> automation tools ... eliminates the boring part of the job, and then the job description shifts.
But the job had better take fewer people, or the automation is not justified.
There's also a tradeoff between automation flexibility and cost. If you need an LLM for each transaction, your costs will be much higher than if some simple CRUD server does it.
Here's a nice example from a more physical business - sandwich making.
Start with the Nala Sandwich Bot.[1] This is a single robot arm emulating a human making sandwiches. Humans have to do all the prep, and all the cleaning. It's slow, maybe one sandwich per minute. If they have any commercial installations, they're not showing them.
This is cool, but ineffective.
Next is a Raptor/JLS robotic sandwich assembly line.[2] This is a dozen robots and many conveyors assembling sandwiches. It's reasonably fast, at 100 sandwiches per minute. This system could be reconfigured to make a variety of sandwich-format food products, but it would take a fair amount of downtime and adjustment.
Not new robots, just different tooling. Everything is stainless steel or food grade plastic, so it can be routinely hosed down with hot soapy water. This is modern automation. Quite practical and in wide use.
Finally, there's the Weber automated sandwich line.[3] Now this is classic single-purpose automation, like 1950s Detroit engine lines. There are barely any robots at all; it's all special purpose hardware. You get 600 or more sandwiches per minute. Not only is everything stainless or food-grade plastic, it has a built-in self cleaning system so it can clean itself.
Staff is minimal. But changing to a product with a slightly different form factor requires major modifications and skills not normally present in the plant. Only useful if you have a market for several hundred identical sandwiches per minute.
These three examples show why automation hasn't taken over. To get the most economical production, you need extreme product standardization. Sometimes you can get this. There are food plants which turn out Oreos or Twinkies in vast quantities at low cost with consistent quality. But if you want product variations, productivity goes way, way down.
> But the job had better take fewer people, or the automation is not justified.
In many cases, this is a fallacy.
Much like programming, there is often essentially an infinite amount of (in this case) bookkeeping tasks that need to be done. The folks employed to do them work on the top X number of them. By removing a lot of the scut work, second order tasks can be done (like verification, clarification, etc.) or can be done more thoroughly.
Source: Me. I have worked waaaay too much on cleaning up the innards of less-than-perfect accounting processes.
Well said. It’s like they think that the only thing automation is good for is cutting costs. You can keep the same staff size but increase output instead, creating more value.
"They" don't think the only thing automation is good for is cutting costs. Management thinks the only thing worth doing, at all, using any means, is cutting costs.
> The firm simply assumes that if the top X was sufficient in the past, it is still sufficient now.
> From the perspective of modern management, there's really no reason to keep people if you can automate them away.
These are examples of how bad management thinks, or at best, how management at dying companies think.
Frankly, this take on “modern management” is absurd reductionist thinking.
Just a few points about how managers in successful companies think:
- Good employees are hard to find. You don’t let good people go just because you can. Retraining a good employee from a redundant role into a needed role is often cheaper than trying to hire a new person.
- That said, in any sufficiently large organization, there is usually dead weight that can be cut. AI will be a bright light that exposes the least valuable employees, imho.
- There is a difference between threshold levels of compliance (e.g., docs that have to be filed for legal reasons) and optimal functioning. In accounting, a good team will pay for themselves many times if they have the time to work on the right things (e.g., identifying fraud and waste, streamlining purchasing processes, negotiating payment terms, etc.). Businesses that optimize for making money rather than getting a random VP their next promotion via cost-cutting will embrace the enhanced capability.
Yes, AI will bring about significant changes to how we work.
Yes, there will be some turmoil as the labor market adjusts (which it will).
No, AI will not lead to a labor doomsday scenario.
> Is Microsoft a "dying company"? The stock market certainly thinks otherwise.
This is the entire sentence that I wrote that you seem to be referring to:
“These are examples of how bad management thinks, or at best, how management at dying companies think.”
MS falls under the first part — bad management. Let literacy be your friend.
To elaborate, yes, I think that MS is managed incredibly poorly, and they succeed despite their management norms and culture, not because of it. They should be embarrassed by their management culture, but their success in other areas of the company allows the bad management culture to persist.
> - Good employees are hard to find. You don’t let good people go just because you can. Retraining a good employee from a redundant role into a needed role is often cheaper than trying to hire a new person.
Your best employees at a given price though.
Part of firm behavior is to let go of their most expensive workers when they decide to tighten belts.
Unless your employee is unable to negotiate, lacking the information and leverage to be paid the market rate for their ability. Your best employees will be your more expensive, senior employees.
Everything is at a certain price. Firing your best employee when you can get the job done with cheaper, or you can make do with cheaper, is also a common and rational move.
While I agree it’s unlikely that there won’t be a labour doomsday scenario, I think ann under employment scenario is highly likely. Offshoring ended up decimating many cities and local economies, as factory foremen found new roles as burger flipper.
Nor do people retrain into new domains and roles easily. The more senior you are, the harder it is to recover into a commensurately well paying role.
AI promises to reduce the demand for the people in the prime age to earn money, in the few high paying roles that remain.
Not the apocalypse as people fear, but not that great either.
For a full cart, I expect a cashier or to be available.
If I have 3-5 items, I’d rather do it myself than wait.
That said, even 20-30 years ago, long before self checkout, at places like WalMart, one could wait 15-20 minutes in line. They had employees but were too cheap to have enough. They really didn’t care.
I don’t even understand how that math works. I might have kept going there if they had a few extra lowly paid cashiers around.
> But the job had better take fewer people, or the automation is not justified.
Not necessarily. Automation may also just result in higher quality output because it eliminates mistakes (less the case with "AI" automation though) and frees up time for the humans to actually quality control. This might require the people on average to be more skilled though.
Even if it only results in higher output volume you often have the effect that demand grows also because the price goes down.
There's a classic book on this, "Chapters on Machinery and Labor" (1926). [1]
They show three cases of what happened when a process was mechanized.
The "good case" was the Linotype. Typesetting became cheaper and the number of works printed went up, so printers did better.
The "medium case" was glassblowing of bottles. Bottle making was a skilled trade, with about five people working as a practiced team to make bottles. Once bottle-making was mechanized, there was no longer a need for such teams. But bottles became cheaper, so there were still a lot of bottlemakers. But they were lower paid, because tending a bottle-making machine is not a high skill job.
The "bad case" was the stone planer. The big application for planed stone was door and window lintels for brick buildings. This had been done by lots of big guys with hammers and chisels. Steam powered stone planers replaced them. Because lintels are a minor part of buildings, this didn't cause more buildings to be built, so employment in stone planing went way down.
Those are still the three basic cases. If the market size is limited by a non-price factor, higher productivity makes wages go down.
I think this is probably the trajectory for software development because while people claim there is a potentially unlimited demand that really only occurs at rock bottom prices.
In many cases you can saturate the market. The stone planer examples is an early case. Cheaper lintels don't mean more windows, because they are a minor part of the cost. Cheaper doorknobs do not generate demand for more doorknobs, because the market size is the number of doors. Cheap potatoes, soy, corn, and cheese have saturated their markets - people can only eat so much.
This might also be true of web analytics. At some point, more data will not improve profitability.
No? You don’t only gain justification for automation by cutting costs. You can gain justification by increasing profits. You can keep the same amount of people but use them more efficiently and you create more total value. The fact you didn’t consider this worries me.
Also the statement “show why automation hasn’t taken over” is truely hysterically wrong. Yeah, sure, no automation has taken over since the Industrial Revolution
You can increase profits by cutting costs. It is remarkably easier to do in the short term. And even if you choose not to downsize you can drop/stagnate wages to gain from the fact everyone else is downsizing.
The Nala bot reminded me of the guys at Felipe's in Cambridge MA. When they're building burritos during dinner rush, you'd swear to god that multiple different ingredients were following a ballistic trajectory toward the tortilla at any given time. If there was a salsa radar it would show multiple inbounds like the Russkies were finally nuking us.
ETA: It didn't remind me of this because the robot is good at what it does. It reminded me of just how far away from human capabilities SOTA robotic systems are.
Thank you. Having automation means process control, which means handling sources of variation for a defined standard/spec.
The claims of all jobs being done by AI end up also assuming that we will end up with factories running automated assembly lines of thought.
I have been losing my mind looking at the output of LLMs and having to nail variability down.
But the job had better take fewer people, or the automation is not justified.
There's also a tradeoff between automation flexibility and cost. If you need an LLM for each transaction, your costs will be much higher than if some simple CRUD server does it.
Here's a nice example from a more physical business - sandwich making.
Start with the Nala Sandwich Bot.[1] This is a single robot arm emulating a human making sandwiches. Humans have to do all the prep, and all the cleaning. It's slow, maybe one sandwich per minute. If they have any commercial installations, they're not showing them. This is cool, but ineffective.
Next is a Raptor/JLS robotic sandwich assembly line.[2] This is a dozen robots and many conveyors assembling sandwiches. It's reasonably fast, at 100 sandwiches per minute. This system could be reconfigured to make a variety of sandwich-format food products, but it would take a fair amount of downtime and adjustment. Not new robots, just different tooling. Everything is stainless steel or food grade plastic, so it can be routinely hosed down with hot soapy water. This is modern automation. Quite practical and in wide use.
Finally, there's the Weber automated sandwich line.[3] Now this is classic single-purpose automation, like 1950s Detroit engine lines. There are barely any robots at all; it's all special purpose hardware. You get 600 or more sandwiches per minute. Not only is everything stainless or food-grade plastic, it has a built-in self cleaning system so it can clean itself. Staff is minimal. But changing to a product with a slightly different form factor requires major modifications and skills not normally present in the plant. Only useful if you have a market for several hundred identical sandwiches per minute.
These three examples show why automation hasn't taken over. To get the most economical production, you need extreme product standardization. Sometimes you can get this. There are food plants which turn out Oreos or Twinkies in vast quantities at low cost with consistent quality. But if you want product variations, productivity goes way, way down.
[1] https://nalarobotics.com/sandwich.html
[2] https://www.youtube.com/watch?v=_YdWBEJMFyE
[3] https://www.youtube.com/watch?v=tRUfdBEpFJg