Emerging Technologies and employment

Emerging Technologies to be aware of from 2013

More thoughts from the World Economic Forum, Davos 2013

With my thoughts on whether and how these could create or transform employment.

OnLine Electric Vehicles (OLEV)

Wireless technology can now deliver electric power to moving vehicles.  In next-generation electric cars, pick-up coil sets under the vehicle floor receive power remotely via an electromagnetic field broadcast from cables installed under the road. The current also charges an onboard battery used to power the vehicle when it is out of range.  As electricity is supplied externally, these vehicles need only a fifth of the battery capacity of a standard electric car, and can achieve transmission efficiencies of over 80%.  Online electric vehicles are currently undergoing road tests in Seoul, South Korea.

The resources required to embed such cables mean that this technology may take time to install and may be limited to major roads or densely populated areas.  Paying for energy picked up while driving also raises issues.  Perhaps a hybrid solution will be to have cables installed in parking spaces, driveways, etc. that can be switched on or off from home or office.  Installation and maintenance would produce jobs.

3-D printing and remote manufacturing

Three-dimensional printing allows the creation of solid structures from a digital computer file, potentially revolutionizing the economics of manufacturing if objects can be printed remotely in the home or office.  The process involves layers of material being deposited on top of each other in to create free-standing structures from the bottom up.  Blueprints from computer-aided design are sliced into cross-section for print templates, allowing virtually created objects to be used as models for “hard copies” made from plastics, metal alloys or other materials.

At present this technology seems to be limited to manufacturing objects from a single material source (e.g. plastic or alloy), it could make the production of primary components more cost effective, but will it produce more jobs ?

Self-healing materials

One of the defining characteristics of living organisms is their inherent ability to repair physical damage.  A growing trend in bio-mimicry is the creation of non-living structural materials that also have the capacity to heal themselves when cut, torn or cracked.  Self-healing materials which can repair damage without external human intervention could give manufactured goods longer lifetimes and reduce the demand for raw materials, as well as improving the inherent safety of materials used in construction or to form the bodies of aircraft.

This reads like science fiction and it is probable that jobs created by the development of these technologies will be in the research and development of materials and manufacturing.  Limited growth in jobs manufacturing, perhaps more a transformation / raising of the skills required.

Energy-efficient water purification

Water scarcity is a worsening ecological problem in many parts of the world due to competing demands from agriculture, cities and other human uses.  Where freshwater systems are over-used or exhausted, desalination from the sea offers near-unlimited water but a considerable use of energy, mostly from fossil fuels, to drive evaporation or reverse-osmosis systems.  Emerging technologies offer the potential for significantly higher energy efficiency in desalination or purification of wastewater, potentially reducing energy consumption by 50% or more.  Techniques such as forward-osmosis can additionally improve efficiency by utilizing low-grade heat from thermal power production or renewable heat produced by solar-thermal geothermal installations.

This technology would generate jobs in construction, maintenance, logistics.  Primarily not in the UK, which has less of a water supply problem than some other parts of the world, but ‘solution technologies’ are exportable and people who work in key global industries today often work abroad.

Carbon dioxide (CO₂) conversion and use

Long-promised technologies for the capture and underground sequestration of carbon dioxide have yet to be proven commercially viable, even at the scale of a single large power station.  New technologies that convert the unwanted CO₂ into saleable goods can potentially address both the economic and energetic shortcomings of conventional CCS strategies.  One of the most promising approaches uses biologically engineered photosynthetic bacteria to turn waste CO₂ into liquid fuels or chemicals, in low-cost, modular solar converter systems.  Individual systems are expected to reach hundreds of acres within two years.  Being 10 to 100 times as productive per unit of land area, these systems address one of the main environmental constraints on bio-fuels from agricultural or algal feedstock, and could supply lower carbon fuels for automobiles, aviation or other big liquid-fuel users.

Creating an artificial ‘carbon cycle’ to manufacture carbon based fuel from carbon dioxide extracted from the atmosphere by algae producing a ‘pure’ carbon based fuel rather than a raw oil requiring refining, will require considerable infrastructure replacing existing oil and gas extraction and processing facilities, not necessarily in the same locations and quite possibly requiring a larger ‘footprint’.  This will generate jobs in construction, engineering, biotechnology and, logistics.

The extraction and sequestration of carbon from the atmosphere, if this is felt necessary, would require the installation of inert carbon filtering structures, essentially artificial trees.  Sequestered carbon could be collected and sequestered underground or potentially the carbon and oxygen split.  Carbon has a growing number of applications; carbon fibre, graphene film, etc.

Enhanced nutrition to drive health at the molecular level

Even in developed countries millions of people suffer from malnutrition due to nutrient deficiencies in their diets.  Now modern genomic techniques can determine at the gene sequence level the vast number of naturally consumed proteins which are important in the human diet.  The proteins identified may have advantages over standard protein supplements in that they can supply a greater percentage of essential amino acids, and have improved solubility, taste, texture and nutritional characteristics.  The large-scale production of pure human dietary proteins based on the application of biotechnology to molecular nutrition can deliver health benefits such as muscle development, managing diabetes or reducing obesity.

Creating jobs in research and manufacturing; and changes to work related knowledge and training for health professionals, food scientists, personal trainers, etc.

Remote sensing

The increasingly widespread use of sensors that allow often passive responses to external stimulae will continue to change the way we respond to the environment, particularly in the area of health.  Examples include sensors that continually monitor bodily function; such as heart rate, blood oxygen and blood sugar levels, and if necessary, trigger a medical response such as insulin provision.  Advances rely on wireless communication between devices, low power-sensing technologies and, sometimes, active energy harvesting.  Other examples include vehicle-to-vehicle sensing for improved safety on the road.

The manufacture of sensors will produce some employment.  The introduction of sensors will modify many jobs; already some vehicles have parking or other sensors, researchers are developing systems that can safely control cars and software that can learn routes, the management of some medical conditions may be transformed.

Precise drug delivery through nanoscale engineering

Pharmaceuticals that can be precisely delivered at the molecular level within or around a diseased cell offer unprecedented opportunities for more effective treatments while reducing unwanted side effects.  Targeted nano-particles that adhere to diseased tissue allow for the micro-scale delivery of potent therapeutic compounds while minimizing their impact on healthy tissue, and are now advancing in medical trials.  After almost a decade of research, these new approaches are finally showing signs of clinical utility.

 This will obviously affect the pharmaceutical industry, but will this significantly increase or decrease employment ?

Organic electronics and photovoltaics

Organic electronics (a type of printed electronics) is the use of organic materials such as polymers to create electronic circuits and devices.  In contrast to traditional (silicon-based) semiconductors that are fabricated with expensive photolithographic techniques, organic electronics can be printed using low-cost, scalable processes such as ink jet printing, making them extremely cheap compared with traditional electronics devices, both in terms of the cost per device and the capital equipment required to produce them.  While organic electronics are currently unlikely to compete with silicon in terms of speed and density, they have the potential to provide a significant edge in cost and versatility.  The cost implications of printed mass-produced solar photovoltaic collectors, for example, could accelerate the transition to renewable energy.

Potentially thin sheets of solar voltaic collectors could be added to roofs and walls to generate electricity using fewer resources.

Fourth-generation reactors and nuclear-waste recycling

Current once-through nuclear power reactors use only 1% of the potential energy available in uranium, leaving the rest radioactively contaminated as nuclear “waste”. While the technical challenge of geological disposal is manageable, the political challenge of nuclear waste seriously limits the appeal of this zero-carbon and highly scalable energy technology.  Spent-fuel recycling and breeding uranium-238 into new fissile material (known as Nuclear 2.0) would extend already-mined uranium resources for centuries while dramatically reducing the volume and long-term toxicity of wastes, whose radioactivity will drop below the level of the original uranium ore on a timescale of centuries rather millennia.  This makes geological disposal much less of a challenge (and arguably even unnecessary) and nuclear waste a minor environmental issue compared to hazardous wastes produced by other industries. Fourth-generation technologies, including liquid metal-cooled fast reactors, are now being deployed in several countries and are offered by established nuclear engineering companies.

Research is also being done into the development of reactors that would use Thorium, a less hazardous radioactive element, which is abundant in several parts of the word, for example Norway.  Continued, and safer, use of nuclear energy offers employment in construction, and in the nuclear industry.

Davos 2013

The World Economic Forum

Committed to Improving the State of the World

Below is a brief summary of the main themes / concerns of Davos 2013. 

The conference also considered emerging technologies, equality issues and threats to global socio-economic security. 

The theme of Davos 2013 was Resilient Dynamism:

§  Leading Through Adversity;

§  Restoring Economic Dynamism;

§  and Strengthening Societal Resilience

Which means what ?

§  Economies affected by the financial crisis remain fragile and need to gain resilience, actions by governments and central banks avoided collapse, but there is real danger of relapse

§  The world has moved from ‘crisis response’ to structural reform; dynamism is about moving on from austerity to the investment required to create employment

“We are awash in cash, but we continue to invest as if cash were scarce,

We are not investing in innovations that create growth.”

Clayton Christensen, Professor of Business Administration,

Harvard Graduate School of Business Administration, USA.

Unemployment

“Davos has been too optimistic, the underlying issue is jobs.

There are 200 million people unemployed worldwide.”

FredericoCurado,

President and Chief Executive Officer, EMBRAER, Brazil

§  11 million in Europe and the US made unemployed in consequence of the Global Financial Crisis

§  Europe 25 million unemployed and 3 million vacancies that cannot be filled

§  The unemployment rate among young people; 44% in Greece, 30% in Portugal, 29% in Italy, 26% in Poland and 22% in France

The information age has replaced much human labour with ‘automation’ but has also had an impact on human labour, of which greater efficiency is expected.  But what the world needs is a system that is more resilient and that means getting people not to be ever more efficient, but to encourage them, and equip them, to be more creative.

There is a consensus that the “grow at all cost” model is no longer viable in the post-crisis world. Not only is it destructive of the environment but it also tends to concentrate the wealth in a few hands.

Reflecting on the Financial Crisis

The Global Financial Crisis was a governance crisis originating in the financial sector.  That sector hid too much of its activity in “dark and murky corners” (Christine Lagarde) and “put its own short term gain ahead of supporting the real economy”.

Accountability is crucial. “The goal of the private sector cannot be only profit; it must also add value, create jobs [and] develop the new ideas that drive an economy forward,” she said. “We need a financial sector that is accountable to the real economy, one that adds value, not destroys it.”

According to Professor Stiglitz (Columbia University, Nobel Prize in Economics Science 2001) the global financial system still needs to be fixed, there is still a murky trade in derivative products of unclear value that poses a threat to economic stability.

Moving on from 2012

2012 was about whether the Euro would collapse, the US fiscal cliff and concerns that the Chinese economy could hit serious problems.  The view from Davos was that 2013 should be about jobs and growth.

Too many nations retreating from addressing long term issues of sustainability, infrastructure, agriculture, energy production, education and health, to focus on domestic and economic challenges.

Responsible Capitalism; businesses and share holders cannot continue to think short term, they must think of long term sustainability, of what their business can contribute socially and economically as well as ‘the bottom line’.  If ‘Responsible Capitalism’ emerges from the wreckage of the Global Financial Crisis it will take some years for it to fully evolve.

Economics and the Financial Crisis

The financial crisis is persistent; it has had and continues to have profound effects on the state of the UK Labour Market.

A few months ago the BBC’s Economics Editor Stephanie Flanders presented a series of three programmes reviewing the contributions of Keynes, Hayek and Marx to economic theory and the relevance of their observations and ideas to the current financial crisis and to the task of finding a way out of it.

This post summarises this and adds other comments about other ideas that are relevant to the economy and the crisis.

Keynes

In the 1970s the Keynesian approach to managing economies, the approach that had fixed the world after the Wall Street Crash and the Great Depression began to fail.

Keynes is referenced in current times by those who believe that investment in infrastructure will stimulate the economy, that we can spend our way out of recession.  Actually Keynes’ relevance to our current circumstances and to the Financial Crisis, from which we have yet to begin to recover, is rather his observation, made at the time of the Wall Street Crash and the Great Depression, that people behaved with a herd mentality, both when investing and when panicking.  Keynes’ lasting importance is this observation.

Hayek

Hayek wrote in “The Road to Serfdom” that while the government has a role to play in the economy through the monetary system, work-hours regulation, institutions for the flow of proper information, and other principles commonly accepted by most members of a free society.  He argued that central planning and for example government control, for example nationalised industries, tended toward totalitarianism.  He argued for individual freedom and choice and classical liberalism; limited government and laissez faire economic policy (the free market).

Economic advisers of Margaret Thatcher’s government proposed a ‘third way’ between post war central planning and the free market, but Margaret Thatcher rejected that stating that she believed in Hayek.

But first, the rise of neo-liberalism and deregulation, from the late 1970s to the financial crisis:

Leading economies at the time, led by the US and the UK put their trust in neo-liberal free market economics.  For more than a generation we have been told that market forces should be allowed to self regulate, but this is based on the assumptions that:

§  Markets are efficient

§  Markets are virtuous

§  Markets are ‘intelligent’

If all those are true, then why was there a financial crisis ?

Markets are made up of people, and while people can individually or in cooperative groups behave intelligently, in large groups, in which there is limited communication or active competition, e.g. in markets, people tend to behave with a herd mentality leading to ‘boom and bust’.  Also people and financial institutions can, as has been recently shown, be corrupt and insufficient regulation will allow markets to be manipulated, distorted.

The proposed responses to the financial crisis are austerity combined with a faith that the free market will adjust, or Keynesian investment in infrastructure, building, etc. to stimulate growth.

Marx

Marx: wrote more about economics than communism; didn’t foresee that capitalism plus technological change had the potential to deliver acceptable standard of living for the majority, did foresee the need for capitalism to adapt / evolve / reinvent.

Since the financial crisis that acceptable living standard for the majority has been eroded, while the wealthiest seem to remain untouched or to continue to prosper.  In terms of Marxian economics the time has come for capitalism to evolve and reinvent itself.  But what would this new capitalism be like ?

There are two other theorists to note:

Philips

Bill Philips had before becoming an economist been a hydraulic engineer.  He observed that money flowed in the economy like water and built a ‘hydraulic computer’ as a teaching aid to simulate the economy, using water to represent money and controls and reservoirs to model the flow of money and the effects of taxation, investment and stimuli.  This model gave rise to the concept of the ‘the machine of the economy’ and the economy being seen as mechanistic, predictable, like a complex hydraulic clock.  Recent experience has shown the economy is more like an organism, or a collection of organisms, responding to stimuli, but not in a predictable way, like a herd or flock, not a machine.

Schelling

Thomas Schelling applied ‘game theory’ better perhaps understood as ‘active decision theory’ to economics.  Game theory has been used to describe, predict, and explain behavior in a range of situations and disciplines, also to develop theories of ethical or normative behavior.  In economics scholars have applied game theory to help in the understanding of good or proper behavior.

The classic ‘game theory’ situation is one where two players cannot beat each other, but establish a state of equilibrium, a continuous draw.

In recent years software has been developed to help investment managers.  This software has been based on ‘game theory modeling’.  Unfortunately reliance on this software seems to have contributed to the development of the financial crisis, which poses two questions:

§  Has this produced computer assisted herd behaviour ?

§  Is the software intelligent enough ?

But perhaps the answer to the reinvention of capitalism lies not in a Keynesian response, though that proved to be the cure for the Great Depression, but in ‘Game Theory’.  The application of Game Theory to the cold war nuclear standoff led to strategic arms limitations.  Both sides saw greater advantage in limiting their destructive capability rather than continuing to build up weapon stockpiles.

Money: its origin and purposes:

Money is a human construct, a concept, traditionally given physical form, more recently recorded electronically. 

When we were little and first went to school we were told that before money people would barter.  This would only work where two participants in an exchange wanted what the other had to offer and could agree a price, e.g. how many chickens equal one goat, or how many sacks of grain.  Money was invented as a way of representing and quantifying relative value to facilitate exchange.  But this assumes that market economies predate money.

In non-market economies, much trade is gifted or exchanged as favours to be cashed at a later date; exchange is as much about cementing social bonds as it is about ‘commercial activity’.  People bound by family relationships or community cooperating for mutual benefit.

For money when it is introduced to facilitate exchange tends to be introduced by a central authority, primarily to facilitate the transactions of that central authority.  Money is easier to collect and store than agricultural produce or other bulky resources, it facilitates taxation, state payment for goods, services, etc.

Taxation began in pre-monetary societies that collected taxes in kind; food, labour, materials and used redistribution of the taxed resources to facilitate specialist functions; military, religious, specialist craft and art.  Records of transactions, in effect tax receipts, were kept on clay tablets or papyrus or as coded knots on strings.  Money, coinage, could stand in for resources and simplify record keeping.  Later it became a common means of commercial exchange.

Money has two functions; it is a medium of exchange, circulating in the economy, but also a store of wealth.

Austerity and uncertainty mean too little money is being used as a medium of exchange and too much as a store of wealth.  Corporations are sitting on wealth rather than investing, the general population are facing a combination of employment uncertainty and imported inflation. The UK is not exporting its way out of recession nor is the economy rebalancing.

Keynes would recommend investment in infrastructure, building homes and greening the economy, Marx would advise that capitalism must reform itself and Schelling would recommend that the wealthy should see it in their own interest to invest in social stability, then some, perhaps much, of the wealth that is currently accumulating in the hands of the wealthy can flow back to the rest, via taxation and investment, and capitalism can again deliver an acceptable standard of living for the majority.