Since the middle of the 20th century, we've been treated to stories, TV shows, and movies depicting robots as part of our everyday life.
Until now, the reality has been less dramatic, limited to things like industrial robots in manufacturing and the Roomba, which is pretty much used for vacuuming and terrorizing house pets.
This is about to change. If you doubt it, look at these incredible videos of a robot made by Boston Dynamics, a company recently acquired by Google. Add that to Google’s self-driving cars and it is clear that all of the pieces are coming together. Soon enough we will start seeing robots all over, doing lots of jobs previously done by people. The next 10 or 15 years are going to be wild.
I believe that this “robotization” of our economy is going to create as much or more wealth than the either globalization or the internet did. Why do I say this? Because no matter how you slice it - with the exception of web-based computer games - almost everything comes down to making some physical thing. The internet can get me better information about where to buy the TV that I want or which restaurant to eat at – but someone still needs to manufacture the TV or prepare the meal. Soon, someone will be something. This means it is going to get a whole lot cheaper to make stuff. Combine this with 3-D printing technology and you've got the makings of the greatest creator of wealth in human history.
But there’s a catch... and it’s a whopper.
Globalization created huge amounts of wealth, but not without devastating casualties. I’m talking about the relatively unskilled labor whose jobs got exported to other countries. People making a good living in manufacturing woke up from globalization and found themselves working two or three jobs while making less money with no benefits. The fact that incredible amounts of wealth were created globally didn't mean a damn thing to someone who got laid off from GM and found themselves working in a fast food restaurant making minimum.
As much damage as globalization has done to the economic well-being of relatively unskilled workers in the US, robotization is going to be much, much worse. Even the countries that were on the receiving end of the jobs from globalization are going to get hit hard. Estimates are that up to 1 billion jobs will disappear due to robotization. The reality is, at least in any first-world and second-world economy, the working class is going to virtually cease to exist. These people will be the robots’ first victim.
Some people like to imagine that the results of this incredible wealth creation is that everyone will be better off – Laissez Faire and Adam Smith’s invisible hand at work. And I’ll grant you that in the long run (with emphasis on the word “long”) things will work out. But in the short run, the invisible hand will merely sweep these folks off of their working-class cliff. And as they are plunging and tumbling headlong into the dark abyss that is the underclass, I can assure you that shopping will not be something that they do for anything other than absolute necessity.
It doesn't matter if you are right wing, left wing or moderate like me, we can all agree that an additional dollar in the hands of Warren Buffett or Sergey Brin will not find itself in the cash register of a nearby retailer as quickly as it will in the hands of someone of more modest means. This is simply common sense. And if the next round of dramatic wealth creation takes place without America’s working class as a partial beneficiary, then we are going to need a lot less retail – and that's why retail is the robots’ second victim.
I wish I could give you a magical solution but I don't have one. However, I will venture to say that I don’t think there is any amount of money that is too much to spend to ensure that people are trained to take advantage of the new, higher-skilled jobs that will be created by robotization, as long as this money is spent responsibly and effectively. High schools need to produce skilled workers as do colleges.
As robotization unfolds, I would call on the retail and retail real estate industries to provide leadership on the issues that will be created. Why retail? Well obviously these are industries that have a lot to lose. But also because the retail and retail real estate are made up of practical, pragmatic people who are much more concerned with results than ideology. Many retail leaders have their roots in the working class - grandparents and great grandparents who started at the bottom and worked their way into the American Dream. Retail executives have a better understanding of what’s at stake for our country, society and culture than Wall Street executives.
A few decades from now, when we look back on robotization, will there be a vibrant middle class created on the backs of robots? Right now, a smart person would have to say “probably not.” While there is no question that robotization is the greatest opportunity in history to move our society and economy to level of well-being unheard of in human history, it will only happen if we make the right choices now and in the near future. We need programmers, skilled technicians, and talented business people coming up the pipeline, ready to take the jobs of the future. In other times, we might have looked to our politicians to be the source of this leadership and vision, but that’s not an option now. So I pin my hopes on the retail industry - people who know that everyone needs to do well for our economy and society to thrive - to drag our government (kicking and screaming, I'm sure) to do what needs to be done.
Because the alternative is unthinkable.