For companies, it’s just a question of money.
Earlier this year, Citi Global Perspectives & Solutions came out with a report on what computerization and automation in the US will do to jobs. It built on a study that Oxford University had produced in 2013. By looking at ‘702 detailed occupations,’ it found that about 47% of all jobs would disappear over the next 10-15 years.
There are certain things that you have to understand. About 53% of the jobs will not disappear, and no job on the list will disappear totally. Some jobs will lose a lot of people, some jobs almost no people, which makes good logical sense.
For example, furriers (people who shoe horses) are still in demand. Not nearly as many as 100 years ago, but there is still a need for furriers.
When companies look at automation, they use a simple formula. You take the initial cost, add in interest to borrow the money, add in the cost of maintenance, and divide by the number of hours of useful life. That gives you a cost per hour.
Then you look at the cost of a human (or humans) per hour to do the same job with all the perks, and compare the two numbers. The lower number wins.
This post was published at Wolf Street by James Murray ‘ September 27, 2016.