Monthly Archives: June 2017

All the signs now point to a strengthening and broadening recovery in the euro area, Mr. Draghi said. His comments pushed the euro to almost its highest level in a year, though it later gave up some of the gains.

But along with the optimism is a fear that the economic expansion might bypass large swaths of the population, in part because a growing number of jobs could be replaced by computers capable of learning artificial intelligence.

Policy makers and economists conceded that they have not paid enough attention to how much technology has hurt the earning power of some segments of society, or planned to address the concerns of those who have lost out. That has, in part, nourished the political populism that contributed to Britains vote a year ago to leave the European Union, and the election of President Trump.

Generally speaking, economic growth is a good thing, Ben S. Bernanke, former chairman of the Federal Reserve, said at the forum. But, as recent political developments have brought home, growth is not always enough.

In the past, technical advances caused temporary disruptions but ultimately improved living standards, creating new categories of employment along the way. Farm machinery displaced farmworkers but eventually they found better paying jobs, and today their great-grandchildren may design video games.

But artificial intelligence threatens broad categories of jobs previously seen as safe from automation, such as legal assistants, corporate auditors and investment managers. Large groups of people could become obsolete, suffering the same fate as plow horses after the invention of the tractor.

More and more, we are seeing economists saying, This time could be different, said Mr. Autor, who presented a paper on the subject that he wrote with Anna Salomons, an associate professor at the Utrecht University School of Economics in the Netherlands.

Central bankers have begun examining the effect of technology on employment because it might help solve several economic quandaries.

Why is workers share of total earnings declining, even though unemployment is at record lows and corporate profits at record highs? Why is productivity the amount that a given worker produces stuck in neutral?

The mere fact that we are organizing this conference here in Sintra testifies to our interest in that discussion, Benot Cur, a member of the European Central Banks executive board, said in an interview, referring to the Robocalypse debate.

Of particular interest to the European Central Bank is why faster economic growth has not caused wages and prices to rise. The central bank has pulled out all the stops to stimulate the eurozone economy, cutting interest rates to zero and even below, while printing money. Four years of growth have led to the creation of 6.4 million jobs. Yet inflation remains well below the banks official target of below, but close to, 2 percent.

One explanation is that more work is being done by advanced computers, with the rewards flowing to the narrow elite that owns them.

Still, among the economists in Sintra there was plenty of skepticism about whether the Robocalypse is nigh.

Since the beginning of the industrial age, almost every major technological innovation has led to dire predictions that humans were being permanently replaced by machines.

While some kinds of jobs were lost forever, greater efficiency led to more affordable goods and other industries soaked up the excess workers. Few people alive today would want to return to the late 1800s, when 40 percent of Americans worked on farms.

Robocalypse advocates underestimate the power of scientific advances to beget more scientific advances, said Joel Mokyr, a professor at Northwestern University who studies the history of economics.

Think about what computers are doing to our ability to discover science, Professor Mokyr said during a panel discussion, citing computers that can solve equations that have baffled mathematicians for decades. There may be breakthroughs that we cant even begin to imagine.

There are other explanations for stagnant wages besides technology.

Companies in Japan, the United States and Europe are sitting on hoards of cash, doling out the money to shareholders rather than investing in new buildings, equipment or innovative products. Just why is another topic of debate.

Hal Varian, the chief economist at Google whose self-driving technology may someday make taxi drivers unnecessary said that the plunging cost of information technology has virtually eliminated the fixed cost of entering a business. Companies can rent software and computing power over the internet.

And flat wages reflect the large number of women who have entered the work force in recent decades as well as the post World War II baby boom, Mr. Varian said, adding that those trends have run their course. We are going to see a higher share going to labor, he said.

Yet already, disruptions caused by technology help account for rampant pessimism among working-class and middle-class people across the developed world.

Mr. Bernanke referred to polls showing that about twice as many Americans say the United States is on the wrong track than say the country is moving in the right direction.

As a result, last November Americans elected as president a candidate with a dystopian view of the economy, Mr. Bernanke said.

Mr. Autor, co-author of the Robocalypse paper, concluded that it was too early to say that robots are coming for peoples jobs. But it could still happen in the future.

I say not Robocalypse now, Mr. Autor said, perhaps Robocalypse later.

Follow Jack Ewing on Twitter @JackEwingNYT.

A version of this article appears in print on June 29, 2017, on Page B4 of the New York edition with the headline: Robocalypse Now? Bankers Ask, Will Automation Kill Jobs?.

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Robocalypse Now? Central Bankers Argue Whether Automation Will Kill Jobs - New York Times

Zume Pizza, a food delivery startup in the San Francisco Bay Area, is expanding to a new location in the heart of Silicon Valley with the help of robotic companions. The company, which starting today will deliver fresh pizzas to Palo Alto and the Stanford area in addition to its hometown of nearby Mountain View, says it has pioneered a robot-assisted technique for pressing pizza dough in a perfect circle in just nine seconds.

That allows the operation to improve efficiency and let its human employees spend time on less tedious work, according to CEO and co-founder Julia Collins. We wanted to identify places where humans were overtaxed physically, bored, or whether the job they were doing was not safe, like sticking their hand into a 600 degree oven for six hours a day, Collins said in an interview with The Verge. Thats why we focused next on this practice of opening the dough.

The new robot, aptly named Doughbot, is now being deployed on Zumes robot-enabled pizza assembly line, where it does the job of pressing dough up to five times faster than even the most seasoned pizza spinning pros.

If this all sounds like an alien and absurd idea robots making pizza does look like overkill, at first glance its helpful to understand the full context of Zume Pizza and its food-delivery ambitions. The company, which first began delivering pizzas last year, was founded on two core concepts: robotic automation and on-route cooking. Robotic automation is easy enough to understand. Zume, which sources machines from industrial robot maker ABB, employs these devices for tasks like dispensing the perfect amount of sauce, spreading that sauce, removing pizzas from ovens, and, now, spreading the dough with just the right thinness and crust-to-pie ratio. The various robots work in unison with humans in an assembly line-style work space attached to the companys Mountain View facility.

Zume is one of a number of automated startups popping up in the Bay Area trying to fuse cooking with technology. For instance, Eatsa which now has a number of locations in California has made headlines in the past for letting you order healthy and low-cost quinoa-based bowls without interacting with a single human. These types of companies combine the on-demand ambitions of startups like DoorDash, Munchery, and Postmates with a kitchen technology twist, all with the aim of avoiding the typically heavy costs associated with food production and logistics. To that end, Zume has hired Susan Alban, who led the launch Ubers food delivery arm UberEats, as its new vice president of operations, Collins announced today.

Zume relies on both robots and on-route cooking to cut costs and speed up deliveries

For Zume, robots are just one aspect of the business. Its really the on-route cooking concept that got Collins and her co-founders excited years ago, when they first began applying for patents and churning through hundreds of thousands of dollars in legal fees to protect their inventions. Folks often go to the robots first, because robots are sexy, Collins says. But the founding idea of Zume was really cooking on route.

You see, Zume Pizza uses up to six specially designed delivery vehicles the size of FedEx trucks. Each one is outfitted with dozens of pizza ovens that can simultaneously reheat hundreds of pizzas, so that each one can be placed fresh and hot into the companys custom pizza box. That way, when someone orders pizza, it arrives in under 20 minutes.

We use predictive technology to make really high-fidelity bets on what pizzas people are going to order, Collins says. Early in the morning we produce a daily inventory of pizzas. We predict the total volume of pizzas and the types of pizzas that we need to satisfy that days demand. That way, Zume doesnt have to cook every pizza from scratch, while still managing to avoid the fast food pitfalls of serving precooked meals.

Zume predicts how many and what kind of pizzas it needs to make each day

The predictive factors at play range from simple stuff like time of day and day of the week to more complex ones like what sporting event or television premiere happens to be airing at the time. When demand gets too high, Zume stops going door to door for deliveries and parks its trucks. It then deploys a fleet of small Fiat vehicles and scooters to ferry the pizzas out in a more efficient manner.

Zumes ultimate goal is to make fresh, locally sourced food at reasonable prices by aggressively rethinking the costs of running a food operation dependent on delivery. Zume pizzas are priced between $10 and $20 for a single pie, and the company uses up to 60 ingredients to offer gluten-free and vegetarian options, as well as artisan-style pizzas with ingredients like arugula pesto, asparagus, and ricotta.

All ordering is done through the companys mobile or website. There is no storefront. So rather than paying 10 percent of sales in rent, we pay 2 percent of sales in rent, Collins says, while robots increase our production volume.

This is what allows Zume to keep costs down without relying on contractors, like so many of the Bay Area-based food delivery startups (and ride-hailing apps). Collins says Zume has around 115 full-time employees, all of which receive benefits like health insurance. As for whether these employees will all be automated away by robots, Collins stresses that the goal is never to fully automate the process of making and delivering food.

Our goal was never to have end-to-end automation. It was never, How can we have a pizza production operation that would have no humans? Collins says. Automation allows Zume employees to shift focus from laborious tasks to more creative ways, she adds. Our best pizza spinner is really happy to work on our menu and ingredient selection.

Our goal was never to have end-to-end automation.

This all sounds like the quintessential utopian dream of automation: a world where robots takeover only the most boring and physically taxing jobs and humans are free to perform creative and fulfilling work. Of course, theres no telling how well Zume will scale when it attempts to tackle a market as dense and complex as, say, San Francisco, which is undeniably the biggest target on the companys radar.

Theres also no telling how sophisticated artificial intelligence and robotics will be in just five years time. Whos to say ingredient selection wont be perfected by an algorithm? Driving Zumes trucks most certainly will be automated by self-driving cars at some point in the future, even if that practice is still decades away on a regulatory timeline.

But Collins is confident that Zume can lay the groundwork for the future of high-quality, tech-infused food delivery that doesnt treat human labor as an enemy. That her company employs only full-time workers, and its leadership so dedicated to keeping those employees from doing tedious tasks, seems like a promising step toward that dream.

We want to make sure everyone has access to high-quality, affordable food, she says of Zumes goal, and to use technology to solve Americans food problem. If that mission involves a robot that can press dough or spread sauce faster and better than a human being, can you really blame Zume for being the first to get out there and use it?

See more here:

Zume's robot pizzeria could be the future of workplace automation ... - The Verge

If you are struggling to create or maintain momentum in your automation initiative, the answer may be simpler than you think. Organisations that are successfully managing automation and digital service and transaction delivery are those who are creating and following an incremental approach that maps out where to start and how to evolve over time a digital roadmap, effectively.

Getting started with automation

First, the good news you are not alone. Without a digital roadmap, many across the industry are failing to cross the Rubicon to deliver transformed, digital services. The fact is that its still not uncommon to feel bombarded by automation technologies, not knowing how or where to start.

Or, you may be in the same boat as other companies who have made the leap into automation by buying licenses to drive various pilots involving process automation and other BPM tools, yet still finding it difficult to measure the effectiveness of these initiatives or to build on their early successes.

A clear digital roadmap addresses both of these situations, helping insurance companies decide where to take the first bite of the automation elephant and then how to munch their way through the beast, from tail to trunk. It gives a foundation for transforming to a more digital future, regardless of the maturity of automation within a business or the RPA, AI or cognitive technologies in play.

And theres more good news you will make new friends, including the IT department! IT tends not to like automation initiatives, which are seen as grey IT and outside their control. Unsurprisingly, agreeing on a digital roadmap is likely to be music to their ears, as they can influence technology choices and ensure that they are ready to cope with any technology or architectural changes required over time.

So, what does a good roadmap look like?

The key is that it should be incremental and stage-based. Whether youre looking to automate processes surrounding claims processing, customer services requests, new account set ups, complaint acknowledgment or change of policy details, the focus is the same: each process should be evaluated for automation and proven, one process at a time.

This gradual, measured approach reduces project risk by minimising large scale commitments and means that you dont have to commit to long term technology decisions at the outset. It also makes it easier for the people on the ground to measure whats actually happening something thats very difficult when automation is adopted en masse.

The gradual approach also clears the way to assess whether individual processes are working correctly before they are assessed together as part of a longer chain involving other processes and people, designed to deliver end-to-end services.

Technologies such as Robotic Service Orchestration (RSO) manage end-to-end services, allocating tasks to either humans or software robots in order to fulfil a business process. This more sophisticated type of service delivery moves beyond addressing routine tasks where there is little variability, and into services that require a high degree of variability. Where RPA addresses how businesses can automate a particular process, RSO tells you what processes to automate and why. Imagine, for example, being able to deliver services from multiple locations to local standards, aligned to a detailed cost and productivity reporting capability.

Its about ensuring that automation extends beyond the pilot stage of a projects, and ensuring that organisations will be able to manage the entire automation process, not just the related pieces.

The simple fact is that the back office has grown big and unwieldy, and if we are to meet the expectations of the newly defined 21st century customer experience and employee experience, we need to shrink the back office and intelligently automate one step at a time, with humans and automation technologies working together to deliver better services.

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Struggling with Back Office Automation? The Answer Might be Simpler than You Think - Finextra (blog)

Blue cables connect computer server units. Photographer: Krisztian Bocsi/Bloomberg

A recent Gartner report observed that, by 2022, smart machines and robots may replace highly trained professionals in tasks within medicine, law and IT. The report goes on to conclude that the ability of automation techniques to substitute for a lawyer means that what the enterprise previously considered value-added practices will become a utility (Prepare for When AI Turns Skilled Practices Into Utilities, Gartner, March 8, 2017).

It is yet another voice in the debate over the impact of advanced technologies on BigLaw. In considering this issue, we tend to overlook the reality that BigLaw is no longer a monolithic industry. The most recent set of AmLaw data simply confirms the trend we have seen for a number of years the industry is becoming increasingly stratified into groups of firms with different brand values and positions in the marketplace. For example, the top 20 or so elite firms have clearly broken from the pack with respect to economic performance. Beneath that group it is likely that we will see clusters of firms begin to emerge at various levels of the marketplace.

This change in the structure of the industry is largely driven by economic/market factors. Clients want and need different things from their legal service providers. They need predictable cost structures, efficient service delivery, smart deployment of technology, process, and project management to name a few.

In the absence of an industry willing to meet these challenges, the buyers of legal services are speaking with their money. Elite firms (or elite practices within firms) continue to attract client business. And, while there continues to be work for other firms, increasingly clients are keeping work in-house or using alternative service providers. Thus, while the need for legal services is rising, the demand for services from traditional law firms remains flat.

Avoiding the Muddy Middle

We see this dynamic reflected in a variety of data spread over the industry. Of course, AmLaw data supports this conclusion. Similarly, in a recent Altman Weil survey, well over half of the firms responded that their partners were underproductive (Altman Weil 2017 Law Firms in Transition). Yes, there is still healthy money to be earned in the industry generally, but the struggle in the muddy middle of the industry to compete for scarce market share is quite clear. This is so because the nature of the business has changed. Mark Cohen captured this change perfectly by noting that legal delivery is now the business of delivering legal services, not simply the practice of law (Are Law Firms Becoming Obsolete, Forbes, June 12, 2017).

Now layer technology advances on this striated industry. The impact simply will not be felt equally. Technology whether through cognitive computing, machine learning or other tools usually lumped together under the term AI will shortly be in a position to handle the repetitive tasks generally associated with large swaths of the practice. The elite firms those firms or practices that handle legitimately bespoke work will stave off the impact. For smaller firms or alternative service providers, it provides an opportunity to use technology to punch above their weight. It is the firms in the middle that will be squeezed. In another context, McKinsey has referred to this as the barbell economy (McKinsey Global Institute, A Future that Works).

Can firms in the muddy middle adapt to this challenge? Some will. Most will not. The problem is that adaptation requires change. The Altman Weil survey produced some interesting results in this regard. The overwhelming majority of managing partners surveyed see the increased price pressure, the slide of practices into commodities and the impact of technology as permanent trends.

Despite this recognition, 61.5percent of the respondents said their firm was only moderately (or less) serious about change. Lest you think this is not a bad number: 81.5percent of corporate counsel gave the same response about their firms. On the technology front, only 7.5percent of firms have begun to use AI tools. Another 29percent are exploring. The remaining 64percent were either doing nothing or are unaware of the emerging opportunities.

The reason for this disconnect between belief and action is pretty obvious: 65percent of firm leaders say their partners resist change. Hardly shocking. And why? 60percent respond that they are not feeling enough economic pain to feel the need to change.

Indeed, the financial performance of the industry remains healthy. The speed of technological advances, however, is remarkable. Up until this point, the industry has had the ability to slowly adapt to market forces and emerge ever stronger.

That slow adaptation is unlikely to work this time. Existing market forces will only be amplified by the emergence of different technologies that will change the nature of the delivery of legal services. This is a tremendous opportunity for firms who embrace the challenge and change their delivery systems. For those who continue to believe they are special snowflakes that will escapewell, the odds are not in their favor.

For more essays from Stephen Poor (@stephen_poor) and Seyfarth on change in the legal industry, visitRethink the Practice.

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Automation to Squeeze the 'Muddy Middle' of Big Law (Perspective ... - Bloomberg Big Law Business