Japan, McDonalds and Goldman Sachs

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What do Japan, McDonalds and Goldman Sachs have in common? They are all pointers that should make us stop to think about the future. Let us start with Japan.

What is happening to Japan could be happening to many other countries in the world. Japan’s birth rate is declining. The people are living longer and this is leading to their having to make up the gap by guest workers and students. Japan is investing heavily in building robots that can do more of what humans can. Immigration is still a bad word that frightens politicians in many countries. Japan is no exception.

According to FT,

“Japan’s native population fell by a record amount in 2016, but a jump in the number of foreign residents limited the overall annual decline. According to the Internal Affairs Ministry, the number of Japanese fell 308,084 to 125.6m, reflecting decades of low birth rates and population ageing. That was offset by a 7 per cent increase in the foreign resident population to 2.3m — a rise of 148,959 people — as increasing labour shortages led to inflows of students and guest workers.”

Birth rates have been dropping. Opening the doors to immigrants poses a social challenge. Japan has been fighting to preserve its ethnic homogeneity. So the guest workers coming in to learn technical skills under the “foreign trainee” scheme have to go back in three years. Their choice for Japan is between foreign workers and robots.

McDonalds replaces McJobs

McDonaldsElsewhere, Wall Street cheered McDonald’s decision to have digital kiosks in 2500 locations to do what cashiers would. The shareholders cheered loudly and McDonalds shares hit an all-time high. The move is part of an initiative ironically named as “Experience of the Future.” These “McJobs” have funded many students and families with living wages. That may not happen for long.

Trading engineers

It is not just blue collared jobs that are being replaced. Goldman Sachs had 600 equity traders in 2000. Today they employ just 2 of them. Trading has become largely automated. Goldman Sachs has added 200 engineers to support automated trading. Forrester forecasted that automation will cannibalise 17% of US jobs by 2027, partly offset by the growth of 10% new jobs from the automation economy.

McDonaldsAI powered robots

Robots are getting better at doing many jobs. Powered by ever improving technology machines are already better than humans in some tasks like recognizing faces in photos. That could have serious implications for professions such as radiologists. Machines could get far better than a human simply because they are trained on a larger data set. Machines are trained on millions of images before the machine learns what to look for. Once it gets the hang of it, the machines keep getting better. Learning for millions of images will take humans decades. AI driven robots solving complex problems, will grow to $48.5B by 2021.

While organizations have no choice but to rethink business models, they need to also start looking at reskilling their workforce. The next time you are at McDonalds and the cashier asks you, “Would you like fries with that?”, maybe you should ask, “Would you like jobs with that?”.

The dilemma of Japan will be faced by several countries. Will politicians be forced to change their views on immigration? Will skill shortages force the way we view talent? Love to know your views. Do leave your comments below.

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Written first for Times of India blogs

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Comments

  1. Vippan Raj Dutt says:

    What future are we going to leave for the next generation when they will have very few jobs and lots of expectations. Not all of them can manage the stress of high expectations and this is very scary especially in countries such as India, where there is no shortage of manpower.

  2. Jayesh says:

    A very good article and the fact of future is highlighted very nicely. Yes a manpower is an issue with countries like India and other countries who have huge population but we need to change the pattern of our education. What needs to be done at grass root level is change the entire education system and make one board for entire India where every one is learning same subjects needs to improve more and spend more on our teachers and professors. And the most important thing is to change our pattern of thinking why we are looking for job change and it’s just been 2 years you are looking for change and the lot more things at educational level plus at corporate level.

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