The robots are coming

Robots are edging out humans in the workplace

The moment you hit the “buy with one click” button on amazon.co.uk, a squat, orange-coloured robot whirrs into action at the CWL1 fulfilment warehouse near Swansea.

It zooms to the far corner of the warehouse – which is the size of ten football pitches – and picks up a six foot tall shelf, laden with products.

It then carries the entire shelf to the edge of the “human exclusion zone”, dodging other robots on the way, where a member of Amazon’s staff picks out the item you’ve purchased and sends it for shipping. In all, it takes 15 minutes from click-to-ship.

The orange robot works 24 hours a day and it fulfils four times as many orders as a person. It’s a winner for Amazon – that’s why it bought Kiva, the company which makes the robots, back in 2012.

Clearly, automation can raise productivity and efficiency by leaps and bounds, but it does destroy jobs in the short term. It’s a massive issue for all workers in the next few decades, whether they’re blue- or white-collar. And it’s a huge opportunity for investors.

First, they came for the factory workers

The first thing I’d say is that we can’t have it both ways. Amazon faced a lot of criticism recently about the employment terms of its warehouse staff, the distances they walked each shift and the speed at which they were expected to pick orders. So presumably, we should be pleased that people are being saved from such physically demanding jobs by automatons.

And in the UK at least, workers have found other opportunities. Employment here in the UK has been holding up far better than many expected. The number of people with a job is actually at an all-time high of nearly 30 million. This is partly due to the underlying economy being in better shape than most commentators would have us believe.


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It’s also due to our flexible labour market. We might not like ‘zero hour’ contracts or temporary workers, but at least they price people into jobs. It can make labour a more flexible and lower cost option than buying a software licence or installing automated equipment, which are expensive capital items.

Automation is a stunning investment opportunity

I think the bigger problem is in middle-ranking white-collar jobs. The wage statistics show that despite good employment numbers, wages have barely risen. So we seem to have plentiful ‘McJobs’ on the one hand and a small number of very highly paid roles on the other.

It does seem likely that technology is chipping away at those middle-income jobs that most of us would have thought safe from being stolen from us by machines.

One of my Red Hot Penny Shares tips is a speech recognition and payments company. When you phone your local cinema, you speak to a machine, rather than being held in a queue waiting for an operator to come free.

You can find out what time your film is showing, order the tickets and pay for them. All without human intervention, and by talking in normal conversational language.

No having to choose which number to press from a long menu or being left on hold while being told how important your call is. More customers are handled more quickly and payment is taken efficiently and securely.

Jobs in customer relations and telesales are clearly at risk from this sort of innovation. Companies invest in them not just to save costs and be more efficient – their customers actually prefer the quality of service from the computer.

Automation is also spreading to a lot of clerical and professional work. I’ve written a lot about the investment implications of ‘big data‘ – the impact of massive, affordable computing power and its delivery via the cloud. It’s going to be easing a lot of data analysts, marketers and even lawyers out of their jobs.

So what will all these people do when they become surplus to requirements? The short answer is: something else. Human ingenuity and market forces will direct them down new paths and into new roles. The problem in the short term is that such change is unsettling and challenging. But one thing looks certain – this isn’t going away.

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2 Responses

  1. 26/03/2014, John Brown wrote

    Interesting.
    All my life I have either automated things or taught other people to do it. Until 5 years ago when I was made redundant, not because I had been automated, but because the criminal bankers had destroyed our economy.

    On SkyTV I watch “How Things are made” with great interest. But go round the Birmingham Technology museum and you will see similar machines dating back to 1880, for example for making metal buttons.

    Now its all information-based, and threatens middle-class jobs.

    I write computer software to do it at home, but in the current climate cannot get a UK company to back me. So I am going to sell directly to the user, via my website which iPage host for me at £82 for 3 years.

    How many of the 800 million native English speakers out there can I sell to?

  2. 29/03/2014, dr_rythm wrote

    The comforting idea that displaced workers in the robot revolution will simply do “something else” is as outdated as the steam train. This time it really is different and every sector in the workforce will be affected. The doubters might like to look up an article by Bill Joy titled, “Why The Future Doesn’t Need Us.” They might also like to take a look at developments in humanoid type robots at Boston Dynamics. They should also try to imagine the future capabilities this primitive prototype in say 10, 20 and 30 years from now. Of course if you prefer to avoid feeling depressed then just don’t read about why Asimov’s rules for robots can’t protect us.

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