Under the tide of automation, will be replaced by machines are professional white-collar workers?

On July 15, "Iron Man" Musk said in a speech at the U.S. Governors Association that automation technology is bound to have a disruptive impact on the job market. Because in the future, robots will have the ability to do anything humans do, and do it better than humans.

The attention of the US heads of state in the room was immediately mobilized by Mr Musk, because if so, the impact of automation on the job market will be more direct and profound than that of low-priced imports from developing countries, directly hitting the electoral base of these politicians.

Mark P. Mills, a research fellow at the Manhattan Institute and a professor at Northwestern University, recently wrote in City Journal that automation will replace white-collar workers sooner than expected.

Creative destruction is sweeping through urban centers

The dirty secret of automation is that it is easier to develop a robot to replace a junior lawyer than a skilled electrician. This fact also helps explain why economists and politicians are so troubled by "creative destruction" that, not so long ago, they thought it would do more good than harm to society. Innovation can constantly innovate the economic structure from the inside, that is, constantly break the old order and structure, while constantly creating new structures, and then bring economic growth, this process is called "creative destruction"). They argue that technology and automation have increased productivity and created more jobs.

But in the age of automated algorithms, they are not so confident. And that's no surprise:

Instead of sweeping factories and farms, creative destruction has swept into urban centers, snatching away white-collar jobs. White-collar workers have been arguing about the "end of work" for years, but there is no doubt that the future many feared has come true.

Automation: The surface novelty of the deep revolution

Much of the media attention is focused on the gradual replacement of manual labor - real robots doing things in front of people, far more intuitive than the invisible service "robots" on cloud platforms. But to focus on a humanoid robot flipping through hamburger meat in a fast-food restaurant is to confuse things. The real revolution took place elsewhere.

Moreover, automation does not explain the decline in heavy industry jobs: manufacturing investment in information technology has been very low over the past decade. And productivity, the key metric of automation and the ultimate goal, has not seen a significant increase. Manufacturers are actually under-investing in technology.

But Silicon Valley has been creating revolutionary software for shopping malls, Hollywood, hotels, distribution, newspapers, television, finance, and education. There are algorithms on the market that teach elementary school math better than humans with bachelor's degrees in education. A large number of documents currently reviewed by bureaucrats and regulators are also increasingly being processed by algorithms.

White-collar professionals who make a living in this huge service market will be horrified to find that they have nowhere else to go in the workplace.

Industrial penetration of automation is on the rise

Look even further ahead, and automation is disrupting the industrial structure far more than that: 90 per cent of the nearly 200 "unicorns" - venture-capital hungry startups like Uber valued at more than $1bn - are in the services sector.

It is not without reason that there is such a clear "preference" in terms of industry. Software on supercomputers can perform previously unimaginable information-processing tasks, from interpreting X-rays to managing passive funds, on cloud platforms at low cost. But when engineering and hardware integration are involved, the challenges are amplified and the complexity multiplies. A trivial failure in the video software may cause no more than a playback jam, but in the machine's operating system, it will cause unexpected serious consequences.

The concept of driverless vehicles is hype, and there is still a lot of work to be done in terms of implementing viable sensors, brakes, powertrains, and ensuring safety and security. As a Goldman Sachs report points out, the car industry is still one of the few manufacturing industries that is less than deeply automated; In other industries, the progress of automation is less than 20% to 30%.

There will always be a cyber revolution in the "means of production." Now, what is undergoing radical change is what we might call "managing data." If history is any guide, the effects of the change - economic growth has been greatly improved, more jobs have been created - but this time the social pain in the process is bound to be felt at the white-collar and corporate management levels. Blue-collar workers who lost their jobs in the wave of the information age took to the streets to protest and shout loudly; This time, faced with the wave of automation, it is the turn of professional white-collar workers to howl.