'Wealth without workers' is the title of a special report from the Economist which looks at how "vast wealth is being created without many workers and for all but an elite few, work no longer guarantees a rising income".
They identify three main reasons.
i) The rise of machine intelligence means more workers will see their jobs threatened. The effects will be felt further up the skill ladder. Wealth creation in the digital era has so far generated little employment.
ii) Entrepreneurs can turn their ideas into firms with huge valuations and hardly any staff. For example Oculus VR, a maker of virtual-reality headsets with 75 employees, was bought by Facebook earlier this year for $2 billion.
iii) Shifts are now evident in emerging economies. Foxconn, long the symbol of China's manufacturing economy, at one point employed 1.5m workers to assemble electronics for Western markets. Now, as the costs of labour rise and those of automated manufacturing fall, Foxconn is swapping workers for robots.
In shore based shipping we are already seeing changes. In many shipowning organisations technical and operations departments are restructuring so they can outsource some of the regulatory burden to administrative centres (or 3rd party companies) that can streamline processes (aided by technology). Operations, finance and accountancy could perhaps see some significant changes over the years.
On the transactional side of the industry it is already quite transparent in terms of market information – vessels for sales, fixtures etc. Any broker or charterer with a good set of skills can find that information relatively easily using current technology. Technology can’t help to find those “off market” candidates in S&P or rumours of fixtures about to be made or significantly help to identify geo political events unfolding. Therefore perhaps brokers and traders are more protected although those that embrace technology will always have an edge. In the same way sales staff can make use of widely available information but their success is more linked to their interpersonal skills.
Perhaps technology will have more of an impact on ships' crews (with the advent of remotely operated vessels) or yard workers (should robotic technology take off significantly in shipbuilding). It could also significantly change the design, manufacturing and distribution of shipping technology.
Time will tell.
Thanks for reading.
This blog was written by Spinnaker's Commercial Division Manager Eric Branson.
