Technology Advances – Godzilla Lurking – Revisited

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I first read the September 2013 Oxford University study on U.S. jobs estimated as potentially lost to technology by 2033 last September. If you have not read that study, The Future of Employment: How Susceptible Are Jobs to Computerization, you should do that sooner than later.

I then saw little written on technology advances and their potential impact on jobs until six weeks ago. Now every second morning it seems there is another article on this topic.

Technology advances – important articles

A March 15 Business Insider article titled The 11 US cities most at risk for having jobs stolen by robots references several important articles and studies. The first of these, published March 10, 2016, is titled Obama just warned Congress about robots taking over jobs that pay less than $20 an hour.

The second references a January 2016 World Economic Forum study titled The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution.

The third references a January 2016 study coproduced by CitiBank and the Oxford Martin School at the University of Oxford titled Technology at Work v2.0.

An important thing said in the CitiBank/Oxford study is “It is important to recognize which characteristics are most likely to be associated with a given job being automated – perception and manipulation, creative intelligence, and social intelligence are the three bottlenecks to automation”. Interestingly, only yesterday I wrote about artificial intelligence and deep learning. See “One stat shows how artificial intelligence is exploding into the world” at http://goo.gl/qaYJdK. Such developments may make even those three bottlenecks less so.

The disruptive nature of technology advances

In this post I have provided links to each article. Technological advances and the likely disruptions that will result from them is a hugely important topic all business owners and their advisors need to read voraciously and think very hard about. This in the context of how technology advances and resultant unemployment both are likely to impact their and their client’s businesses.

If you haven’t yet read Technology – Godzilla Lurking – SWOT Impacts? that I published three weeks ago I suggest you do that.

Technology advances and the financial markets?

I also suggest it is important to reflect on the financial markets in the context of technological advances. This is because business value underlies company specific share and debt prices in the financial markets.

At a high level the value of any business at a given point is equal to the present value of all future after-tax free cash flows. Arguably the financial markets today are not so much investment markets as they are trading markets buoyed up by central bank easy money policies.

That leads to this important question. Are the financial markets pricing in the economic and business disruptions technological advances may bring in the near term? I suggest they may well not be. If I am right in this the financial markets almost certainly are currently overpricing the shares and debt of a good many companies. You should consider that question, talk about it with your financial advisor, and reach your own conclusion.

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