Field Notes on the Automation Trap (06 August 2016)
Your weekly notes on happenings, news, signals related to automation and alternative means on economic development. See more at The Automation Trap.
I. ROBOTS IN THE NEWS
The Second Order Impact of Self-Driving Cars
Chris Dixon, a partner at Andreessen Horowitz, sees self-driving cars could mean: more space for parks, not car parking, more room for pedestrians and less traffic. Link.
Singapore First to have Self-Driving Taxis?
Singapore’s Land Transport Authority and Delphi Automotive Plc will be testing self-driving cars – six modified Audi Q5 – this year. See more at Bloomberg. These self-driving taxis are expected to cost one-third less than a human-piloted taxi ride (felt weird writing that).
Plus, why Singapore is the perfect place for testing self-driving cars.
Higher Wages mean Less Automation?
UCSD economists find that higher wages discourages automation. They find that automation often compliments cheap low-skilled labour. Higher wages encourages companies to higher better skilled workers, lessening the benefit of using automation. Via Marginal Revolution. See PDF of paper.
McKinsey sees China Leading the Robot Revolution
Chairman of McKinsey Asia & the director of McKinsey Global Institute make the case for China as ground zero for robotic automation technologies. Some interesting tidibits:
- “The provinces of Guangdong and Zhejiang alone have allocated $150 billion and $120 billion, respectively, over the next five years to equip factories with industrial robots.”
- “Midea Group,one of China’s leading appliance makers, is investing $800 million over the next five years to automate its residential air-conditioning subsidiary.“
See more in their WSJ article.
II. SLOWING GROWTH
Economist and Vox on Developed Countries’ Slowing Growth
Vox surveys why the US appears to be muddled in slow growth: lack of innovation, lack of spending, corporate underinvestment, debt weighing down economy, excessive regulation, and housing regulation. On a related tangent, the Economist explores developing countries balancing act of high-debt and aging populations (shrinking workforce).
Dropping Standards of Living in Developed Countries?
The McKinsey Institute found that up to 70% of people in developed countries “have seen incomes stagnate.” Unsurprisingly, McKinsey found a link people suffering stagnant incomes and “[supporting] nationalist political parties such as France’s National Front or, in the United Kingdom, to support the move to leave the European Union.” They warned that potentially “increased automation would result in 30-40% of households seeing no advance in their incomes even if growth accelerated.”
Meanwhile, a UK-focused study by the Resolution Foundation found the under-36s are “earning £8,000 less in their twenties than Generation X workers” and paying “£44,000 more on rent by the time they reach 30 compared to the baby boomers, and £25,000 more than Generation X.” Via BBC News.