It's the age of convenience, that’s for sure. Smartphones and their applications allow us to access just about anything with a quick swipe and a few clicks. I can imagine that 20 years ago, it would have been difficult to grasp the level of convenience we have today.
Uber and Lyft for instance, two competitors that have broken the bank of taxi services. Its crazy to think you can simply request a ride and you can have it at the curb in a matter of minutes. Another would be the rise of Netflix, the TV and movie giant that snapped the profits of Blockbuster & Redbox. People just don’t rent DVD’s anymore… because why would you? In fact, back a number of years ago, Netflix made an offer to acquire Blockbuster, and Netflix got laughed at. Now look who’s laughing. Other than the fact that you can watch unlimited TV on your device for about ten dollars a month, I believe Netflix thrives on convenience and a hatred towards commercials.
Even major retailers are struggling. Amazon is rising to the top as their internet based services are eating the big box retailers lunch. Online shopping, especially throughout the Holiday season, continues to hit sales records every year. Investors in Amazon’s stock remains bullish and are bearish on big box retailers. As more and more consumers turn to the internet to find their products, retailers have been forced to move to the web or suffer the consequences. Amazon adding drones with the potential to deliver your package within a couple hours changes the game. The point being that we've been sucked in by convenience. As we continue to expect things in a very timely manner, will this theme of reliance come back to haunt us?
The simplicity in our lives is great for the moment, but what long term effect will it have on our future lifestyles and economic conditions? Many of the services that we heavily rely on only came to be a couple years ago. That goes to show that the growth has happened at an exponential rate.
For example,
will robots and computers continue to take our jobs in the years to come? Statistics show that productivity growth in American businesses has dropped significantly. When the internet, computers and other forms of technology hit businesses in the 90s to improve operation, productivity escalated. Everything went on the hard drive as opposed to a paper document in a file cabinet. But now it’s 2016, and were still using this technology. Efficiency has been slow to change in many workplaces. The only thing that’s gotten faster is the speed of our devices, and we can’t deny that other countries are hot on our tail in certain industries. Could automated things like robots be the next necessary step for an advancement in American productivity?
You could argue that this has already begun. Wall Street has adopted programs that automatically spot algorithms and do the investing accordingly in milliseconds. You can deposit your check by taking a picture of it, so who needs a bank Teller anymore? I expect to see the food industry giants like McDonalds, Starbucks & Taco Bell invest in technology to assist them in collecting orders. I say this in regards to a high minimum wage across the country and a tight labor market. You can only pay someone so much to take orders before finding a cheaper route to do so. With most company’s ultimate goal of achieving profitability and increased operational efficiency, this transition is inevitable, in my opinion. What could these changes mean? Less jobs, less spending, less economic growth? I sure hope not but it’s definitely a possibility.
Just years ago everyone wanted a flip phone with calling and texting, then the phones got keyboards so everyone wanted one of those, then they made the touch screen and you had to have that. But now you can tell Siri to send a message or even check an email on your wristwatch. Now we must ask, can it really get much better? Is Apple’s transition from the 6S to the 7 telling us something? Is Google’s new phone, a cloned iPhone, a sign that silicon valley’s technology has plateaued? What about the Galaxy Note 7, are engineers rushing to stay ahead of competition? Maybe, maybe not.
Moreover, Elon Musk, CEO of Tesla predicts that one day we will all have some sort of ‘universal income’. What he means is that technology will leave people jobless and will have to be granted some sort of fixed income. Now obviously there are industries that will always require human labor; there are plenty of transitions a company could make to improve its efficiency. Who can build something faster, a human assembly line, or a robot programmed to build it in a matter of minutes? Probably a robot. But consider Henry Ford’s invention of the Model T. The manufacturing process was quite the involved, but it was the assembly line that provided employment opportunities, it stimulated the economy and promoted consumer spending in America. On top of that, it called for fiscal spending on infrastructure, the evolution of automobile manufacturing competitors and great demand for oil. Ford’s invention was one of the new big things that literally helped drive the US to where it is today. Now I ask myself, is there anything like this that could create a boom instead of blow a bubble? What is the new big thing that’s going to give America that boost? It’s necessary to consider that these great technological conveniences could stall. Are we riding the tech wave? Should we expect someone to come up with new ideas just like we expect our Instagram feed to load within 5 seconds?
The point of this review was to examine the problems in terms of slowed productivity growth and how improving technology may actually be detrimental to our economic future. As we adopt more and more of these conveniences as the norm, we must consider the possibility could be disadvantageous. Much like the transition from an agrarian to an industrial economy, we’re now seeing a transition to a brain based economy. So where and when will the next productivity push come? In my opinion, it’s hard to tell.
