The 2-Minute Thought: When the Robots Come, Human Hearts Will Matter

In a recent speech called “The Future of Work,” Bank of England Governor Mark Carney addressed how artificial intelligence, automation, interconnectivity, and other elements of the Fourth Industrial Revolution will change the way we work.

The way we work already has changed enormously. In Carney’s words, economies are being reorganized into “a series of distributed peer-to-peer connections across powerful networks”. “Intangible capital is now more important than physical capital”. . . “We are entering an age when anyone will be able to produce anything anywhere through 3-D printing, where anyone can broadcast their performance globally via YouTube or sell to China whatever the size of their business via Tmall.”

But in some ways, Carney doesn’t see the Fourth Industrial Revolution as so different from the previous three – neither the First Industrial Revolution from the late 18th century (steam engine and urbanization); nor the Second from the late 19th century (electricity, mass production, oil and steel); nor the Third from the late 20th century (electronics, the internet, and info technologies).

All industrial revolutions, Carney says, involve three effects: Destruction, Productivity, and Creation. The Destruction happens when technology replaces labor, and wages and employment stagnate or decline. The Productivity effect is where technology makes those who are in work more productive and boosts their wages while increasing returns to the owners of capital – but also results in job polarization. Some people do well and some do poorly. Creation is what makes things better. That is where new technologies eventually create new tasks and new livelihoods that enable labor to thrive again.

Historically, the effects of Destruction have never been permanent. But it does take time for Creation to kick in and counter the Destruction effect. Carney notes, “The benefits of the First Industrial Revolution, which began in the latter half of the 18th century, were not felt fully in productivity and wages until the second half of the 19th.” That is a long time – and things may play out similarly this time.

But the Fourth Industrial Revolution also will be different from the previous three in this way: In the past, technology largely substituted for routine manual tasks – that is, “human hands,” but not “human heads.” Today, we’re looking at technologies that will reach the realm of “human heads” -- tasks involving reasoning, sensory perception, and cognitive content.

So what will be left for humans to do? Many interesting answers have been offered to this question. But fascinatingly, Carney suggests that the future of work for humans may be to provide “hearts” – “that is, tasks that require emotional intelligence, originality or social skills such as persuasion or caring for others.”

Perhaps even more fascinating is Carney’s suggestion that the new technologies of the Fourth Industrial Revolution could enable “new forms of bespoke mass creativity” and that as a result, we could return to an economy where cottage industries and “human hands” again have great value.

Coming full circle to return to cottage industries? Imagine that.



The 2-Minute Thought: Pursuing Outside Interests

In a 2017 editorial, David Epstein and Malcolm Gladwell noted that most scientists have about the same number of hobbies as the general public, but that scientists inducted into national academies tend to have more – and Nobel Prize winners still more.  Nobel laureates are at least 22 times more likely than others to have serious hobbies unrelated to their work.  

So, could pursuing outside interests be good for your main line of work?

The co-authors here do no more than muse whimsically on this idea as they introduce a research study on the effect of taking medical students from the University of Pennsylvania to the Philadelphia Museum of Art for art training.  Yes, art training – seemingly wholly unrelated to medicine.  And yet, the study found that after six 90-minute sessions on how to look at art, the medical students made noticeable improvements in their observation and diagnosis skills as physicians. 

It’s risky to draw any conclusions here, since the study -- though randomized and controlled -- involved only 36 medical students.   But the study certainly incites reflection.

The idea behind the study was that observation and description are critical skills for doctors, but that doctors seldom get formal training in these areas and that learning to look at art could improve those skills.  That seems believable. 

Beyond that is the idea that doing something very different in a different environment has benefits.  And what fascinates Epstein and Gladwell is the idea that when you have many interests, you build “networks of enterprises” that help you approach difficult problems.  Creativity grows.

The two authors quote neuroscientist Santiago Ramon y Cajal on those with manifold interests outside of work:  “To him who observes them from afar, it appears as though they are scattering and dissipating their energies, while in reality they are challenging and strengthening them.”

Tim Harford, the “undercover economist” at the Financial Times, who first drew my attention to the Philadelphia Art Museum study, also finds it tempting to believe that taking breaks, doing something different, and working on varied projects simultaneously is beneficial.   He brings up David Bowie, who in the build-up to his trilogy of Berlin-based albums, collaborated with John Lennon, starred in the film The Man Who Fell to Earth, drafted his autobiography, and lived in Geneva, Los Angeles, and Philadelphia. 

You may be inclined to write off David Bowie as a one-off wonder, but Harford also cites work by Bernice Eiduson, who found that the most successful scientists work on several problems at once -- and of Mihaly Csikszentmihalyi, who found that slow switching among projects was good for creativity. 

The takeaway is simple: Taking a break from your normal job could be good for you.  Pursuing interests outside of work may actually help your work.

As a final note, remember that the very best investors always have made it a point to read widely across disciplines.  On legendary investor Bill Miller’s summer reading list are titles like, Hiking with Nietzsche: On Becoming Who You Are, The Art of the Wasted Day, and Yuval Noah Harari’s Sapiens: A Brief History of Humankind.   You can see his team’s complete list here (https://millervalue.com/2018-summer-reading/).

Please Note: The 2-Minute Thought is going bi-weekly, so the next edition will be September 20.  Less quantity, hopefully more quality, definitely less email clutter.