Robotics and Economics

Ninety years ago, the Czech journalist and author Karel Capek introduced the word "Robot" to the world in his play, "R.U.R. (Rossum's Universal Robots)." Isaac Asimov expanded the concept in his I, Robot books.

A staple of science fiction of the forties and fifties was the question of how society might cope with the circumstance created if robots with a wide range of capabilities were to replace humans in routine or even challenging jobs (as did HAL in "2001, Space Odyssey").

We are now there. We get our money from robots (ATM's), we send robots in to fight fires where no human could survive, we use robots to do surgery, dispatch software robots to search the internet, and even use robots to fight our wars.

This is just the beginning.

This Wednesday, IBM will pit its artificial intelligence system named Watson against two of the world's best Jeopardy players. Experts expect that Watson will win the contest. If so, it would be a demonstration of the amazing progress in artificial intelligence. To succeed, Watson will have to deal with puns, homonyms, and contextual ambiguities. (Update as of Tuesday morning: The first round of Jeopardy ended with Watson in a tie for the lead. Stay tuned.)

A different but also successful approach to use of computers to assist human intelligence is known as Intelligence Augmentation (IA). Google searches are a successful implementation of IA.

Economists have always held that increased automation creates as many new jobs as it destroys. That may no longer be the case (if ever it was). For the past few recessions, we seem to have had a "jobless recovery."

The usual suspect for loss of jobs is offshore outsourcing. It may be that another factor is increasing use of computers to perform tasks formerly done by humans. An additional influence is that high speed broad band internet makes it possible to transmit any information that can be digitized to offshore sites for processing. This is already done for widely diverse fields including accounting, law and radiology. Combining offshore outsourcing, robotics and high speed internet could be creating a perfect storm of economic restructuring.

The volume of such outsourcing is said to be small compared to the economy as a whole, but it probably already influences salaries by establishing marginal salaries above which companies will seek offshore solutions, thus keeping labor rates down.

Possible consequences include the fact that twenty-six percent of recent college graduates not going on to postgraduate education are unemployed. For that matter, many of those pursuing graduate degrees may be doing so because they couldn't find a job.