Metaskills- Five Talents for the Robotic Age Read online

  Inventor and author Ray Kurzweil calls this phenomenon the Law of Accelerating Returns, which he defines as the speed-up in the rate of evolution, with technical evolution picking up the slack for much slower biological evolution. He notes, as one example, that the resolution and bandwidth of brain scanning have been doubling in accordance with Moore’s Law. He predicts that in a couple of decades we’ll be able to reverse-engineer the brain and apply its principles to machines, and maybe even use machines to alter the brain.

  Meanwhile, the human brain is evolving on its own. By studying mutations in our DNA, researchers have concluded that our genes are evolving considerably faster than they were in preagricultural times. Yet the rate of technological evolution is a billion billion times as fast as the evolution of DNA.

  Kelly sees human evolution as a play in four acts. The first was the invention of language about fifty thousand years ago, which shifted the burden of evolution away from a total dependence on genetic inheritance. The second was the invention of writing about ten thousand years ago, which allowed ideas to travel across time and territory. The third was the development of science, which is a metainvention—an invention that spawns more invention. Now, he says, evolution has evolved a fourth manner of evolution. “We are reaching deep within ourselves to adjust the master knob. We are messing with our source code, including the code that grows our brains and makes our minds.” With advances in gene splicing, genetic engineering, and gene therapy, “we are ending a four-billion-year-old hegemony of Darwinian evolution.”

  Kurzweil believes that the future will be far more surprising than most of us realize, because we haven’t internalized the fact that the rate of change itself is accelerating. He says: “There will be no distinction, post-Singularity, between human and machine and between physical and virtual reality. If you wonder what will remain unequivocally human in such a world, it’s simply this quality: ours is the species that inherently seeks to extend its physical and mental reach beyond current limitations.”

  Is this really our future? Not neccessarily, says Joel Garreau. He lays out three possible scenarios, each with its own poster child. The first is the heaven scenario, in which we become godlike through the continuing evolution and collaboration of man and machine. The poster child for this scenario is Kurzweil. The hell scenario predicts that the growing power of technology might be used by miscreants (humans, no doubt) to extinguish or at least harm life on Earth. The proponent of this scenario is venture capitalist Bill Joy, cofounder of Sun Microsystems. Finally, the prevail scenario says that humanity is not a slave to growth curves, and somehow we’ll muddle through. The poster child for this scenario is virtual reality pioneer Jaron Lanier, author of You Are Not a Gadget.

  There’s something reassuringly human in Lanier’s view of the future. It suggests that we shouldn’t (and probably won’t) drive recklessly at ever-accelerating speeds; that we shouldn’t (and probably won’t) drive at ten miles an hour with the brakes on; and that we shouldn’t (but probably will) drive slightly faster than the speed limit, gripping the wheel nervously as we glance at the accident on the side of the road. It suggests that there are limits to exponential growth that we simply have yet to encounter. We can only hope they’re not the catastrophic kind.

  In the meantime, we have every right to marvel at our evolutionary progress. Michael Eisner, the former head of Disney, observed that we’ve come a long way “from paintings on cavemen’s walls to the ability to digitally beam movies, television, news, information, and music into every cave in the world.” That ability—the skillful application of art and science—is what we call talent.

  The innovation mandate

  Economic gloom. Dwindling resources. Growing pollution. Failing schools. Why do we have so many huge, hairy problems? Are these the natural by-products of exponential change? Will the weight of our problems grow larger as the world becomes more complex? Maybe, but here’s another way to look at it: The weight seems too large because the lever is too small.

  The tools and skills we’ve developed for the last era are inadequate to address the challenges of the next era. We find ourselves caught in the middle between two incompatible paradigms: The old industrial platform is collapsing, but we can’t quite make out the new platform. We’re not sure which way to jump.

  As a descriptor, the “Information Age” doesn’t really capture the spirit of where we’re headed. While an explosion of information is certainly a key driver of change today, we could also say that petroleum was a key driver in the Industrial Age. Yet we didn’t call it the Oil Age; we called it the Industrial Age. Our shared vision of machinery, factories, and magnificent mass production was both palpable and inclusive. It fired our collective imagination.

  Today, gushing flows of information are not only fueling vast networks of knowledge, they’re allowing us to tinker with the very building blocks of life, exposing biology to advances in machinery, and machinery to advances in biology. We’re entering a period of increasing human-machine collaboration, made possible by information, but also transcending it.

  We’re entering what I’ll call the Robotic Age.

  This chaotic shift from one platform to the next is likely to create massive amounts of both obsolescence and opportunity for years to come. As business strategists can tell you, threats can also be framed as opportunities. The dying city core can be transformed into a vibrant Old Town. The rising cost of oil can pave the way for alternative fuels. The increase in Alzheimer’s can focus the search for profitable new drugs.

  At the same time, opportunities, if not addressed, can turn into threats. The company that ignores the struggling startup with a different idea can suddenly find its customers deserting in droves. The government that denies the wishes of its people can find that public opinion has galvanized against it. Clearly, the window of opportunity operates both ways—it can open up to the fresh air or slam down on our fingers.

  Innovation is the discipline that decides which it will be. In a time of rapid change, success favors those who can make big leaps of imagination, courage, and effort. With innovation, people and institutions have the means to escape a dying past and make it safely to the other side. Without it, they can lose their momentum, abandon their uniqueness, and wander off course as they drift back to the status quo. Innovation is the antidote to entropy: If we stop breathing we’ll die.

  In the Robotic Age, the drumbeat of innovation will only grow louder. The urge to march will be felt from top to bottom—from the societal level to the company level to the individual level. But it’s mostly at the company level that the future will be forged, because business has the motive and the means to drive large-scale change.

  Whenever a paradigm shifts, three kinds of people emerge: 1) those who resist change because they’ve been so successful with the previous paradigm; 2) those who embrace change because they haven’t been successful with the previous paradigm; and 3) those who embrace change despite their success with the previous paradigm. This third group is the serial innovators, the entrepreneurs, the iconoclasts who embody the principle of creative destruction.

  Creative destruction was a term popularized by economist Joseph Schumpeter in the 1940s. It refers to a process of radical innovation in which new business models destroy old ones by changing the entire basis for their success. This applies to products, services, processes, and technologies. For example, the telephone destroyed the telegraph, the automobile destroyed the horse-drawn carriage, and the smartphone destroyed the cell phone. In an age of rapid change, markets tend to change faster than any one company, since markets have nothing to lose by changing. Only companies who get good at creation and destruction can consistently turn discontinuity to their advantage.

  The payoff for radical innovation can be huge. During a period when cell phone maker Nokia earned $1.1 billion on a 35% market share, smartphone maker Apple earned $1.6 billion on a 2.5% market share. Within 13 years under Steve Jobs, Apple surpassed Microsoft to become th
e most valuable technology company in the world, giving its shareholders a 100-times return on their investment during that period.

  When people hear the word innovation, they usually think of technology-based products—the iPad, the Prius, the Wii, Tesla, and others. But this only is the tip of the iceberg. The Doblin Group, a think tank in Chicago, has identified ten areas where innovation can deliver an advantage to companies:

  1. The business model, or how the enterprise makes money.

  2. Networking, including organizational structure, the value chain, and partnerships.

  3. Enabling processes, or the capabilities the company buys from others.

  4. Core processes, or the proprietary methods that add value.

  5. Product performance, including features and functionality.

  6. Product systems, meaning the extended system that supports the product.

  7. Service, or how the company treats customers.

  8. Channels, or how the company connects its offerings to its customers.

  9. Branding, or how the company builds its reputation.

  10. Customer experience, including the touchpoints where customers encounter the brand.

  In each of these areas, innovation can be employed as a booster rocket to leave competitors in the dust. Business leaders are beginning to see, sometimes through the dust of market changers, the wealth-generating power of originality. They’re learning what Rudyard Kipling knew a century earlier:

  They copied all they could follow,

  but they couldn’t copy my mind.

  So I left ’em sweating and stealing,

  a year and a half behind.

  Almost everything can be copied these days, given enough time and motivation. The only thing that can’t be copied is originality. By definition, the original stands alone. Every category has leaders and followers, and thanks to greater transparency and the growing power of social media, customers are rewarding the former and devaluing the latter. The same principle now applies to nonprofits, educational institutions, and even cities, countries, and governments. Change is in the air.

  Where are the jobs?

  A persistent topic in political circles is the “trickle-down theory” of job creation. It goes like this: If we make the right people rich enough, they’ll give us jobs. Conversely, if we fail to make them rich, they’ll lose interest in building big companies, and jobs will disappear.

  Trickle-down economics was a popular theme of the Reagan administration during the 1970s. But because the “optics” of jobs and other benefits merely trickling down to the masses was less than inspiring, the administration retitled the idea supply-side economics. Reagonomics, as it came to be known, was similar to the horse-and-sparrow theory, a concept from the 1890s. If you fed a horse enough oats, it went, some would surely pass through to the road for the sparrows.

  Concepts like these have considerable appeal at the top of the food chain, as you might imagine. But the feudal system of the Middle Ages was abandoned for a reason—it didn’t work for the serfs. This made it difficult for feudal lords to hold onto their power, and over time the system was replaced with democracy. Yet the feudal system is always lurking in the wings, ready to sweep back onto history’s stage. It happened again in the United States during the late 1970s when the government deregulated Wall Street and at the same time insured it against significant losses. In doing so, says economist Robert Reich, “It allowed finance—which until then had been the servant of American industry, to become its master, demanding short-term profits over long-term growth.”

  By 2007 financial companies accounted for over 40 percent of corporate profits and nearly as much of corporate pay, up from 10 percent during the Great Prosperity between 1947 and 1997. During periods like this, when the rich took home a smaller percentage of total income, the economy grew faster and median wages soared. “We created a virtuous circle in which an ever-growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand.”

  Today we have the flip side. The rich are getting richer while the poor are getting poorer. To be more precise, members of the middle class are being squeezed downward into the ranks of the poor, creating what Citigroup calls the “consumer hourglass effect,” in which there are only two worthwhile markets left, the highest income and the lowest income. The middle-income market is now stagnant. Procter & Gamble has noticed the same phenomenon. “It required us to think differently about our product portfolio and how to please the high-end and lower-end markets,” says group president Melanie Healey. “That’s frankly where a lot of the growth is happening.”

  Now the top one percent of Americans takes home 25 percent of total income. In terms of wealth, the top one percent controls 40 percent of the total. Meanwhile, executive compensation is rising beyond prerecession levels with no end in sight. Surely, if the benefits were going to trickle, they would have trickled by now. So where are the jobs?

  The nearly universal opinion of economists is that the engine for job creation is growth. If we grow the economy, they say, we can put everyone to back to work. Yet in the last 20 years this has not been strictly true; a lot of growth in developed countries has come from information-based businesses, which have created enormous shareholder wealth, but relatively few jobs. In 2011, software giant SAP reported revenues of $16 billion, but only 53,000 employees. Google is now a $29 billion company, but only employs 29,000 people. Facebook has revenues of $4 billion with only 2,000 people.

  If you look at where banks, hedge funds, and venture capitalists are investing most heavily, it’s in software companies and financial instruments where the returns are the quickest and most sizable. Even our manufacturing companies are becoming information companies, keeping the design and marketing here, sending the manufacturing where labor is cheapest. As manufacturing jobs have moved overseas, the middle class has had nowhere to go but down, while the “ruling” class—those at the top who control the business models, strategies, and policies—have enjoyed a greater and greater share of the pie.

  The pie-eating contest is almost over. Starving the middle class to feed the upper class hasn’t been good for anyone. Instead, it’s led to the Great Recession—an economic cul-de-sac in which the middle and the bottom no longer have the financial means to support the top. Any marketing strategy that targets the top and the bottom of the hourglass and ignores the middle is not a solution but an act of desperation.

  According to Reich’s figures, the average hourly pay of Americans has risen only 6 percent, adjusted for inflation, since 1985. Contrast this with the Germans, whose average pay has risen nearly 30 percent. At the same time, the top one percent of German households takes home 11 percent of total income, while the top one percent of American households takes 25 percent of the pie. Germany has managed to avoid the hourglass effect by supporting manufacturing and education.

  But do we really want to bring back the bad old days—the dirty factories, the punch clocks, the mind-numbing repetitive work? Of course not. What we want is a new kind of industry that encourages the growth of talent. We want jobs that demand our best ideas, that respect our unique skills, that engage our minds as well as our muscles. Rather than bring creative work down to the level of factory work, we need to bring factory work up to the level of creative work.

  The Robot Curve

  Over time, there’s consistent downward pressure on the value and cost of work. The job market is more than willing to shell out good money for original thinking and unique skills. But because business is competitive, creative processes tend to become routinized, moving step by step from original work down to skilled work, from skilled work down to rote work, and from rote work down to robotic work. At each step along the way, the value and the price decrease, with the value staying higher than the price.

  Let’s call this the Robot Curve.

  At the top of the Robot Curve is creative work, where there’s less routine and a lot of expe
rimentation. Since this work is fairly original, maybe even unique, the cost is high and so is the value, as long as the work addresses a significant need. Creative work might include scientific discoveries, technological breakthroughs, new business ideas, product invention, organizational leadership, and all manner of creativity in the arts and entertainment fields. How much should Oprah be paid? Who knows? But if you want Oprah, there’s little choice but to pay her fees.

  One step down is skilled work, which includes the work of professionals. The techniques used by skilled workers and professionals were once original, but have now become best practices. There’s still an element of creativity, but much of the expertise is shared by other professionals in the same discipline. This shared knowledge offers clients and employers a degree of interchangeability in the people they hire, albeit on a sliding scale of talent. I may not know which heart surgeon is the best, but I can at least be confident that my own doctor has a modicum of training and experience.

  As skilled work becomes more standardized, or as technology can transform it, it turns into rote work and can be outsourced to lower cost producers. Writing a decision-tree script for a phone operator requires the creativity and experience of a skilled worker. But it standardizes the work so employees don’t need the same high level of experience or education. The cost goes down, the value stays higher than the cost, and the work can be scaled up. The outsourcing mills of Bangalore are examples of rote work in action.

  When rote work can be done more cheaply or more consistently with machines, it quickly becomes automated. That same decision tree designed for a phone operator may lend itself to a software application with voice simulation. The welding operation that was once done by a human worker can now be done even better by a robotic arm. The professional photograph that once would have cost $4,000 and two days’ time can now be rented instantly online for $25. While automation puts people out of work, it also opens up new opportunities at the top of the curve for the originators and professionals who invent and manage these systems.