Dean Barber

Archive for September, 2015|Monthly archive page

From Tools to Teammates

In Corporate Site Selection and Economic Development on September 13, 2015 at 5:49 pm

I periodically remind readers of this blog that we are in the early stage of a new digital machine age that will make many people doing many of the jobs today unnecessary in the future.

Still, I am an optimist, believing that the disruptions caused by advancing technology will, in the long run, create opportunities – new jobs and entire new industries that we cannot even imagine now.

I think economic development organizations should strive to recognize and seize on futuristic trends and opportunities when they become apparent, no easy task to be sure.

Twenty years ago, there wasn’t much of a cybersecurity industry to speak of. Today, there is a sizeable cluster of companies in and around Washington, D.C., and for good reason.

It’s an industry grown out of advances in technology and necessity — we have a bunch of digital bandits out there bent on stealing data. The damage from hacks costs businesses $400 billion a year, according to British insurance company Lloyd’s.

And an entire industry has been born as a result.

The Robots Are Coming

On another digital front, which will no doubt have huge implications on the work place, robot installations are estimated to increase an average of 12 percent per year from 2015 to 2017, according to the International Federation of Robotics.

Global competition requires modernization of production facilities, and in industrial settings, we are seeing robots improve the quality and efficiency of work by taking over repetitious jobs, some of which that are not practical or even safe for people to perform.

I think most of us probably get that, even if we know that likely creates job loss in certain instances.

But now we starting to see robotics and automation manufacturers reaching out to companies in the service sector as potential new markets in coming years. I think the writing on the wall is that a lot more people (and jobs) will be at risk, simply because of the economics.

An Old Story with a New Twist

This man/machine relationship story is not a new one. It dates back at least to the Industrial Revolution. Certainly there are social dimensions as to how machines and people work together to achieve breakthrough productivity and innovation.

And it is a never ending story that will continue to play out in front of us particularly in an age in which “thinking machines”—from autonomous robots that can quickly learn new tasks on the manufacturing floor to software that can evaluate job applicants or recommend a corporate strategy—are coming to the workplace.

As these machines evolve from tools to teammates, accepting them will be more than a matter of simply adopting new technology. This is a matter of trust.

Algorithm Avoidance

The fact is that people prefer, that is trust, human judgment—their own or someone else’s—to that of artificial intelligence. And multiple studies confirm this phenomenon called “algorithm avoidance.”

But as we slowly come around and place more trust in the thinking machines, certain people, those warm bodies supplanted by technology, will accordingly lose out.

The best defense for people to be needed, indeed to be relevant,  will be having the knowledge and skills needed in future, not always be easy to predict. Having a math/computer/science background will be the best hedge but no guarantee.

The Big Challenge Facing Us

I have to think this is one of the challenges of the future facing educators, economic developers, companies and, yes,even government – keeping people needed, keeping people relevant – in a new machine age.

Unless we find as many tasks to give humans as we find to take away from them, we going to have trouble. This is one of a number of subjects that I speak about to groups looking for a speaker who will keep an audience awake and thinking.

I believe there is an implicit social compact between companies and the communities that they invest in. This is what we do. This is what you do. Now, let us work together for mutual benefit, the essence of business retention and expansion.

A Social Compact Strained

But with advancing technology, that social compact is strained, because the number of jobs newly created by an expansion project are but a fraction of what they used to be, while value of the capital investment continues to climb. In short, not as many people are needed.

Economic developers, and certainly the boards that they report to, are going to have to understand that. Sometimes, I wonder if they do.

Automotive Developments

And as anyone who keeps abreast of this blog knows, I like to keep track of what is happening with the automotive industry because it touches so many communities in this country in some form or fashion.

Auto manufacturers, suppliers, and dealers employ over 1.5 million people and directly contribute to the creation of another 5.7 million jobs.

In total, the auto industry supports 7.25 million private sector jobs, almost $500 billion in annual compensation, and nearly $65 billion in personal tax revenues.

The Holy Grail?

One of the things that caught my eye, possibly a harbinger to the future, was that Toyota, the world’s biggest carmaker, will soon begin production of a four-door sedan powered by hydrogen and emitting nothing but water vapor from its tailpipe.

Production of the Mirai, which means “future” in Japanese, is scheduled to expand to 2,000 units in 2016 and 3,000 units in 2017.

The Mirai can travel about 400 miles without refueling, three times further than most electric cars, and its tank can be filled in a few minutes like gasoline engine vehicles.

Could this be the Holy Grail for green car technology? If I was Tesla, I would be watching this very closely.

More Means More

I also read where Japan now has more electric vehicle charging spots than gas stations. (Ok, Tesla, you can start breathing easy again.)

The country’s number-two automaker Nissan says there are now 40,000 charging units — including those inside private homes — across the nation, compared with 34,000 gas stations.

Still, it should be noted that gas stations have multiple pumps and can service many more cars. But the numbers clearly show Japan is boosting its green-vehicle infrastructure in a big way.

UAW Making Noise in Alabama

And speaking about Japanese automakers, Honda appears to be facing a unionizing effort at its plant near Lincoln, Ala., by the United Auto Workers.

The plant produces the Honda Odyssey minivan, Pilot SUV and Acura MDX Suv, and is scheduled to start producing the Honda Ridgeline pickup.

About this time last year, we were hearing rumblings of the UAW near Tuscaloosa, Ala., where Mercedes-Benz produces the C-Class, GL-SUV, GLE-SUV, and GLE Coupe automobile models.

You never say never, but I would have my doubts if the UAW will get its way at either plant. Unlike the VW plant in Chattanooga, where German management gave tacit support for an organized workforce, neither Honda nor Mercedes are unfurling the welcome banner.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm.  If you liked what you read here, invite him to speak at your next meeting. Dean can be reached at dbarber@barberadvisors.com or at 972-767-9518.

OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234.

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A Workers’ Story

In Corporate Site Selection and Economic Development on September 6, 2015 at 10:02 am

For six weeks in July and August of last year, employees of a multi-billion dollar supermarket chain protested to save the job of their CEO. A year later, things are going well for Market Basket. Happy Labor Day everyone.

Barberbiz

This is a pretty crazy story, one that I may not fully grasp. But it’s still important for us to try. My hunch is that there are some lessons to be learned here.

Appropriately, it happened or concluded nearly on the eve of Labor Day, in which we celebrate the American working man and woman.

Make no mistake about it, this is a workers’ story, one that is “unprecedented in modern U.S. labor history,” according to Thomas Kochan, professor of management at MIT’s Sloan School of Management.

Christopher Mackin at Rutgers School of Management and Labor Relations echoed that sentiment saying, “This is unheard of in corporate America.”

The Summer of Market Basket

So there you go, this is an odd story but maybe not so much when you reflect more upon it. For the “Summer of Market Basket” was not a labor strike in the traditional sense.

That’s because…

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