Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

How to solve a growing economy and a declining workforce?

On 1 February 2022, the FT reported that “Japan’s population shrank by 630,000 people [in 2021], or one Luxembourg. Between now and 2040, it is forecast to have declined by a further 16mn, or one Cambodia.” This news will be our new reality, following decades of doom messages on overpopulation.

Labour shortages are already common, while the Covid-19 pandemic is barely behind us. A growing economy and a declining (working) population will pose immense challenges for the forthcoming decades.

Our previous solutions were: (i) mechanization, (ii) automation, (iii) robotics, and (iv) artificial intelligence or AI. I doubt these will be enough because these solutions only work in mass and/or routine efforts. Is there a solution for creative and/or non-routine services?

In general, there are four segments:

People + Tools: mechanization is no longer enough for production and service industries and will need robotics to increase efficiency.

Tools + Money: industries like Banking will need AI on top of automation to increase efficiency.

Money + Knowledge: industries like Auditing will need to rely on data mining and artificial intelligence to offset labour shortages.

Knowledge + People: this creative and non-routine segment needs human intelligence and will be squeezed in a growing economy and a declining workforce.

Three out of these four segments follow the Technological Revolution of 1800-2100: (i) mechanization (1800-1900), (ii) automation (1900-2000), (iii) artificial intelligence and robotics (2000-onwards).

A different approach gives similar results:

  1. Known knowns: mechanization
  2. Unknown knowns: automation
  3. Known unknowns: artificial intelligence
  4. Unknown unknowns: no solution?

Again, the creative (imaginative) segment will be squeezed in a growing economy and a declining workforce

The absence of an immediate solution to the fourth (4th) quadrant will – probably – trigger old habits, like: (1) industry consolidation into (general) oligopolies, (2) specialization by boutique firms, (3) higher sales prices and margins, and (4) a War for Talent.

Late September 2021, I published my blog on Mechanization, Automation, AI & Robotics which concluded:

It seems that the Technological Revolution of 1800-2100 will result in humanoid sapiens (eg, new 2021 MIT initiative). This will cause economic obsolescence and – ultimately – technological obsolescence for homo sapiens. Hence, humanoid sapiens is likely to become the successor of homo sapiens.

Some day, humanoid sapiens may bring a solution to the 4th quadrant as our successor will combine human intelligence and an android packaging.

Harder, Better, Faster, Stronger (2001) by Daft Punk
artists, lyrics, video, Wiki-1, Wiki-2

[Intro]
Work it, make it
Do it, makes us
Harder, better
Faster, stronger

Note: all markings (bold, italic, underlining) by LO unless stated otherwise.

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