Robots Are Demographics Part 2

The Rise of the Robots

As the working population shrinks first in developed countries and then in global terms (and thus in ordinary circumstances would drive up unit labour costs), the answer for industry is to replace the missing humans with robots. Developed nations are highly incentivised to do this first.

This is a process that is already underway; we are just hitting the exponential J-Curve...

Asia, with its older population and large manufacturing base is leading the rise of the robots...

In South Korea, 10% of the entire workforce are robots... and all the older-population countries are seeing a huge rise in robots...

The electronics industry is seeing the largest number of robots, but healthcare, cars and machinery are seeing a large growth in robots too...

The rise of technology is a relentless deflationary force. The cost of industrial robots has collapsed 85% since 2005! At $10,000 they are much, much cheaper than humans per unit of productivity...

And the application of another Exponential Age technology, AI, is feeding that process, making robots smarter as well as cheaper...

... and investment money continues to pour into AI because AI drives efficiencies by getting rid of humans, driving up corporate profits!

But this hides even more shocking revelations...

Amazon is the second-largest employer in the US with 1.5m employees. Since 2018 the number of people Amazon employs has doubled...

... but something even bigger is going on at Amazon. It is leading the way in robotics with its fully autonomous warehouse robot...

But Amazon is also working to automate the delivery process via self-driving vans, along with drones. They are trying to replace humans at every stage of their business.

Amazon currently “employs” 520,000 robotic drive units across fulfilment and sort centres. That is 30% of its “workforce”. However, as robots work 24/7/365 and don’t have holidays or sick days, then these 520,000 robots probably account for the equivalent of 1,500,000 extra workers!

These 1,500,000 robot jobs offsets 50% of the entire number of retirees in the US in 2021.

This is not just a story of Amazon. Walmart, the largest employer in the US is rolling out fully automated distribution centres using a combination of AI and robotics in its partnership with Symbotic.

This is what Walmart’s new distributions centre look like... no people...

In Symbotic’s words:

“The expanded partnership with Walmart substantiates how our technology is truly reinventing the traditional warehouse and distribution of consumer goods across the supply chain,” stated Rick Cohen, chairman, president and chief product officer at Symbotic. “As a technology platform with deep roots in warehousing and distribution, our system addresses some of the biggest challenges of today’s complex supply chain, such as inventory agility, transportation cost and labor availability. Modernizing the warehouse allows consumers to get what they need faster and creates benefits for everyone including workers, customers and their local communities.”

This translates to, “We will use less workers and make lots of money”.

If Walmart uses as many robots as Amazon and they both continue to grow automation at the same pace, then that offsets the entire wave of retirement in the US...

But if it were only Walmart and Amazon! Another great example is McDonalds. McDonalds has been using automation since 2014. The result is astonishing... a 62% decrease in staff per restaurant in ten years...

This is happening along the entire fast-food chain too, from pizzas to burgers, from Chick-fil-A to KFC. The fast-food industry employs 5m people in the US alone, more than Amazon and Walmart combined. Covid accelerated this trend to automation in food as it did in many industries... including food production and farming...

But the robots are coming for jobs higher up the human value chain too. Healthcare is changing dramatically as robots and AI are implemented everywhere from surgery to process automation...

Journalists and copywriters will soon be losing job opportunities to GPT-3, graphic designers will get replaced by DALL-E. We are seeing lawyers, accountants, developers, scientists, teachers, truck drivers, air traffic controllers, pilots, bankers, miners, etc., all seeing their working lives “enhanced” by technology, which the first step to entirely replacing humans at all skill levels.

The pace at which AI is improving is truly ludicrously exponential... an 8000x increase in parameter size in four fucking years!

And it’s only getting cheaper... 99.9% cheaper in twenty years!

Joining the dots...

If you haven’t yet joined the dots as to where this is all going, let me help you...

The rise of AI and robots are now “demographic units” that replace the waning global population over time. This continues to keep wage growth at near zero in real terms and most likely negative.

Robots are demographics now. The structure of the global “working population” is changing as robots begin to capture a larger and larger share of the job markets.

The rise of the robots will help increase GDP, which offsets demand destruction by a smaller population in developed countries, but global demand will be furthered buffered by the Indian subcontinent, the Middle East and Nigeria.

Robots have economic demands too which increase consumption – not for consumer goods but the technology of code, chips, processors, electricity, materials, etc., and they will also drive robot-to-robot GDP. The rise of the metaverse also accelerates this as AI will operate with autonomy in a digital economy, entirely free of humans.

We are already seeing this is Japan where the youth now “date” AI in the metaverse...

We have also seen this trend in financial markets where the largest share of volume is now driven by AI and models and that results in a machine-to-machine economy.

The adoption of robots and AI is accelerating, and it is RELENTLESS, and it is INEVITABLE.

Very soon robots and AI will go from buffering the loss of population as “human replacement units” to the majority of all work done on earth.

Human robots

Ok, this is getting scary but that doesn’t begin to express what I think Elon is nervous about (or I am nervous about) ...

This is what terrifies me... a $10,000 humanoid robot...

A robot with human dexterity, combined with the exponential rise of AI and computing power, along with increasingly cheaper electricity, is going to create an even bigger problem.

If humans are not required in the workforce, they will procreate even less. The increase of mass medicines over the last sixty years and cheap food, both driven by technology, effected a collapse in population growth. The rise of robots and AI will accelerate this. Humanoid robots only do one thing – replace humans in even more use cases to the point where humans are entirely unnecessary.

And if there is a bot-to-bot economy (the internet of things is part of this) then what value do humans have if we don’t drive production or consumption?

The rise of things like DAOs essentially mean we can have AI companies, with no employees, serving other AI or robots in an ever-accelerating cycle.

Human focus will turn to longevity of life to maintain population, but they will have to find new productive means to have purpose. Sure, we can and will have universal basic income or some form of network participation to share the wealth using blockchain technology, but the reality is that humans are going to have to adapt.

What I mean by this is we either merge with technology like The Terminator and become what Noah Harari calls “Homo Deus” ...

... or enhance ourselves to be as productive as robots like Iron Man...

If we don’t take the path to Homo Deus, then the rise of the machines means that the robots and AI become our overlords and the human population dies out.

In this case, the robots ARE the future of global population, not humans.

These are the only two outcomes – a Singularity where we enhance ourselves by merging with technology to compete with the relentless rise of technology, or we go the way of the dinosaur and the Singularity is won by the new species, the robot.

Who knows how this plays out, but it is written. Nothing can or will stop this.

Yes, it is terrifying, and it is happening in front of our eyes. The less people are around on earth, the faster this drives the robots, the less people there will be in the future.

Within twenty years robots/AI will outnumber humans in both number and total productivity, maybe sooner.

It is my view that the next fifty years is likely to be a new “golden age” where all the applied technologies improve our lives, increase our longevity and our wellbeing, along with productivity, and along with accelerated GDP growth, finally getting us out of the quagmire of the last twenty-two years.

After the next fifty years (or maybe sooner), we will realise that the golden age was the beginning of our demise.

For us, all we can do is invest in it. If we embrace it, then we get to capture the change financially.

This is the chart of the Robotics Index. Up only. My guess is that this accelerates, creating an even steeper channel in due course...

The problem is that by investing in it, we accelerate it.

Catch 22.