Updated: Jan 11
Currently we are in a business crisis within a health crisis. And who knows what else is looming beyond this health crisis? Shortly after the Spanish Flu, during 1920- 1921 the world experienced what is referred to as the Forgotten Depression. The causes have never really been clear, but most economists agree that it was a combination of the WW1 and the Spanish Flu. And more so the transition from wartime to peacetime. Well, we are not at war with anyone. But we are in a transition from the old economy to the new economy, that's been happening over the last couple of decades. Technology is the new economy. And it will continue to change how we conduct business, live and work. As long as companies look for more competitive advantages and ways to lower costs, technology will be at the forefront of change. Couple that with the consumers appetite for continued convenience and the latest in technology. The world as we know it, is no longer standing still.
Successful competitive economies, are technology driven and if they are not it is having obvious influences. Even subtle advances in technology are announced everyday and influencing change. Especially in industries like the Retail sector and Manufacturing. Everything from artificial intelligence (AI) is in software. Robotics is growing within factories, taking over tasks usually done by people. But before we start blaming technology for the loss of jobs, we must also recognize that competing in this new environment is simply ruthless. Businesses need to be fast and focused. In fact, I was in a distribution centre of pool supplier what I saw was chaos and certainly AI and robotics were non existent. There was no way this business could survive with this mess. The lack of technology was very evident but I doubt this company had a lot of longevity left in it given how it was operating.
The internet of things (IoT) has connected appliances to manufacturers, passing information to them and collecting the data. Augmented analytics decipher big data, block chain is used to protect and transfer data eliminating too many handlers. What's done with this information? Companies improve product performance through innovation. They learn how to improve benefits and features of products to satisfy customers. And retailers learn faster about consumer preferences. Then we have Chatbots and natural language processing, machines are learning to speak and have conversations online when you are buying and looking for help. Even in our transactions whether online or offline, financial institutions know where you have been, bought and how much you spent. The information being collected is a commodity where some would pay a high price to know about your shopping behaviours are. Information is the new currency. Without it businesses will flounder. Unfortunately, not all businesses will every benefit from this level of data collection not without resources; that being technical, intellectual and financial. In a way we will end up with have and have not businesses with the latter having to work much harder physically to grow and keep customers.
Is technology growing faster than human skills?
Machines are getting faster and smarter and they do reduce the need for human productivity. But they are also able to save lives in cars, workplaces, they can sense dangerous gasses and provide warnings. There is a fear that with the pandemic businesses are going to adopt more technology to remain competitive. However, in every economic shift or crisis we have been through, there is always a push for lowering costs and most of that comes from increased productivity through the introduction of technology. But not all jobs are at risk and it is believed that workforces can be retrained to work with new technology as it continues to evolve. The challenge for most workers will be can they learn it?
More than anything technology is challenging industries to evolve. There is a need to improve our efforts in protecting the environment. The auto sector is already beginning to see changes and that will impact other industries associated with automobiles over time. What I am referring to is the growth of electric cars. But don't feel threatened not yet. There are over 1.2 Billion cars in the world being driven today. In 2019 we built 92 Million cars globally. All of us would have to convert to an electric car and it would take 13 years to get there. That's not going to happen that fast, it could be 30-50 years.
However, there is a real shift that will transform some industries and shutdown others. These advanced vehicles such as Tesla are connected to a neural net collecting data, the self driven versions are both AI and robotic. I am sure it will only be a matter of time before Musk has the cars talking to us. By the way, Tesla's market cap is $834 Billion that's worth more than; Toyota, VW, Daimler, GM, BMW, Ford, Chrysler, Honda, Hyundai and Nissan put together!
Should We Be Worried?
Just this week the Canadian Government announced that we lost about 63,000 jobs. The jobs that we have been losing are mostly service jobs in the retail and restaurant sectors. The problem in this kind of economic environment, where businesses are shut down or operating under restrictions the concern is that business failures will accumulate. And jobs will be lost permanently. On the other hand e-commerce has been accelerating in growth, again an AI and robotics supported industry that has simplified buying, lowered prices, and created convenience. Jobs are being created here but you are either working in technology or a warehouse.
Not all businesses have been able to transition into the digital world, costs and lack of intellectual resources make it cost prohibitive for many. The most any can do is invest in a website because of the pandemic, they have been forced to adapt very quickly to other forms of sales and service. Because e-commerce has been a major shift for consumers for ordering what they need whether thats essentials or nonessentials during the pandemic. The biggest concern for jobs is not technology its the consumer, how soon will they comfortably return to old shopping behaviours and even simply going out to dinner and a movie.
Technology is the new economy and information is the new currency and it has changed how businesses in all categories will behave and interact with one another and consumers. There is no going back the pandemic has paved a very clear road for everyone.