Monthly Archives: June 2017

Are robots going to take our jobs? Will artificial intelligence make it even easier? How will automation really affect the global workforce and economy?

As these technologies have developed with increasing speed, it's not unnaturalno pun intendedto wonder about their impact on the lives of regular people (not to mention the companies they work for). Will automation free our time for leisurely pursuits? Or will we get even busier? And if we're so good at creating technology that does the work for us, will society create new support mechanisms to address that reality?

To learn more, Fortune asked six humansthree executives, a researcher, an economist, and a futuristhow automation will impact society. Here's what they said.

This is a sophisticated problem, and it demands a call to intellectual arms to not assume that its a binary situation. Its not just that jobs will be lost and that robots are taking over. Its much more sophisticated than that. Amy Webb, founder, Future Today Institute

How do we create a mentality of agility and continuous learning? Thats the challenge I see with a lot of this. Its very easy when youre 22 to make a career change. Its much harder in the middle of your career. The cost of transitioning is very high. Bret Taylor , CEO, Quip, a Salesforce-owned company

We need to keep relationship skills. I went to an automated, self-serve restaurant the other day, and I felt so empty when I left. Contrast that with my coffee shop. We are hard-wired for relationshipsyou want the smile, the connection. Leighanne Levensaler, SVP of corporate strategy, Workday

Most of us dont have the reflective time that allows us to be innovative and creative. So weve actually destroyed our capacity to go beyond computers. But computers are always going to be more efficient than us. For us to be better than technology, we have to find our inner human. Lynda Gratton, professor, London Business School

Theres a huge need to increase productivity around the world, the U.S. included, simply because of aging. Half of our economic growth has come from more people working: women in the workforce, growing population. That source is about to disappear. So we badly need to increase the economic output. One way to do that is to have the robots, the A.I., do the work. It has the potential to increase our productivity. And not only do we need robots working, but people too. So we need to make sure theres enough work for them to do. Michael Chui, partner, McKinsey Global Institute

Theres this assumption that its going to be people or robots, all or nothing. My experience is that it doesnt operate that way. Its automating part of the job, but not the full job. Repetitive, manual workno one whos doing it is really enjoying it. Technology replaces and creates. It replaces manual work and creates new opportunitiesnew tasks, if you will. And productivity creates growth, which creates new kinds of work. It is a virtuous cycle. Its so easy to talk about it in binary terms. I just dont think thats the reality. John Donahoe, CEO, ServiceNow

A version of this article appears in the July 1, 2017 issue of Fortune with the headline "Ready for the Robots?".

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Automation: How Humans Can Coexist With Robots at Work ... - Fortune

A new report from Paysa suggests automation jobs will put 10,000 people to work, and big companies will spend $650 million on annual salaries to make it happen. Sean Dowling (@seandowlingtv) has more. Buzz60

Chiquola Manufacturing Co. employees work with Whitin roving frames in Honea Path, S.C.(Photo: Gannett)

A 15-hour work week. That's what influential economist John Maynard Keynes prophesied in hisfamous 1930 essay"Economic Possibilities for Our Grandchildren,"forecasting that in the next century technology would make us so productive we wouldn't know what to do with all our free time.

This is not the future Keynes imagined.

Many higher income workers put in 50 or more hoursper week, according to an NPR/Harvard/Robert Wood Johnson Foundation poll. Meanwhile, lower-income workers are fighting to get enough hours to pay the bills, as shown in a University of Washington report on Seattle's $15 minimum wage publicized this week.

Yet some of today's best minds are making Keynes-like predictions. This month, Apple co-founder Steve Wozniak said robots will one day replace us but we needn'tworry for a fewhundred years.

In May, Facebook CEO Mark Zuckerberg told Harvard's 2017 class that increased automation would strip us not only of our jobs but also of our sense of purpose.

Mark Zuckerberg told graduating students at Harvard, the university he dropped out of to create Facebook, to create a purpose for today's world. (May 25) AP

Automation. Artificial intelligence. Machine learning. Many experts disagree on what these new technologies will mean for the workforce, the economy and our quality of life. But where they do agree is that technology will change (or completely take over) tasks that humans do now. The most pressing question, many economists and labor historians say,is whether people will have the skills to perform the jobs that are left.

"We are moving into an era of extensive automation and a period in which capitalism is just simply not going to needas many workers,"said Jennifer Klein,a Yale University professor who focuses on labor history. "It's not just automating in manufacturing but anything with a service counter:grocery stores, movie theaters, car rentals ... and this is now going to move into food service, too.

"What are we going to do in an era that doesn't need as many people? It's not a social question we've seriously addressed."

Instead of worrying about the mass unemployment a robot Armageddon could bring, we should instead shift our attention to making sure workers particularly low-wage workers have the skills they need to compete in an automated era, saysJames Bessen, an economist, Boston University law lecturer, and author of the book Learning by Doing: The Real Connection Between Innovation, Wages, and Wealth.

"The problem is people are losing jobs and we're not doing a good job of getting them the skills and knowledge they need to work for the new jobs," Bessen said.

Addressing this skills gap will require a paradigm shift both in the way we approach job training and in the way we approach education, he said.

"Technology is very disruptive. It is destroying jobs. And while it iscreating others, because wedont have an easy way to transition people from one occupation to another, were going to face increased social disruption," he said.

In this new age, Bessen said, we can't treat learning as finite.

"We need to move to a world where there is lifelong learning," he said. "You have to get rid of this idea that we go to school once when were young and that covers us for our career. ... Schools need to teach people how to learn, how to teach themselves if necessary."

A universal basic income (UBI) has been proposed as one possible solution to the loss of jobs caused by automation. A UBIwould give everyone a fixed amount of money, regularly, no matter what. Proponents say not only would it help eradicate poverty, butit would be especially useful forpeople whose jobs are eliminated by automation, giving them the flexibility to learn new skills required in a new job or industry, without having to worry about howthey'd eat or pay rent.

Some also suggest it would breed innovation. In his Harvard speech, Zuckerberg told the audience:"We should have a society that measures progress not just by economic metrics like GDP, but by how many of us have a role we find meaningful. We should explore ideas likeuniversal basic incometo give everyone a cushion to try new things."

Several countries are exploring or experimenting with a UBI, including Kenya, Finland, the Netherlands and Canada.

Americans have been worrying about automation wiping out jobs for centuries, and in some occupations, automation has drasticallyreduced the need for human labor.

But the relationship between automation and employment is complex. When automation replaces human labor, it can also reduce cost and improve quality, which, in turn,increases demand.

Marlin Steel in Baltimore was able to stay in business by automating its processes to stay competitive when many other manufacturing jobs went overseas. Video by Jasper Colt, USA TODAY

Such was the case in textiles. In the early 19th century, 98% of the work of a weaver became automated, but the number of textile workers actually grew.

"At the beginning of the 19th century, it was so expensive that ... atypical person had one set of clothing," Bessen said. "As the price started dropping because of automation, people started buying more and more, so that by the 1920s the average person wasconsuming 10 times as much cloth per capitaper year."

More demand for cloth meant a greater needfor textile workers. But that demand, eventually, was satisfied.

When ATMs were introduced in the 1970s, people thought they would be a death knell for bank tellers. The number of tellers per bank did fall, but because ATMs reduced the cost of operating a bank branch, more branches opened, which in turn hired more tellers.U.S. bank teller employment rose by 50,000 between 1980 and 2010.But the tasks of those tellers evolved from simply dispensing cash to selling other things the banks provided, like credit cards and loans. And the skills those tellers had that the ATMs didn't like problem solving became more valuable.

Whencomputers take over some human tasks within an occupation, Bessen's research showsthose occupations grow faster, not slower.

"AI is coming in and its going to make accountants that much better, its going to make financial advisers that much better, its going to make health care providers that much more effective, so were going to be using more of their services at least for the next 10 or 20 years," Bessen said.

These examples, though, are of occupations where automation replaces some part of human labor. What about when automation completely replaces the humans in an entire occupation? So far, that's been pretty rare.Ina 2016 paper, Bessen looked at271 detailed occupations used in the 1950 Census and found that while many occupations no longer exist, in only one case was the demise of an occupation attributed mostly to automation: the elevator operator.

A 2017 report from the McKinsey Global Institute found that less than 5% of occupations can be completely automated.

History has taught us a lot about how automation disrupts industries, though economists admit they can't account for the infinite ways technology may unsettle work in the future.

When a new era ofautomation does usher in major economic and social disruption which Bessen doesn't predict will happen for at least another 30 to 50 years it's humans that will ultimately decide the ways in which robots get to change the world.

"It's not a threat as much as an opportunity," he said. "Its how we take advantage of it as individuals and a society that will determine the outcome."

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Robots stealing human jobs isn't the problem. This is. - USA TODAY

BENGALURU: Genpact does not believe in balancing out the im pact of au tomation on its top line as the bene fits far outweigh the losses, the CEO of the business pro cess management (BPM) company told ET.

BPM companies are typically considered to be the first in line to be hit by automation, as a more people-intensive business is replaced by software robots and platforms. "You shouldn't try to balance it out. Clients are looking to us to help them transform themselves and if in that process revenue reduces, then it is all right. We are such an under-penetrated company that the opportunity is very large," NV 'Tiger' Tyagarajan, told ET.

"In some global clients, we are actually growing at about 19% but when we give back the gains from automation, we grow at about 13%." Genpact has launched a new plat form that combines analytics, automation and artificial intelligence.

The platform, called Genpact Cora, is built using the company's original process and industry domain knowledge with new digital capabilities from its acquisitions of Rage Frameworks, PNMsoft, and others.

"We believe this is a unique industry platform that combines automation, analytic engines and artificial intelligence. It is modular and includes governance around the implementation," Tyagarajan said.

The platform can be sold with a number of ways of pricing, including transaction-based and outcome-based pricing. There will also be a component of licensing fees as part of the contracts, Tyagarajan said.

Genpact has acquired artificial intelligence services provider Rage Frameworks and insurance service company Brightclaim in the last six months. Genpact has raised its guidance for 2017, helped by its acquisitions. It expects revenue of $2.63-2.70 billion in 2016.

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Genpact: Automation benefits outweigh losses, says Genpact CEO ... - Economic Times

Distribution utilities of all types globally are facing a wide range of new challenges and opportunities brought on by greater customer expectations and enhanced reliability needs. As distributed energy resources (DER) proliferate, new approaches and technologies for managing these new generation resources will add to the complexity of automation approaches at the substation and feeder levels, as well as on low-voltage (LV) transformers at the edge of the grid. Thus, there is a growing need for more intelligence, control, and agility in the distribution grid, particularly at the edge, where many new DER systems are located.

To date, utility automation efforts at the distribution level have been largely focused on issues caused by reliability mandates, outage penalties, customer expectations, electric vehicle (EV) charging, renewables intermittency, shifting loads, capacity constraints, and bi-directional power flows. In the longer term, automation further down in the medium-voltage (MV) and LV network will enable the proactive development of markets for aggregated clean resources and services, service-oriented business models, and end-to-end integrated grid management strategies.

Distribution level automation applications

Distribution automation (DA) and substation automation (SA) technologies and strategies are being adopted to increase the level of monitoring, intelligence, and automation across the distribution grid. These automation solutions can be divided into three major segments:

Substation automation at the distribution level is accelerating, particularly in North America, with many utilities deploying fiber communications to accommodate advanced technologies and software systems. Nonetheless, Navigant estimates that distribution level substation connectivity and automation penetration remains well below 50%, and in the 10% to 20% range or less in developing regions.

To date, feeder monitoring and automation is limited at best, though forward-looking utilities such as Eversource, Florida Power & Light (FPL), Los Angeles Department of Water and Power, Oncor, and others have been deploying sophisticated outage restoration and automation systems.

For example, Eversources (formerly NSTAR) 20092014 Grid Self-Healing and Efficiency Expansion project involved the deployment of two-way communications infrastructure and DA equipment on 400 circuits in its Massachusetts territory. New switches, sectionalizers, reclosers, and condition monitors were installed to enable automatic detection and isolation of power outages, followed by rapid restoration. The project included LV feeder monitoring in Boston, high-speed fiber optic rings for reliability, monitoring, and control, web-based outage reporting, and a new outage management system.

Market Outlook

Distribution utilities of all types are now implementing distribution substation, feeder, and transformer automation technologies and solutions. Navigant Research expects Europe to be the largest regional opportunity over the next several years due to feeder system design characteristics. Currently, the region represents more than half of global DA and SA market revenue.

However, the opportunity is relatively short term and tails off after 2021, when major feeder and transformer automation projects are expected to be completed. In all other regions, distribution substation, feeder, and transformer automation revenue is expected to increase steadily through 2025.

Navigant Research expects global cumulative DA and SA revenue for all technologies to reach $109.1 billion between 2016 and 2025. The annual revenue opportunity is projected to grow from $7.6 billion in 2016 to a peak of $12.5 billion in 2021, and then drop to $12.2 billion in 2025. The overall 20162025 compound annual growth rate (CAGR) is expected to be 5.5%. Chart 1.1 shows the growth in annual revenue for the 10-year forecast period by global region.

Regional Trends

The key market drivers in North America for increased automation at the distribution level are concentrated around improving reliability, addressing aging infrastructure, changing cost recovery mechanisms, increased visibility into feeder operating parameters, AMI installations, and (to a certain extent) new distribution feeder system and substation construction.

At present, 4050% of MV substations have some level of automation, and upgrades to more sophisticated control and automation capabilities are being planned.

Feeder automation remains nascent generally, but at FPL in Florida, it became a high priority, as the region is subject to the most lightning strikes in the United States; these storms were a primary cause of faults in FPLs distribution network. Particularly in remote rural locations and swamps, restoration was time-consuming and costly. In response, FPL elected to complete a system-wide feeder automation improvement project and selected S&C Electric to provide equipment and installation services. The company deployed S&Cs TripSaver II cutout mounted reclosers, which deliver decentralised, intelligent, and autonomous restoration capabilities, across more than 80,000 feeders in its service territory. The project was notable because it covered FPLs entire network; most feeder automation projects to date are feeder-specific and focus on particularly troublesome segments of the network.

In Europe, the MV substation situation is much different from that in North America. Across many of the countries in Western Europe, the MV substation fleet is 95100% automated already, though much of the automation may be first generation systems with limited capabilities. Upgrades from early SCADA to more powerful DMSs can be expected to occur.

That said, much T&D system expansion is occurring as Europes regional operators reconfigure their networks for large-scale penetrations of DER and large investments in LV transformer substation monitoring and control, as well as feeder monitoring, can be expected. lectricit de France (EDF), for example, is planning LV transformer monitoring and automation across 700,000 or more transformers the majority of its fleet by as early as 2020. And Spanish DSO Iberdrola Distribucin is implementing its multiyear Network Remote Management and Automation Systems (STAR) project, which has been focused on network remote control and automation in MV substations, as well as on LV transformers and distribution feeders. Once completed in 2018, this $2.2 billion project will monitor and automate approximately 80,000 transformer substations and deploy over 10.3 million smart meters.

Key DA and SA drivers in Asia Pacific include the epic expansion of the T&D system and substations to address both rural electrification and large-scale urban expansion, as well as to replace ageing infrastructure. With a large number of new projects driven by electrification, most if not all new installations will be monitored and (to some extent) automated systems.

The Asia Pacific DA and SA market can be divided into three major territories, each representing approximately one-third of the regions total market size: China, India, and everywhere else. The DA market in China is led by the countrys Strong and Smart Grid initiatives. Although this market continues to grow, China is notoriously difficult for outside commercial vendors to access, due to price pressure from in-country vendors.

Examples of success in China often include partnerships with Chinese companies. For instance, General Electric (GE) has established a partnership/joint venture with the XD Group, providing local content and presence.

India is experiencing similar price pressures as China, thus giving lower-cost local products and integrators like Tata, Infosys, and Wipro a significant advantage; here too, local partnerships are essential. However, India has fewer centralised protectionist politics compared to China, which has made it easier for international vendors to compete.

The third Asia Pacific segment, Southeast Asia, Australia, and New Zealand, is still widely accessible. Australia and New Zealand were early adopters in terms of smart grid technology deployments. However, local economies have been weak in recent years, dampening demand. That said, Australia has become a major market for distributed solar; rapidly increasing penetration of variable renewables supplies in Australia will force distribution network upgrades.

Conclusions

The days of a largely electro-mechanical distribution system maintained by crews in trucks are giving way to a highly connected, automated, smart grid. Connectivity options are increasingly attractive and necessary to support sophisticated software and analytics solutions which improve grid reliability, operational efficiency and flexibility. Especially as the traditional ratepayer, cost-plus business model is replaced by a system more focused on efficiency and services, distribution utilities will find themselves increasingly dependent upon automation solutions to meet the needs and demands of customers and regulators. As such, investment in these technologies is expected to grow throughout the coming decade. MI

ABOUT THE AUTHOR

Richelle Elberg is a principal research analyst contributing to Navigant Researchs Utility Transformations program and heading up the Smart Grid research services, including Connected Grid, Digital Grid, and Dynamic Grid. Her primary focus is on communications networks for utility applications, including AMI and substation and distribution automation applications.

Elberg has more than 20 years of experience in the telecommunications industry, including an extensive background analysing and writing on the wired and wireless communications industries from operational, financial, strategic, technical, and regulatory perspectives.

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Shifting demands driving automation in the distribution grid - Metering International (subscription)