, proactive discussion in general. Not just in the tech industry, but just politically, culturally, professionally across all industries about the benefits of looking at this as human-machine partnerships. Right?
Fred McClimans: Yep.
Olivier Blanchard: So, we-
Fred McClimans: You have a book coming out on that.
Olivier Blanchard: Yeah. Exactly, exactly. Didn’t mean to turn this into a plug, but, yes, Daniel and I just finished writing a book on this. It’s very general. It doesn’t really get into the nitty-gritty aspects of this, but it does make the case for the benefits of human-machine partnerships as opposed to humans versus machines in the workplace and even in everyday life. One example, I guess, that’s really easy for people to understand that I think highlights what you just talked about is think about a doctor.
On the one hand, you could say that at some point, robots and AIs will replace doctors somehow, but the reality is that for the next few decades, what will actually happen is AIs will help doctors accelerate and improve the outcomes of diagnoses. They will handle a lot of the heavy lifting or the time-consuming, kind of menial work that they have to do, eliminate a lot of the problems and failures that doctors have by being too overburdened by all this other stuff, to help them get better diagnostics, better quality time with their patients, better time to reflect on the data and better data that they’re getting so that they can then treat the patients.
In other words, what AIs, machines, software, what all these technical tools allow doctors to do is to go back to being doctors instead of administrators. I think that’s kind of important, and if we can apply that same type of logic to every single job that isn’t just a repetitive task, like hammering a nail or turning a rivet, then I think we’ll have the right balance. If we start to think about it that way and if we start to talk about it that way, then I think that’s the type of application of automation that we’ll end up with. If we don’t talk about it, if we only talk about, hey, a machine’s going to take your job someday, then we’re having kneejerk reactions and we’re not building the kind of future that we should be building.
And with that, that’s going to have to do it for our discussion about the future of work automation and RPA, but I’m sure that we will pick up that topic again very soon, especially when our book comes out, which will be, hopefully, this late June, early July, so we will revisit this topic very soon.
It is now time, however, to focus on our Fast Five. Fred, since it’s just the two of us, I will let you do the honors. What is your first news story that caught your eye this week?
Fred McClimans: Keeping up with the theme of automation and intelligence here, I’m going to dive here briefly into what Walmart is doing. Everybody knows about Amazon’s Go concept stores, the idea of a retail outlet where you walk in, you pick things off the shelf, and you literally walk out the door. The automation involved there from vision systems and sensors, whatnot, identifies what you’ve picked off the shelf, the price for it, and charges you as you exit the store.
Walmart has been working on their own version of automation, and it’s a little bit different in their concept store. They now have a concept store that is open in Levittown, New York, and they’re using computer vision and cameras, artificial intelligence and whatnot, not to handle purchases but to better help employees restock shelves, gather shopping carts, and in general, provide a higher level of customer service to the customers in the store. The way they put it in their release is they’re trying to free workers, free them from the tasks that they don’t like to do, that are repetitive, and “focus on the tasks humans can do best, like helping customers.”
I think it’s a great approach. It’s good to see Amazon moving, sorry, Walmart moving into this space and coming up with some alternatives and showing how technology can actually be used to improve the customer experience here. We’re going to see how this works out with Walmart. I don’t think it’s necessarily a competitive threat to Amazon Go, and, in fact, more realistically, I think it has the opportunity to add value a lot faster than Amazon Go’s concept does itself.
That’s my first Fast Five.
Olivier Blanchard: Interesting. Okay, well, let me focus on Facebook for a moment. It’s never one of our podcasts without talking about Facebook. Facebook, as you know, is being sued by the FTC for a number of violations, and a rumor started circulating this week that Facebook and the FTC were approaching a possible settlement. One of the triggers for this rumor is that apparently, Facebook has been setting aside somewhere between $3 to 5 billion to cover whatever the settlements would involve with regard to penalties.
While this would be, I think, the single highest penalty, financial penalty for a tech company in the U.S. ever, it was interesting because when the announcement was made, Facebook stock shot up. I understand that they had fairly decent numbers and investors should be happy about that, but initially, I expected that such a powerful, not really a judgment against Facebook, but a financial penalty of this kind, even though an amicable settlement, would shake and maybe rattle investors a little bit, and it was the exact opposite.
It puzzled me for about a day, and then I started to realize that that amount of money, although it sounds like a lot, is not really that much money for Facebook. I think, and correct me if I’m wrong. I kind of halfway looked this up. I didn’t really dig as deep as I would in one of our research products, but I think $5 billion would be something like six or seven weeks of cash, Facebook, so it’s essentially more of a slap on the wrist. It’s going to sting, but it’s not necessarily the sort of thing that would make Facebook change its behavior.
One thing that I want our listeners to kind of think about is if penalties no longer are really a deterrent for behavior because the benefit of doing something outweighs the cost of doing it, then essentially, the FTC isn’t toothless necessarily, but it becomes almost complicit in shoring up bad behaviors by tech companies, and it’s something that we should watch very carefully and be aware of in the future. We’ll see what happens with that. The settlement, I don’t think … I haven’t checked the news in the last 10 minutes … hasn’t been finalized, but we’ll have to see where Facebook goes with any potential changes in toxic or anti-privacy behaviors following the settlement.
Fred McClimans: Yeah, that’s an interesting one, I think, because what it does show at least is that Facebook has the opportunity for relatively low cost to put some of these issues behind it, and I think that’s part of the reason why the street is excited about it.
Olivier Blanchard: Well, investors were relieved. It’s like, “Oh, it’s only going to be three to five billion. We’re good.”
Fred McClimans: Yeah. And then-
Olivier Blanchard: That’s not the message the FTC should be sending.
Fred McClimans: And they’ve been setting aside cash for it in anticipation. Go figure.
My second Fast Five, we’re set here. I’m going to stick with the retail theme of the first Fast Five with Walmart, and in this case, include Amazon and talk about Kohl’s. Kohl’s is a nationwide department store, and they have for a couple of years now been working with Amazon, rather than competing with Amazon, working with Amazon. Kohl’s had a number of Amazon’s pop-up stores, for example, where they were selling Amazon products in a Kohl’s store.
Last year, Kohl’s started actually doing, I thought, a kind of innovative approach here. They started accepting returns for Amazon products. If you have a big Amazon product, something you purchased and shipped to your house and you need to return that, individuals have to go through that process of repackaging, putting everything together, shipping it all out, and so forth. Kohl’s stepped in and said, “Hey, we’ll do that. Bring your product here. We’ll ship it back to Amazon and we’ll handle that return for you.” In turn, Kohl’s gets more traffic through their stores.
The program has worked fairly well, and they’re now expanding that close to 1,200. It’s 1,150 stores nationwide for this program, so good move for Kohl’s, good move for Amazon. I think what the really interesting part of this is, is that it highlights sort of an extension of the gig economy into the business space, what I’m calling the hybrid economy of businesses where the business model that Kohl’s was in before has now changed slightly. They’re doing something they did not do before. Amazon is leveraging Kohl’s footprint, their empty retail space and their logistics capability in-store to actually gain value for Amazon.
It’s sort of an interesting twist here. Go back five, six years, nobody would have anticipated that Kohl’s would be shifting their business model to include packaging and shipping from their store back to Amazon. I think maybe the best way to think of this is from a gig economy perspective, where this particular function that Kohl’s is doing for Amazon, it’s their side hustle. It’s their foray into the gig economy, and I expect to see a lot more of this in other areas as businesses recognize they need to not necessarily pivot in a whole big way, but sort of micro pivots to their business strategy to make sure that they are continuing to grow and to gain value out of what they’re doing and uncover new ways to drive revenue.
Olivier Blanchard: I’m surprised that Sears didn’t think of this two years ago. You know? It’s-
Fred McClimans: Sears didn’t think of a lot of things.
Olivier Blanchard: Yeah, that’s true. I wonder, though, if Amazon’s going to come to regret this, because if you make returns much easier for customers, you might end up with a lot more returns than you were getting. You might start to see a spike in returns for Amazon, and they might come to regret that decision.
Fred McClimans: Yeah, even run into that situation that Costco had. They had one of the most wide-open return policies ever imaginable when they started, literally bring anything back, and people abused that and they kind of pulled back on it a bit. I think the key here is there’s this one word that keeps popping up in the press releases surrounding this particular opportunity here, and that’s the word eligible, so expect certainly Amazon to kind of tighten up what’s an eligible return. We already know that Amazon does ding customers that abuse their return policy. Yeah, that’ll be a fun one to watch.
Olivier Blanchard: Cool. Good. Well, I have another fun one to watch. I have mixed feelings about this because on the one hand, I love Tesla and I’m a big fan of a lot of stuff the Elon Musk does, but on the other hand, it’s also a complete bluster, you know what. Tesla had a very strange week this week, starting with Elon Musk making all kinds of predictions and claims about what Tesla would do in the next few years. The one that really caught my eye was this prediction or this kind of moonshot of a million robo-taxis in 2020, which …
I’m not an expert in technology or anything. I’m just an analyst. I don’t think that’s realistic or feasible unless what he’s talking about is some kind of software upgrade to a bunch of Tesla models that are already out there. Even so, that would be a stretch and probably a misconstrued version of what robo-taxis actually would be. But Elon Musk made a number of announcements this week, this being one of them. Another one about his Tesla chip business, which is somehow going to do things that no other chip-maker is able to do right now magically. Also, mentioned that he was going to, in the next month or so, launch some kind of special insurance program for Tesla owners. But less than 48 hours later, the very late numbers from Tesla came out, and it turned out that they had 700-some million in net losses and that they were not really able to execute on their original plan.
On the one hand, I applaud entrepreneurs like Elon Musk for setting very high goals and making this dream and pushing the envelope of what’s possible, and he’s been wildly successful in some areas with that, but there is also a point where you kind of jump the shark and lose all credibility as a leader when you start making crazy claims and then 48 hours later prove that you can’t actually execute in the real world on your imaginary ideas.
I just wanted to bring that up because it was impossible not to mention it this week. Fred, if you have a 30-second comment on this, I’d love to hear it.
Fred McClimans: Yeah. No, he did make some very wild claims. I don’t think they have the manufacturing capability, especially given their losses right now, to actually by the end of 2020 have a million cars out there. Certainly, some of the earlier Tesla models are no longer in operation, and hitting that million mark, the only thing I can possibly think of is that, as you mentioned, it’s a software upgrade. Every car becomes a potential robo-taxi, and for whatever reason, every user out there, the owner of a Tesla vehicle decides, “Well, if I’m not using the car at night while I’m home, why don’t I put it out on the road and have it earn some coin?” That’s the only way I can think of this being remotely possible.
Olivier Blanchard: Which makes no sense because let’s face it, if I have a Tesla, would I want to just loan it out to strangers? Who cleans the puke in the morning? It doesn’t make any business sense. I understand where he’s going with this, but we’re not there yet, certainly not in 2020 anyway.
Fred McClimans: Yeah. The claims were made during an employee event and so forth. I think if he had tweeted all that stuff out originally just off the cuff, the SEC would be staring down at him again. Nonetheless, the claims did make their way out into the wild, so, yeah, this is just an unfortunate one for Tesla because it just tears away at the credibility that they have in the marketplace.
Olivier Blanchard: Yes, it does. But we’ll have a leaf blower soon, so that’s a …
Fred McClimans: Yeah.
Olivier Blanchard: All right, what’s our fifth and final Fast Five for this week?
Fred McClimans: Yes. Samsung, we got to talk about Samsung. Samsung is the leading supplier of memory chips out there today. They have a very strong position in the marketplace, but that marketplace is starting to dry up a little bit.
It’s a cyclical market, like most are, and recently, in fact, because of decreased spend in those areas, Samsung actually has seen prices for their DRAM and memory products decline. In fact, this last quarter, they’re saying that their profits, their operating profits, for the March quarter dropped 60%. That’s the worst decline they’ve had in more than four years.
To counter that, Samsung has decided they want to get into the logic chip space. They actually want to be the ore of the computing system itself, and to get there, they plan to spend $116 billion over the next decade. They’re targeting directly companies like Intel and Qualcomm. They want to be there, and they’re planning on expanding their capacity in that space and creating about 15,000 R&D and production jobs over the coming decade as well.
Olivier Blanchard: These are humans, right?
Fred McClimans: These are humans. These are humans, yes.
Olivier Blanchard: Awesome.
Fred McClimans: Not RPA or robotic or automated jobs, digital jobs. These are actual people. It’s an interesting move going into that space. I think if they can pull it off, it’ll be a great move for Samsung. I think competition in that area would be a good thing, and it would certainly be a strong benefit for Samsung. But there are a lot of problems with this moving into that space. This is an area where they really have not been a strong player in the past. It’s not something that you can simply throw dollars at. While I think they can certainly have an impact in that space, I don’t think that they can become a dominant player in that space as they are in the memory space today, but certainly one to watch.
Olivier Blanchard: Well, at least they’re giving themselves a decade, which is what-
Fred McClimans: Exactly, yes.
Olivier Blanchard: … for Tesla that gives itself 18 months.
Fred McClimans: Right.
Olivier Blanchard: Props to them for that. At least it’s a somewhat more realistic of a timeline. All right, so let’s move on. It’s always hard to just pick five. Most weeks have 15 stories that we’d like to cover, but these were definitely the top five on my list as well.
Tech Bites now. I’m going to actually hand it off to you this week because you’re the one who suggested it, and it has something to do with Alexa. What’s our worst story in tech for the week?
Fred McClimans: Yes. Well, we have sort of a tendency here to identify tech bite issues that over time just seem to get worse and worse. Maybe that’s just because we’re really good about finding things that bite in this industry, but this is a great example here. A couple of weeks back, we talked about the issue that Amazon had where Alexa was not only listening and recording portions of calls or conversations from people, but they were actually sharing that with an internal group at Amazon. Now the motivation for this is pretty clear, and it’s a positive one. They want to make Alexa as efficient and as effective as possible, and the best way to do that is to augment what the computer is doing with the human brain, which is still light years ahead of any computer system and Alexa out there.
However, it turns out that this particular program has a darker side to the dark side, and that is that when Amazon set this up, they gave access to a lot of data to the team members here. Including in that data is geolocation data of Alexa devices, the Echos and the Dots out there. There was a story in Bloomberg this week where they have spoken to a couple of members of that team, who confirmed that, “Yeah, we’re not sure why Amazon gave us this, but we have geolocations.” So, they could, in effect, hear a portion of the conversation and then locate that user’s physical address.
Through all of this, it’s just one misstep after another with Amazon and Alexa, and this is one that really isn’t necessary. The issue that they had with Amazon employees being able to hear portions of text, they assured us, hey, make sure that they can’t identify who that individual is in any possible way. Even that program, they should have disclosed that program upfront, and they never would have had an issue had they done that.
But this here, this is just one of those things you just got to take your palm and smack it against your forehead and go, “Why in the world would they do this?” other than they’re just growing so fast they’re not thinking about these kind of things and they need to take a step back and start to think about these kind of things because at a certain point, Alexa and Amazon starts to lose the digital trust component they have built up and the bottom falls out of the market here. But I guess on the positive side, this hasn’t slowed the consumer adoption. Go figure.
Olivier Blanchard: Right. Well, yeah, if the price is right, the price is right, and there is value to it. But this kind of brings back this common theme that we have on this podcast, which is that we really do need some kind of legislative action at some point, not to overregulate the space, but at least to create some guidelines by which some of these tech companies, whether it’s Facebook or Google or Amazon or Apple or whomever will at least have a checklist of things to look out for, like what do we have to make sure that we don’t do with all these products?
Fred McClimans: Yeah. The need for a GDPR-type program in the United States, the need for that increases every day, every day.
Olivier Blanchard: Yeah. Obviously, as we point out every week on the show. I don’t know if we’re raising the bar or lowering the bar for technology, especially when it comes to privacy, but whichever direction the bar is going, it’s moving there incrementally every week.
We have finally reached the last segment of our show, our crystal ball. As usual, the crystal ball typically has something to do with the main topic. The prediction that I want to make this week … Actually, it’s a question that I want to ask, but I’ll go ahead and make my own prediction, so it’s kind of a rhetorical question, and I’ll ask you, Fred-
Fred McClimans: A rhetorical crystal ball.
Olivier Blanchard: … to weigh in on this. A rhetorical crystal ball is .. Aren’t they all? … is whether automation will replace more human workers than they augment. I’m looking at not next year, not 2020 like Elon Musk, but, say, 10 years from now, so let’s say 2030. Will automation, including RPA, have replaced more jobs than it has augmented?
My answer to that question is no. I’m actually hopeful. I think that what we’re going to see is somewhere between a 70/30 and 80/20 shift, where the 70 and 80, basically that the larger proportion of jobs will have been augmented by automation and only 20 or 30 percent of jobs will have been not necessarily killed or destroyed, but at least displaced or shifted into a different direction by automation, which is by no means a small thing. But I still think that there’s more positive in the end, or at least in the next 10 years, for the growth of this.
How do you see it working out in the next decade?
Fred McClimans: Yeah. Over the next decade, if we look at it really from a software automation-type function here, because when we’re talking about ideas like RPA, it’s software. It’s not something physical. It’s not a device or a robot that’s picking up trash, cleaning the streets, and so forth. All in software. So, 10 years out, I think that automation augments more jobs, far more jobs than it actually displaces, and I’ll follow that up with the idea that I think there’s a risk, certainly, of jobs being obsoleted, but I think there’s even a greater risk potentially just in changing consumer habits, changing consumer preferences that obsolete probably just as many jobs.
A good example there is look at the decrease in drivers’ licenses for young people today versus 10, 20 years ago. Take a look at the purchasing habits for automobiles. That whole industry there is going to go through some massive transformation as people buy fewer cars in place. And that’s going to change the mix of automobiles and the type of automobiles that are manufactured and made, as well as economic downturns. Certainly, we can have that impact as well. I think from a software perspective, yeah, certainly I think we will augment and increase the capability for employees at a better rate than we do obsolete employee work.
Olivier Blanchard: I agree. Okay, good. Well, at least we end on a hopeful note, for the most part, but it doesn’t mean you should be lazy and just kind of figure that your job’s not going to be replaced by automation. If you’re in any kind of job, no matter how technical or not technical out there, I would at least start thinking about skills, especially technical skills, that you might be able to acquire, and I would start being proactive about the types of technologies that can augment you in your everyday job so that you maintain the initiative in that area as opposed to letting your employers take the initiative away from you.
Fred McClimans: Yeah. Olivier, to that point, just about every automation-focused provider out there, whether it’s in the RPA space or higher up the stack in intelligent automation, in AI tools, they offer just a wealth of, on their site, services, information, tutorials, things that can actually help people learn about what automation is. In fact, go to the UiPath website, uipath.com, and they’ve got a portion of the site there where you can actually download and start to learn how to program these automation tools. There’s products out there like IFT and Series shortcuts that you can use in your mobile devices. There’s just a plethora of online courses available, everything from sites like Coursera to local colleges that can teach you about automation and about technology and how to be more effective and efficient in the job that you do today so you can better the job that you’re doing tomorrow.
Olivier Blanchard: We’ll put some of those links in the show notes if any of you are interested in that. That’s a good way to end the show, so that does it for this week’s edition of FTP. Thanks, Fred, for your contribution, as always.
Fred McClimans: My pleasure.
Olivier Blanchard: Thanks for listening to everybody out there who is. Don’t forget that subscribe button if you haven’t already, and catch us next week for another round of news and analysis about tech. Have a terrific week, everybody.
So for Fred McClimans and for our missing cohost, Daniel Newman, I’m Olivier Blanchard, thanking you for listening to this edition of FTP, Futurum Tech Podcast. There will be plenty of more tech topics and tech conversations right here. Please be sure to subscribe to us on iTunes. Join us, become part of our community. We would love to hear from you. Check us out at futurumresearch.com. We’ll see you later.
Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies. Read Full Bio.