{UAH} The Future of Industries

Future Industries -What Drives the next 20 Years of Change?

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Posted March 12, 2016

Keywords: Economic Sustainability

To think about the future requires optimism. Depression can't see a future at all, fear doesn't want to see one, anger laments that it won't be like the past.

But as the German novelist and writer Martin Walser recently observed, "there is no presence that isn't crying out for a future". There are at least three strong reasons for planning a future: ethics (things may not remain the way they are), philosophy (the presence is nothing but the confluence of past and future) and physics (the "arrow of time" or entropy is irreversible).

So we turn to Baltimore resident, Johns Hopkins Fellow and former Special Advisor for Innovation at the State Department Alec Ross to learn about the future and "how the next wave of innovation and globalization will affect our countries, our societies and ourselves" (book cover), Ross has written a whole book about the future. But he isn't just a blue-eyed optimist writing "the typical techno-utopian fantasy" nor is he the whiny pessimist issuing a "the luddite jeremiad" (quotes from the Forbes review of his book). In his recently published book The Industries of the Future he "strikes a calm tone, never ceasing to consider the human cost of technological progress" (Forbes). Ross responds to his own question of "what is next after digitalization"? and shows both the possibilities and risks of what he thinks will come.

 

 

The field of those who think and write about the future is not very large and, according to Ross, divides into the camps of Utopians and Dystopians, just as the Forbes magazine observed. The usual menu when it comes to the glance into the future is rosy futures and horrifying futures. Ross says he wears a chip on both shoulders. 

Ross felt compelled to share the knowledge gained from his journeys to 41 countries. He met dignitaries, heads of State, billionaires and many ordinary people along the way. Those privileges or having been at home in the White House Situation Room have not gone to his head and he is able to coolly weigh those lofty experiences against his existential ones of growing up in West Virginia and teaching middle school in West Baltimore.

In a very accessible way he combines story telling with the encyclopedic knowledge he draws from having been sent around the world by Hillary Clinton when she was Secretary of State. His charge was to find out where the innovation is, how the US can help others and where we can learn from foreign lands.

Robot Spencer dispenses traveler advice at Shiphol Airport

The future doesn't just happen. It is in many ways a function of expectations: the path we expect, the path we want to see, the path we design. Between the hubris of  "we design the future" and passive "waiting what the future will bring" there is the responsible decision maker and politician who tries to find the doable and desirable path, who worries about promising more than can be delivered but also about aiming for less than what might be possible. Disappointment if high expectations are not met is a lesser price to pay compared to a squandered future due to timidity and low expectations. This, in particular, should be the leitmotif for each leader, whether presidential hopeful or candidate for mayor of Baltimore.

So a closer look at the new book of the Baltimorean Alec Ross and his take on the future should provide information to assess what should be done, urbi et orbi (in city and the world) as the Pope says, someone who certainly doesn't suffer from timidity and low expectations.

In the introduction of Industries of the Future Ross tracks the familiar decline of our manufacturing industries coupled with the rise of manufacturing in low wage countries and makes clear how cities rise and fall in lockstep with economic opportunity. He describes the technological arc in which the relevant raw materials that drove the economy changed from being the land (agriculture) to iron (industrialization) to data (knowledge age). It is us and the 16 billion digital devices that are globally in use who provide the data. Data, then can serve all kinds of industries, including agriculture (why are all farmers in northern New Zealand  rich, he asks and offers data optimized farming as the answer.)

But then he zooms in on Japan and that countries efforts of compensating labor shortages through robots. Robots with a cost structure inverse to humans (high initial cost but low operating cost), he predicts will replace not only the industrial worker (which welding or packaging robots have done already for a while) but also a good amount of service and even knowledge workers. Currently only five countries lead in making and using robots, one of them is the US and there is a chance that robots could give the US a similar lead as computing itself did. Modeling "belief space" (virtual environments that simulate real ones) is far advanced in the US and currently popularized with the self-driving Google cars that combine data collection and belief space in real time and so fast that the car can become a robot. However, Ross admonishes, less developed countries can leapfrog pretty easily into robotics, possibly skipping some ladder steps,as basic as industrialization, or at least computerization. This happens because the robot itself can be pretty simple if data are fed from "the cloud". To understand this we have to just think of the voice that gives us directions or of Siri, both drawing knowledge not from the handheld device itself but from the cloud. The device can be simple, then, having only to channel cloud data for our use.

The implications of the robot car (autonomous car or AV) are staggering all by themselves. The jobs of drivers being lost, the possibility of even more cars and trucks on the roads. Some say that the issues of legal, moral, and ethical nature are more difficult to solve that the technological ones. One thing seems to be clear, the driving robot may have the biggest implications for the future of cities. The implications of robotic service workers, nurses, law clerks and medical assistants are not far behind, especially when we consider how the robots will change the definition of work, the relation of work and leisure and the demands from those changes put on cities.

Alec Ross (official book photo)

An AV and a robot are still extensions of the digital revolution. A different territory altogether is genomics and life sciences, fields in which the US are still top but closely followed by China which has an entire top down strategy for these fields. Ross says that where we are today with genomics is where we were with the internet in 1994. He shows with a few examples how the internet and mobile phones can be useful tools in healthcare in areas with poor infrastructure and health delivery. It may well be that in genomics the ubiquity of digital devices also plays a role in the upcoming explosion of that field. The implications of genomics for cities depend on whether cities have important life science industries or research centers to become direct beneficiaries when the industry takes off. Baltimore is one of many metro areas that are trying to tap those industries with bio-parks nurtured in the shadows of large anchor institutions such as Johns Hopkins or the University of Maryland Medical Center. If genomics does what Ross anticipates, the field will spin off as many industries as the Internet did. One of the results of genomics could be that people live a lot longer which would mean a huge reservoir of potential urban dwellers in addition to the one the aging baby-boomers already present. Monitored by digital devices, the frail and elderly could also live much longer independent and still get the care when they need it.

Ross is optimistic about America, but he doesn't fail to show us that others are on our heels and many times already ahead of us. For example, small countries such as Estonia, whereSkype was invented, the flat tax and online voting have been implemented, and where citizens have blazing fast Internet thanks to excellent broadband that we can only dream about in the US. When asked about the state of infrastructure in the US and its poor condition as a possible impediment he first elaborates that rail and roads may become less important in the age of instant data transfer but then allows, that broadband penetration in the US is poor as well. (The US ranks #14 on the global scale). That, indeed, poses a real impediment, especially in a city like Baltimore where poor connectivity exacerbates the inequalities that are already so acute.

Ross devotes a chapter of his future predictions to the "code-ificiation of money" describing various ways towards a cash free economy with the potential of revolutionizing how payment is done. He has many examples from poor African countries where digitalization and ubiquity of smart phones became an equalizer of sorts especially in health care but also in the form of "codified money"  that allows folks without bank accounts to have secure funds that are not cash. The potential elimination of monetary institutions that still hold down poor residents either by denying access or being absent from poor communities can not be overestimated as a possible game changer that smart phones could provide. This has not really taken hold here yet and all the consequences that come from not have a checking account or a credit card and the exorbitant fees that come from surrogates such as check cashing places still persist.

All this ever faster change, digitization, the loss of industries, low cost competition, robots and genetics, it all seems like a giant conspiracy to many, a conspiracy with the single goal of making the life of the American middle class miserable.

As becomes blatantly obvious in the current endless campaign season, people are not exactly embracing a future that would be an extrapolation of the the present with loss of jobs and livelihood just so that the lucky few who make and sell the new stuff can get stinking rich by using cheap labor elsewhere. And since this seems to be precisely what is happening, anger, frustration and sticking the head in the sand have become so wide-spread that political candidates that fuel those sentiments don't need to fear for followers.

"Doubling down on the past" is what Alec Ross calls that and we see it in full force in the political "debate",  not only on the Republican side. But Ross also says that "the 21st century is a terrible time for a control freak". Open data, open borders, free trade and as freely an exchange of knowledge as possible is the only way to progress. That's an important difference between Estonia (open) versus Russia (closed and controlling).

 

 

Detroit's decline could not have been avoided by refusing to sign NAFTA or putting huge tariffs on imported cars . The fact that Detroit (the city and the US car industry) managed to work itself  part way out of the hole with much better cars made with much more efficiency, including robots is the result of innovation and creativity and open trade. Even a fully recovered and flourishing US car industry that would control the leading brands again would still use much less labor than in the past to produce those vehicles. And whatever cars will be made in Detroit, they will include thousands of parts that come from all over the world, no control freak can prevent that.

 

In other words, the past is not an option. "Making America great again" requires that politicians, unions and citizens of all colors and stripes begin to deal with the future, recognize what is on the horizon and turn it into opportunities. 

 

 

Digitization, robots and genetics provide hope and opportunity and not just further risk. It isn't far-fetched at all to weave the future industries that Ross describes into a trajectory of work from industrialization that brought the strict separation between work and leisure and the alienation of work that Marx and Engels described to a time where work or labor isn't any longer performed simply for money but to satisfy one's needs. For too long the purpose of money has been to be  "made" because it is the only means to get access to the essentials needed to survive. Wouldn't it be entirely plausible and even desirable to achieve a return to a condition where labor is directly used for sustenance? The implications of such a future in which work would once again be an expression of one's self (a vocation in the literal sense) would have vast impacts on how cities would be organized. Of course, it would require an entirely new way of distributing wealth, neither welfare state nor winner takes all. Stay tuned, maybe Iceland or Estonia will show us the way. 

 

Or Alec Ross gets another mission in the coming administration and can write another book describing that future.

Klaus Philipsen, FAIA
edited by Ben Groff, JD

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Bwanika Nakyesawa Luwero

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