The Future (8 page)

Here is a second example of a seemingly mundane advance that led to truly revolutionary progress in the efficiency of an entire industrial sector: the containership revolution began on October 4, 1957—on the
very day that the first space satellite, Sputnik, was launched by the Soviet Union. Malcom McLean, a businessman who owned a trucking company in North Carolina, had wondered for almost twenty years why the cargo coming into U.S. ports from foreign countries was carried in boxes and enclosures of every size, shape, and description, which then had to be lifted and sorted individually onto the dock and moved from there to whatever conveyance was available to deliver each box to its ultimate destination—rather than packaged into enclosed symmetrical containers of the exact same size that could be lifted from each ship onto trains and trailer trucks and then transported to their destination.

In the spring of 1956, McLean experimented with his revolutionary idea by equipping one special deck on a ship bound from Newark, New Jersey, to Houston, Texas, with the bodies of fifty-eight trailer truck units that had been detached from the cab and chassis and loaded into slots on the ship. The experiment was so successful that eighteen months later
he made history by outfitting an entire ship to carry 226 containers that were sent from port Newark and offloaded a week later in Houston onto the chassis of 226 trucks waiting to carry them to their destinations. The “containership revolution” that began in the fall of 1957 has had such an impact on global trade that in 2013 more than 150 million trailer-truck-sized containers
will carry goods from one country to another.

The progressive introduction of intelligence and networking is accelerating this same process in almost all areas of manufacturing. High-quality large-screen television sets, for example, have come down more than 5 percent in price each year and are
now in surplus supply (much as food grains were a few decades ago). The first color television set was sold in 1953 at a price that,
in today’s dollars, would be $8,000. The cheapest color television sets for sale today—with the same or larger screen size, much greater picture clarity, and the ability to play hundreds of channels instead of only three—are available for as little as $50—or approximately one half of one percent of the cost in return for a product of much higher quality and much higher capacity.

We take such dramatic price reductions (and simultaneous quality improvements) for granted these days, but on a cumulative basis the impact for the world of work can no longer be ignored. Indeed, many consumer products that were once described as high-tech are now referred to by economists as commodities. The massive increase in world trade, combined with outsourcing, robosourcing, the new flows of information and investment connecting virtually all locations in the world to one another have all reinforced each other in a massive global feedback loop.

This pattern of progressive improvement in the effectiveness and utility of machine intelligence is under way in thousands of industries and it is the cumulative impact that is driving the global change in the nature and purpose of work in the world. Look, for example, at the coal industry in the United States. In the last quarter century, production has increased by
133 percent, even as jobs have decreased by 33 percent.

To take another example, jobs in the U.S. copper mining industry have declined precipitously in the last half century even as output
increased significantly over much of that period. As is often the case when new technology replaces jobs, the pattern was not an even and steady
decline, but a decline that lurched downward from one plateau to the next as new innovations became available and were implemented. In one six-year period—from 1980 to 1986—the
number of hours of labor required to produce a ton of copper fell by 50 percent. In that same decade, one of the largest companies, Kennecott, increased
labor productivity in one of its largest mines by 400 percent.

Looking more closely at this industry as an illustrative example of the broad trend, the new technologies that replaced jobs included much larger trucks and shovels, much broader use of computers for micromanaging the schedule of the trucks and the operation of the mills, much more efficient crushers connected to better conveyer belts, and the introduction of new chemical and electrochemical processes to automatically separate the pure copper from the ore.

The copper mining industry in the United States also illustrates changes from robosourcing and outsourcing that impact the third classical factor of production—resources. As technology increased labor productivity and the number of tons of copper produced year by year, the industry eventually reached a tipping point when the available supplies of economically recoverable copper ore began to diminish.
New sources of copper were developed in other countries, principally Chile. Sharp increases in the efficiency of production, coupled with increasing consumption rates driven by population growth and increased affluence, are driving many industries toward constraints in the supplies of natural resources essential to their production processes.

In a process that is further reducing jobs and demand in the industrial world, robosourcing and IT-empowered outsourcing are now also beginning to have a major impact on jobs in the largest category of employment: services. Consider the impact of intelligent programs for legal and document research in law firms. Some studies indicate that with the addition of these programs, a single first-year associate can now perform with greater accuracy the volume of work that used to be done
by 500 first-year associates.

Indeed, many predict that the impact of robosourcing will be even more pronounced in services than in manufacturing. Much has been written about Google’s success in developing self-driving automobiles, which have now traveled
300,000 miles in all driving conditions without an accident. If this technology is soon perfected—as many predict—consider the impact on the 373,000 people
employed in the United States alone
as taxi drivers and chauffeurs. Already, some Australian mining companies have replaced high-wage truck drivers with driverless trucks.

Where services are concerned, we are also seeing a third trend, which might be called “self-sourcing”: individual consumers of services, empowered with laptops, smartphones, tablets, and other productivity-enhancing devices, are interacting with intelligent programs to effectively partner with machine intelligence to effectively replace many of the people who used to be employed in service jobs. Many airline travelers routinely make their own reservations, pick their own seats, and print their boarding passes. Many supermarkets and other stores enable shoppers to handle the checkout and payment process on their own. Banks began to provide cash with ATM machines and now offer extensive online banking services. Customers of many businesses now routinely deal with computers on the telephone. National postal services in many countries, including the U.S., are being progressively disintermediated (that is, their “middleman” role is being made obsolete) by email and social media.

This self-sourcing trend is still in its early stages and will accelerate dramatically as artificial intelligence improves year by year. One obvious problem is that there is no compensation for all the new work done by individuals, even as the compensation formerly paid to those in firms who lost their jobs is also lost to the economy as a whole. The enhanced convenience associated with self-sourcing improves efficiency and saves time, to be sure, but on an aggregate basis, the overall reduction in income for middle-income wage earners is beginning to have a noticeable impact on aggregate demand—particularly in consumer-oriented societies.

O
N A GLOBAL
basis, offshoring and robosourcing are together pushing the economy toward a simultaneous weakening of demand and surplus of production. The use of Keynesian stimulus policies—that is, government borrowing to finance temporary increases in aggregate demand—may become less effective over time as the secular, systemic shift to an economy with far fewer jobs relative to production represents a larger cause of declining incomes, and thus declining consumption and demand. In addition, as I’ll detail later, unprecedented demographic shifts include a larger proportion of older, retired people in industrial countries whose incomes are already replaced by programs such as Social
Security—thereby limiting the ability of governments to replace income indefinitely to working age people.

Unless the lost income of the unemployed and underemployed factory workers in industrial countries can somehow be replaced, global demand for the products of the new highly automated factories will continue to decline. The industrial economies, after all, continue to provide the greatest share of global demand and consumption. Higher wages paid to workers in developing and emerging economies are far more likely—
in part for cultural reasons—to go into savings instead of consumption. While both labor and capital have been globalized, the bulk of consumption in the world economy remains in wealthy industrial countries. This results in a mismatch between the distribution of income and the central role of consumption in driving global economic growth.

These accelerating changes will therefore require us to reimagine the now central role of consumption in our economy and simultaneously replace the flows of income to workers that presently empower consumption. The current connection between ever rising levels of consumption and the health of the global economy is increasingly unstable in any case.

The accelerating technology revolution is not only transforming the role of labor and capital as factors of production in the global economy, it is also transforming the role of resources. The new technologies of molecular manipulation have led to revolutionary advances in the materials sciences and brand-new hybrid materials that possess a combination of physical attributes far exceeding those of any materials
developed through the much older technologies of metallurgy and ceramics. As Pierre Teilhard de Chardin predicted more than sixty years ago, “In becoming planetized, humanity is acquiring new
physical powers which will enable it to super-organize matter.”

The new field of advanced materials science involves the study, manipulation, and fabrication of solid matter with highly sophisticated tools, almost on an atom-by-atom basis. It involves many interdisciplinary fields, including engineering, physics, chemistry, and biology. The new insights being developed into the ways that molecules control and direct basic functions in biology, chemistry, and the interaction of atomic
and subatomic processes that form solid matter is speeding up the emergence of what some experts are calling
the molecular economy.

Significantly, the new molecules and materials created need not be evaluated through the traditional, laborious process of trial and error. Advanced supercomputers are now capable of simulating the way these novel creations interact with other molecules and materials, allowing the selection of only the ones that are most promising for
experiments in the real world. Indeed, the new field known as computational science has now been recognized as a third basic form of knowledge creation—alongside inductive reasoning and deductive reasoning—and combines elements of the first two by simulating an artificial reality that functions as a much more concrete form of hypothesis and allows detailed experimentation to examine the new materials’ properties and analyze how they interact with other molecules and materials.

The properties of matter at the nanometer scale (between one and 100 nanometers) often differ significantly from the properties of the same atoms and
molecules when they are clustered in bulk. These differences have allowed technologists to use nanomaterials on the surfaces of common products in order to eliminate rust, enhance resistance to scratches and dents, and in clothes to enhance
resistance to stains, wrinkles, and fire. The single most common application thus far is the use of nanoscale silver to destroy microbes—a use that is particularly important for doctors and
hospitals guarding against infections.

The longer-term significance that attaches to the emergence of an entirely new group of basic materials with superior properties is reflected in the names historians give to the ages of technological achievement in human societies: the Stone Age, the Bronze Age, and the Iron Age. As was true of the historical stages of economic development that began with the long hunter-gatherer period, the first of these periods—the Stone Age—was by far the longest.

Archaeologists disagree on when and where the reliance on stone tools gave way to the first metallurgical technologies. The first smelting of copper is believed to have taken place in eastern Serbia approximately 7,000 years ago, though objects made of cast
copper emerged in numerous locations in the same era.

The more sophisticated creation of bronze—which is much less brittle and much more useful for many purposes than copper—involves a process in which tin is added to molten copper, a technique that
combines
high temperatures and some pressurization. Bronze was first created 5,000 years ago in both Greece and China, and
more than 1,000 years later in Britain.

Though the first iron artifacts date back
4,500 years ago in northern Turkey, the Iron Age began between 3,000 and 3,200 years ago with the development of better furnaces that achieved higher temperatures capable of heating iron ore into a malleable state
from which it could be made into tools and weapons. Iron, of course, is much
harder and stronger than bronze. Steel, an alloy made from iron, and often other elements in smaller quantities, depending upon the properties desired, was
not made until the middle of the nineteenth century.

The new age of materials created at the molecular level is leading to a historic transformation of the manufacturing process. Just as the Industrial Revolution was launched a quarter of a millennium ago by the marriage of coal-powered energy with machines in order to replace many forms of human labor, nanotechnology promises to launch what many are calling a Third Industrial Revolution based on molecular machines that can reassemble structures made from basic elements to
create an entirely new category of products, including: