ENROUTE
an editorial opinion

In the future these could be the good old days

By Marvin Cetron
President, Forecasting International


TOPIO, a humanoid robot that played table tennis at the Tokyo Intl Robot Exhibition in 2009, foreshadowed the rise of machines with near-human intelligence.

Today, those problems are finally past. Development of oil shale is finally reaching a useful scale. Perhaps ironically, it now seems that tomorrow's largest oil producers will be 2 countries that formerly had to depend largely on imports—the US and Israel.
Unfortunately, the world's other great resource need remains unmet. We are running out of potable water.

Persistent, repeating drought has destroyed agriculture in the American southwest. Cities from Houston to Las Vegas face perpetual shortages. California's annual water deficit equals its total consumption in 2011.

Parts of northern China are nearly uninhabitable, despite the construction of enormous canals in the past decade to bring water to this parched region. Beijing has begun to shift tens of millions of people to the south, where water is easier to come by. But half a billion people live in the water-stressed area.

India's demand for water now exceeds its supply. And in parts of Australia, agriculture has become nearly impossible because water for irrigation has been exhausted—this despite the periodic flooding that afflicts the country.

According to the United Nations, 2 out of 3 people in the world will be living under conditions of "water stress" by 2025, just 4 years from now. Twenty years ahead, at least 3.5 billion people will face severe shortages.

In the US, water shortages now cut about 0.5% from yearly economic growth. In growing portions of the world, they kill as many as 10 million people per year.

Technology

We used to think of technology as a force that created jobs—or at least created more jobs than it cost. By 2011 that was no longer true. It had not been true for at least 20 years. We can see the evidence in the time it took to replace lost jobs after each recession. Before the recession of 1981, the longest it had taken was 24 months. After 1981, it took 27 months. After 1990, it was 31 months.

Losses in 2001 were not replaced until 46 months after the previous peak. And after the recession of 2007–08, economists said it would take about 84 months to create as many new jobs as the American economy had lost. In fact, it took until 2018, and the jobs lost in the recession of 2013 were never replaced.

Since at least the late 1980s, technology has eliminated more jobs than it has created. After each recession, companies hire as few people as they can as slowly as they can. Instead of hiring, they buy computers, software, automated production equipment, robots, and other technologies to increase the productivity of the employees already on staff. This is why it took longer and longer to replace jobs after each recession. It's why employment in the US and other industrialized countries has plateaued since 2018.

We can see the evidence in productivity figures. In the decades before 2000, productivity in the US grew by an average of 1.6% per year. Between 2000 and 2010, it grew by 2.0% annually. Since the recession of 2013, it has grown by 2.1% per year.

When productivity grows by 2%, it means that companies can get the same amount of work done with 2% fewer employees. So long as the economy grows by less than 2% per year, as it has done almost every year since 2011, jobs are lost.

There are factors operating here besides technology. Since at least 2000, salaried employees have been taking more of their work home and getting it done after hours—but productivity figures are still calculated as if they were doing it on the job. In addition, companies have been redesigning their business processes for greater efficiency—but in large part that means incorporating more technology into them.

The growth of biotechnology and nanotechnology in the past 10 years has expanded economies throughout the developed world without adding many jobs to them. Although it takes highly trained technicians to produce genetically engineered medicines and mechanisms that cannot be seen without a microscope, it does not take many of them.

And all the production processes are highly automated.

High-tech communications, robotics and artificial intelligence have brought the greatest changes. They continue to transform the world.

In an economy that is based increasingly on information, communications replaces transportation. If your job is crunching numbers, writing ad copy, or designing clothes or buildings, it no longer matters where you are located. You can get whatever data you need and send your information product to your coworkers or clients over the Net.
This alone is responsible for many of the changes we have seen since 2011.

Many American cities are starting to shrink for the first time in history because information workers can live wherever they please, and many of them prefer smaller cities and towns. This has reduced demand for urban mass transit and reduced the time lost through rush-hour traffic jams. In the process, it has slowed the growth of demand for gasoline and for electricity to power urban minicars.

This trend has begun to cut demand for many professionals. It takes fewer doctors to meet with patients when they can gather most routine information and many test results through a smartphone. Similarly, the rise of Internet-based universities has reduced the number of tenured professors needed to give lecture courses and made it possible for adjunct faculty in distant regions to grade papers and provide individual assistance to students.

Artificial intelligence (AI) has had even greater impact. As far back as 2009, newspapers had begun buying their sports stories from services that provided articles written entirely by computer. By 2011, more than 4 million such stories had been published. Readers never knew the difference.

IBM's Watson technology was one of the first computer systems that could answer human questions written in natural language quickly and accurately. It became famous in 2011 when it easily defeated the best human contestants on the television quiz show Jeopardy!

But it caused a revolution when medical information specialists used it to scan medical records, suggest possible diagnoses based on the patient's symptoms, and recommend tests to confirm its ideas. Computerized diagnoses today are often better than those of human physicians because the computer has access to the latest medical research, never overlooks a procedure, and never forgets what was learned.

By 2014, most of the medical knowledge that put physicians at the top of the healing professions was available to any nurse, technician, or even patients themselves. Demand for doctors in fields such as geriatrics had been expected to soar. Instead, it remained flat, and healthcare managers have been wondering whether the US really needs all the medical schools it has.

The legal profession has been hit even harder. By 2011, the US already had a significant surplus of attorneys. Skilled litigators and tax specialists remained in demand, but the old-fashioned family lawyer was being replaced by Internet legal services. A decade on, natural-language AI systems can carry out most legal research, provide tax advice more accurately than most human specialists, and prepare even the most arcane filings.

Demand for lawyers and legal assistants has plummeted in the past 10 years.
We see a similar trend in aviation. Virtual reality (VR) conferences are replacing in-person meetings for most routine business functions, so executives travel less. Demand for corporate aviation is stable and may even have begun to decline.

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