Financial futurist Jason Schenker details what industries are safest from robot competition and what skills you need to stay marketable in the new economy
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Listen in to this special episode of Charged Up!, taken from a live Facebook broadcast with Jason Schenker, who Bloomberg ranks as the world’s foremost financial futurist. In this episode, we talk about Schenker’s predictions, laid out in his 2017 book “Jobs for Robots: Between Robocalypse and Robotopia,” and how the robot revolution will affect our jobs, our pay and our career prospects.
Schenker talks about three industry sectors that are safest from being taken over by technology, what students should study if they’re entering school now and what kind of skills will protect you from losing out to robots.
So, get Charged Up! about learning how to survive the robot revolution!
Jenny Hoff: Jason,thanks so much for joining us today.
Jason Schenker: Thank you very much, Jenny. It’s a real pleasure to be here.
Hoff: So, we’re going to talk today about your book, “Jobs for Robots” and this is a live broadcast on Facebook so we’re also going to be taking questions from our listeners which I will then later translate for the podcast so we make sure that everybody can hear the questions. But first I want to talk a little bit about how did you get into being a futurist and then where did the interest in robots come from?
So those are the really three core ingredients of being a futurist and of course part and parcel of that future technology piece is robots. So this is something that’s kind of part of that and as I’ve been doing work in the future space, this is definitely the areas that has a lot of interest, a lot of work to be done.
Hoff: So, I think when people think of robots they think of the movies, “I Robot.” They think of how robots are acting as humans taking over the world but that’s really not what we’re talking about when we talk about robots taking over our jobs, it’s in a much more practical standpoint, such as you order the food to yourself at a restaurant through a machine instead of having somebody ask you what your order is. Talk a little bit about what the robot revolution means in a realistic standpoint that we can all envision for us right now?
Schenker: Sure, so jobs for robots have some sort of subtitle tagline of between robocalypse and robotopia. On the one hand, there’s this robocalypse narrative which is super interesting and exciting and cool, think of “Terminator,” “The Matrix,” “I, Robot.” It’s cool, it’s futuristic, it’s terrifying, right but it’s a bit reductive. A lot of what happens with technology over time just simply gets easily absorbed into the culture. Twenty years ago, if I told you that we would have smartphones, a supercomputer in your pocket you know, it would’ve boggled your mind and today there’s almost a certain ennui that people have about, “Ah, there’s another iPhone release,” “There’s another Samsung Galaxy.” But I don’t even know what numbers we’re on right now and it’s something that we take for granted and so I think that’s the important thing in the robotopia of everything being perfect for everyone. That’s not going to be the case and it’s going to be somewhere in between. There are some downside risks but there are upside opportunities and we just need to make sure that we capture that the right way. And those are some of the few things I kind of put in kind of a who wants historical perspective in “Jobs for Robots.”
Hoff: So what would you say the jobs most at risk being taken over by robots in the near future?
Schenker: Well, I think you know the retail sector is exposed and we know that, we see that as people move from \u2018bricks to clicks’. I mean the storefront of the future is in your hand. Right, that’s the storefront of the future. People are moving in that direction and e-commerce is still a very small percentage of total commerce that’s out there right now.
So, I think that that’s something people are aware of more importantly I think transportation jobs will eventually go away as well and its honestly for most people not the best and highest use of our time to be doing these sorts of things. We could be doing more interesting things, more creative things and the robots can do these kinds of repetitive jobs – also in warehousing and distribution and the like.
And so the jobs that we need have to be more intellectual capital-focused, and I think that’s where we’re going to go in the future.
Hoff: What kind of skills do we need to be acquiring in order to be prepared for this robot revolution?
Schenker: The thing I’d say, Jenny, too, is, although some jobs were at risk, it’s really predicated on education level. There was a report that came out from the office of the president and then back in December 2016, and the percent of jobs that were highly automatable was very much dependent on education level, so if you had less than a high school diploma, 44 percent of those jobs are highly automatable. If you have a bachelor’s degree, and your job requires it 1 percent were automatable and the graduate degree there were 0 percent of automatable jobs.
So, education is really the big defining line and also for jobs that require trades so it wasn’t just a bachelor’s degree they are also trade routes as well and I think most people realize this, we see it of course because we’re in Austin, too, that there’s a shortage of people with trade skills. So I think moving forward, the most important thing is you need to keep learning, keep building your skills. Unlike the challenges of the industrial revolution, we have access now to an online classroom. I did entire master’s degree online, I’ve done professional certifications, I did a course on fintech – financial technology – with MIT online. I didn’t meet any of my fellow classmates until even after I finished the program.
And you can do these kinds of things and, of course, there’s a lot more learning opportunities, LinkedIn learning you’ve seen that, we rolled out much further in my first course will be out this fall. And there’s a number of other different platforms and that’s going to accelerate.
So keep learning is going to be really important in both in a traditional structure degree format but also in less traditional structures just to get those skills and to have those useable transferable skills is going to be absolutely critical. That’s the deciding line to whether you have your own personal Robocalypse or Robotopia.
Hoff: So what would be the usable transferable skills that you think that robots are not going to be taking away from us?
Schenker: Sure, there’s a number of them. I think the most important is if you’re looking at sectors, obviously health care is a sector that’s going to be huge, that’s the biggest growing field both in number of jobs and percentage growth rates dominates the top 20 categories per growth in the next 10 years. Health care is going to be a monster for growth. So that’s No. 1.
And the second thing I would say to is, anything in technology is going to continue to be big. There’s research that shows for each job created in technology, it creates five other jobs in the region. So, this why the area like Austin is so economically healthy, that’s a huge multiplier, right? For manufacturing jobs, each manufacturing job only creates a little bit more than one and a half other jobs. Tech jobs are going to be big, right. Be part of the robot revolution, get into the tech space.
The third thing is project management. Robots can do stuff, computer programs can do things. But how many of us have had meetings, right? Where we’re sitting with a bunch of executives and we’re still were trying to figure out what the question we want to ask is, right. And the robots can ask the question, they can do the stuff you got to know the question before you’re going to get the answer. So, this is like the old joke by Einstein when he said if he had the most difficult question in the world to solve in an hour, he’d take 55 minutes to figure out the question and five minutes with the solution.
And so that’s what we really need to think about for the robots as well, project management thinking and of course there’s also human interactions, service sector jobs with high personal touch. I imagine you and most people in the podcast have been to a Brookstone at some point in your life. You’ve been to Brookstone, right?
Schenker: Those little massage chairs, right? And yet massage therapist aren’t out of business and the sector is growing, right? That’s the same with many other fields, anything that’s high touch, high human contact. I don’t see school nurses being replaced by robots anytime soon, right? And there’s a lot of things like that we think about how important that human touch is and human interactions and of course, being able to communicate with people also truly critical in the future.
Hoff: And we have a question from one of our listeners, Matt. “Do you see automation and robots ultimately distributing production to local business people and creators or will this only benefit large companies?”
Schenker: So, this is a great question and I think that there is opportunity more for smaller entrepreneurs moving forward. 3D printing is really just getting started, it depends what you’re doing, right? I ran my business a pretty much virtual business and it’s an intellectual property business. We research, write reports, do market analysis and that can be done remotely, anywhere. So in that respect, I can live anywhere. So if you have a business focus on intellectual property, things that have already happened technology-wise, help foster that. And in the future there should be more virtual opportunities for that. So I think that’s great.
For physical things, 3D printing is kind of the beta version of what we’re going to see in the future, I think we’re going to see more of this where you can have distributed manufactured of goods and of course the third thing is, sort of like with the high touch anything that’s made by hand will continue to have a significant premium because its more desirable, its something people don’t do anymore. And almost any person that you can talk to with is willing to pay for things at a premium for that. So I think that should be good for second-tier sized cities and for other places as well. In aggregate though, if we look at what’s going to happen with cities, urbanization should accelerate and what you’re also going to see though is the tech jobs create more jobs, more jobs in concentrated areas but the second-tier city should continue to seek rapid growth and of course, remote working environments make working virtual anywhere quite possible and I find it to be a good gig.
Hoff: You also talk about in your book the issue of Universal Basic Income and it’s more of a political issue, right, but it is something that we confront as we see elections sweeping through Europe and the United States and the world and this question keeps coming up and up. You reference it in the book and you talk about the impact of what Universal Basic Income would have in the robot revolution and on corporations. Can you talk a little bit about theory behind that and the pros and cons of what a Universal Basic Income would have and the effect to our jobs?
Schenker: Sure, sure. Now the first notion of Universal Basic Income, if you’re not familiar with it, the idea of basically everyone gets free money. But the problem with this is if everyone gets something for free, what’s the value? And I would say if everyone’s going to get a check, for $10,000 a year which is the number that has been floated around by some, if everyone gets a check for $10,000 what happens to the price of everything? What happens the day everyone gets that check in the mail? The day that money hits everyone’s accounts, what happens to the price of everything? I mean I worked in an investment bank and the week when bankers got their bonuses, bottle service at a night club either in Vegas or New York or wherever else would go through the roof because everyone was flush with cash. So suddenly everybody gets $10,000, you could see prices go up so you’re going to get inflation so you devalue the impact of how the money is distributed.
The second thing if course is, the money could just be replaced by inflation which is bad and that would also devalue any other assets people hold in the economy that are liquid capital form and the second thing is it has to come from somewhere so then you’ve got to raise taxes and that of course could result in businesses being dis-incentivized to operate in the US if you have a tax addition. This is why there is a discussion about lowering corporate taxes as lowered taxes could attract more business, higher taxes push corporations away, there’s a risk to that. And then of course there’s the fourth thing which is idle hands are the work of the devil. Most people I know, if I had to describe them by personality, are German Shepherds you know what happens when you leave your German Shepherds home alone all day long with nothing to do? It eats all your furniture, right? It will destroy its own home because it’s bored. And if people have nothing to do, that’s a real problem. And the Universal Basic Income thing sounds nice to a lot of people, it sounds it has a good ring to, it sounds familiar, it is pure Marxism but instead of, you know sort of the Marxist-Communist idea of workers of the world unite, this is the non-workers of the world unite.
So that’s kind of how it shakes up as I see it.
Hoff: And we have question now from one of our listeners, Tony. He’s asking: “Are there any jobs that robots eventually won’t do?”
Schenker: This is a great question. There’s actually a list in my book that I just wrote there’s a number of tables and these tables are out there somewhere as well statistically of what jobs are highly automatable and what are not. And anything that’s repetitive, jobs that are going to have a predictive level of tasks or that might be physically challenging – that’s going to be replaced. Whether we’re talking 3D printing buildings or we’re talking about painting. But then there’s things that require high human touch, whether it’s personal trainers, physical therapists and then there’s things like plumbers in the trade side because anyone listening to this podcast has a house or an apartment and the plumbing is probably different for each sink and bathroom and it’s all wedged in there and it’s going to be a while before a robot could do anything to fix that because it’s not uniform. Everything that a plumber would do is going to be highly customized. And so that requires a person so anything that is highly customized, high human touch or is very interactive among people, robots are no good for that.
Hoff: Okay, so the ones that the robots are most a threat to right now are for instance in the retail space or cashiers or stockers or things that can be done that’s repetitive as you said is done the same way every time and people can do more self-service and just put in their preferences without having to tell it to somebody?
Schenker: Yeah and the reference with the earlier to the Walmart where you could pick what you’re getting, Amazon Go is also moving in this direction where you don’t need to even take your phone out of your wallet: You just walk into the store, grab your stuff and walk out. But then in theory, some of these things create more jobs so if you’ve read for example, here in Austin we’ve recently opened in the Domain which are outdoor shopping malls here they opened The Sprinkles which is a cupcake store that has an ATM with a robotic arm, it’s 24 hours. If you want cupcakes 24 hours a day, then this is great and of course if there’s a line, you just go over the ATM and get your cupcake. Now in theory, that’s taking someone else’s job but it should also create more jobs of actually making that cupcake and of course working in a cupcake place maybe you prefer making the cupcakes rather than to just put them in boxes and so this is what the robots are just on the dispensing side as opposed to the creative side of the business.
And so I think that kind of thing is where you’re going to see there’s opportunities still for job creation but again they’re handmade and there’s a person making them and baking them and isn’t that the better use of a person’s time than just stocking?
Hoff: I like it, it’s a very positive outlook. It’s saying that actually robots will take care of those jobs that are repetitive and don’t require are ingenuity and creativity to do necessarily, which will open us up for more opportunities down the road?
Schenker: Yeah, I think that’s right that should be the case in general I mean there are challenges, I think the most important is how do we make sure people get access to this skills and education so they can move in a positive direction and build their skills and make sure that they are employable and I think that there are also tax issues at hand that could overly incentivize automation for payroll tax issues and this is a long thing about entitlements but if those things are managed properly, then it should be quite positive over time in the same way that I don’t think that too many people would say I don’t think that Microsoft Excel or Office or Outlook have put people out of business even though the job “secretary” was the most common job by state in 1978 and now that’s not the case anymore. We wouldn’t even generally use the term secretary, right? Even the world itself this is outdated. But now everyone is their own secretary, we all send our own emails and our correspondence and it’s easy to maintain a calendar and these kinds of things.
So I think that’s a good example of what the future generally holds, its augmentation of how things are done.
Hoff: Okay and we have another question from a listener, Fred. “What is your favorite AI movie and do any of them get it right as far as how technology might play out”?
Schenker: My favorite movie generally in this direction is The Matrix and the reason I like this so much and this actually gets back to a question Jenny had asked earlier that I pushed it aside about FinTech and Robo-advisers is because there’s a scene in the movie where Keanu Reeves walks in and sees a guy looking at three computer screens and all Keanu sees are just numbers moving. And he says, “What are you looking at?” and the guy says, “I see a blonde, brunette, redhead” and Keanu Reeves is kind of baffled by this. What Robo Advisers do, it is essentially, this is tied to a lot of math and is something called \u2018market technician technicals’, right? So, I’m actually a market technician and robots on the AI side in Finance, you might just think you’re seeing lines in the graph and numbers but they’re seeing buy and sell. And so I think that something that’s really changed in the investment management space, although it kind of bridging the gap here on the discussion point, but they can see things that people might not or takes a lot training to get there but to the untrained eye, it’s just noise and so I think that that’s really important point that over time we’re going to see robots doing that.
Hoff: Robots will see more than what we can-
Schenker: The robots will see more but I think that we will also learn to read what they can do as well a little bit more.
Hoff: You know what’s interesting talking about Robot-advisers, and I want to go into this a little bit because when I saw you at the panel at South by Southwest you were talking about FinTech in the future, all about that. And we were talking about we’re getting to the point where your cellphone and your activity on your cellphone and your activity on your social media pages can determine your real risk profile versus questions that you answer yourself. So for people who haven’t done this if you want to invest in a 401(k) they’ll ask you several questions and they’ll determine your risk profile – so how risky would you be to go into the market and what kind of portfolio should you build and soon get to a point where we’re not asked those questions, our behavior determines that. What do you think about that?
Schenker: So I’m concerned about the space in general because I think it’s untested and in my firm we did some research on this we called some of the biggest Robo-advisers and when we ask them questions it was clear that at least a lot of people we have spoken with did not understand what their product was. They did not know how it worked, you asked how does this work and the answer is just, “it just does.” That’s not a very comforting answer. I think also because we have Financial oversight in the US, I don’t think we’ll ever get to a point where it’s out of the hands of the people automatically because I think there’s too much risk and people lie. And they lie to themselves about things so if you say, what’s your risk profile, “Oh I’m a huge risk-taker”, what do you like to invest in? “Government bonds.” Unless its Venezuala, then you’re probably actually risk averse. This is actually something that came up on the panel that when you ask people what do you want, what do you invest in, how risky do you feel you are, when they actually start putting matrix around what risk is involved in certain things the portfolio looks very different than what people think it will. But I think that pure robo-adviser where the money just kind of goes in there, they’re not all equal and that’s a I think a challenge – there’s a lot of trust people need to have. People are still following a Great Recession, very skeptical of traditional financial institutions and they’re willing to try almost anything else and so there’s a lot of trust … All you do is sign up and give it access to your bank account and then access to everything at that point I’m out. But for some people, \u2018no problem I’m in’ and so I think there’s a lot of trust there and that’s going to be really important to maintain moving forward \u2018cause if there were downturn, I think that’d be a problem.
Hoff: If somebody let’s say, is in the retail space or they’re in what would you call it a repetitive job, or in a job that they could imagine that could be replaced by a machine at some point, what the three things that we can do right now to prepare for the future?
Schenker: I mean if you’re concerned about your job because of automation and you even think that that’s a serious threat, then you need to move. You need to get in with different sector or move to region or get some more skills but you can’t sit still and think, “Gee, I can see my job and there’s a tidal wave coming but I’m just going to sit here in the beach and hope it goes well.” That’s not how this works, so you have to take the personal responsibility and the initiative to try to get to the next level and you might have a vision of where you’re going to get to and it might be you have to change careers and change jobs or change fields but you might not be able to do all those at once but you need to begin that process.
And I would tell anyone that it used to be the case that people thought, \u2018Well, I’ve got a high school diploma that’s good enough’ and then people \u2018Well, I’ve got a Bachelor’s Degree, that’s good enough.’ And then I know some of you, \u2018I’ve got one Master’s Degree, that’s enough’ – none of that is enough. That’s the biggest differentiator if we look statistically, historically, what happened to the unemployment rates to the last business cycle during the great recession, the magnitude of increase of the people without a high school education was shocking compared to people who have vast resources of these degrees.
And so this is something that people just need to access the learning opportunities out there, formal and informal in order to be building those skills and if you’re in a profession where you think your job is at risk, by all means get out, don’t stay in that profession. And by the way, if you look at the economy as a whole, that’s how you get progress. People see wait a minute I, you know, and right now there’s kind of a dual dynamic with something like trucking where eventually the jobs be all taken by robots, but right now there’s a labor shortage so it pays really well. So, if you go into that space to get the high paying job because there is a labor shortage, just know it’s not forever and I think that most people realize that and this has been a big change even in the last 30 years that you’re going to change your careers, you’re going to change jobs, you’re going to get more skills, but you need to keep moving, keep learning and try to have a long-term perspective on things.
Hoff: One thing I do want to talk about and when I did an interview Robert Kiyosaki who wrote “Rich Dad, Poor Dad” for my podcast we were talking a little bit about the political scene but how there’s a lot of talk in the election about bringing factory jobs back to America and he was a little skeptical about that even being a possibility because robots will now be able to do a lot of the jobs that factories could do and especially with all of the regulations when it comes to payroll taxes and all that kind of stuff it just behooves corporations to invest in the technology. Talk a little about that so when we talk about factory jobs, possibly coming back to America or creating more is that something you even see as a possibility?
Schenker: Now you’re asking about my last book, “Electing Recession: The Impact of Presidential Elections on Financial Markets in the Economy.” I wrote about this last year in some detail that yes we can have manufacturing jobs come back and they will be manufacturing jobs for robots. So it’s not necessarily going to create any more jobs for people. I mean you could even look at the Texas’ economy in the forecast for employment for manufacturing is down. But the percent of GDP and it’s going to be manufacturing is going up and that wedge between the number of jobs and manufacturing down and the contribution to growth going up, the wedge between there’s productivity and the productivity coming from automation of robots.
Hoff: Okay, so in your opinion yes, manufacturing jobs can come back, but it’s not going to create more jobs.
Schenker: In some jobs but it’s not, it’ll be a secondary order of fact. I don’t think you’re going to see a major turnaround, I don’t think that was ever a real possibility in a significant meaningful way.
Hoff: If somebody is a student right now entering college and they haven’t decided on what they want to study yet, what should they be studying to secure their future?
Schenker: I think it depends on the individual and I think it depends on the answer but it depends on the individual’s personal situation. If your main goal is just to be employable as quickly as possible then health care is it.
If you want to have a job that you might need to be in school a little longer and you’re willing to make that investment – something in Engineering or the Sciences is probably really good.
Also, Project Management so I think any type of business especially anything tied to Supply Chain Operations, Labor Management and management in general.
Those things are really going to be good but if you can, I would say the best thing to do is study something you like, get the best grades you can and you can always worry about it later. But the most important thing is to pick something that you’re going to do well in, that you’re going to be happy with doing and that needs your own time frame goals of when you need to have the revenue coming in and how little or how much that you’re willing to take on.
Hoff: What charges you up about the Robot Revolution?
Schenker: Well you know I think it’s the self-service revolution side of it, right? A lot of what’s going on with robots whether we’re talking kiosks or self-driving cars or amplification any of these things are designed to increase the freedom in our lives, right? I mean it’s not the highest best use of my time to drive almost anywhere. I mean all you’re doing is trying to play personal pinball in traffic and just navigating the way from going to point A to point B. I’m perfectly happy to let some robot do that.
And I’d say from a personal freedom standpoint, the e-commerce side, right? If we think about e-commerce right now is only 8.3 percent of all retail sales, less than 10 percent. I certainly would like the ability for even more stuff to come to my house and just show up, that sounds great.
So, I think that’s going to be really important and I think also you’re going to see more ability for people to have more rewarding, intellectual property and creativity jobs. I don’t think too many people bemoan things that caterpillar equipment could do like, if you’re digging a foundation for a house – I don’t think too many people are like, “Man I wish I could be digging that by hand.” This is why in warehousing and distribution, you see so much automation because the demands to pick and plough material would be too stressful physically and just impossible to manage from a human capital standpoint. So I think that you’re going to see, it’s not all downside, right?
And that’s the thing, that’s why the book is between Robocalypse and Robotopia. There are definitely downside risks, certain sectors, industries, and some regions they’re more exposed whereas you also have some big opportunities and of course a lot of it will hinge on access to education and sound tax policy around entitlements.
Hoff: Be prepared for this oncoming revolution which as you said nobody thought you’d have a computer in your pocket 20 years ago and now, we can imagine living without them. So, it’s coming, it’s changing how we live our lives but it doesn’t have to be in a bad way.
Jason, thank you so much for joining us today.
Schenker: Thank you Jenny, a pleasure to be here.