May 11th, 2015

The Industry of the Future: Charity

May 11th, 2015

While many people still smirk at the mention of a “robot invasion,” such smug confidence cannot be sustained for much longer. This is not science fiction anymore. Robots are here and they are getting increasingly better at your job.

With the half-century milestone now visible on the horizon, it is an opportune time to prepare for the potential impacts that robots will have on the economy, particularly employment.

Robots will replace human workers in factories at a faster pace over the next decade, pushing Canadian manufacturing labor costs down 24 percent. This trend isn’t stopping at manufacturing either. Almost all the jobs that have disappeared to new technology in the past four years were not in blue-collar jobs but in white-collar careers, such as law, architecture and medicine. Robots like Baxter, the general-purpose robot, can learn what you want it to do— just by watching you do it. There is even a robot chef that can cook 2,000 different meals at the tap of a button. IBM’s Watson, in addition to outsmarting two of Jeopardy’s top players, has now taken on veterinary medicine and spawned the “best legal researcher available.”

The examples of robots impacting jobs, even today, are vast, and it is important to remember that not everyone is going to benefit from such technology. The social implications of the “robot invasion” are worrisome, if not ominous.

There are visionaries such as Silicon Valley entrepreneur, Martin Ford, who is planning for a world of up to 75 percent unemployment while, Moshe Vardi, a computer scientist at Rice University in Houston, is preparing for 50 percent. Deloitte found that one-third of jobs in the United Kingdom were at risk of automation. Oxford researchers declared that 45 percent of America’s occupations will be automated within the next 20 years.

While one can argue that these technological shifts will likely spur new job growth, there is a real possibility that we are entering into a world where structural unemployment is going to be higher, so what can we today to be better prepared for tomorrow?

One possible solution is to invest more in charity.

Many futurists have neglected the economic impact of charity and may be underestimating its potential. The work of charities and the people that work for them can play a critical role in mitigating some of the consequences resulting from the increasing prevalence of robots.

Canada’s charitable and nonprofit sector is the second largest in the world on a per capita basis, representing 8.1% of the GDP and over two million employees. Canada’s charitable revenues total over $220 billion across 86,000 different organizations. The sector is a largely ignored economic powerhouse, contributing more to the economy than mining, oil and gas combined.

So, what can this billion-dollar industry do for society during a “robot invasion?”

One option is for charities to better leverage their expertise on the economy’s most valuable resource, people. For example, we know unemployment can result in isolation and health experts are already sounding the alarm on how it “is becoming an epidemic health threat.” Outside of environmental, animal rights, and the arts— the majority of charities, such as churches, hospitals, universities, and international aid NGOs do focus on people and their wellbeing. Isolation has been linked to early mortality, and governments are already looking to the charitable sector to help mitigate some of its consequences, with the Government of Canada offering up to $750,000 for projects that help alleviate such isolation. In the future, the capacity for charities to bring people together will have to increase to meet these growing demands.

Emergent issues like isolation serve as a growth opportunity for charities, because they also happen to be the centre of expertise on empathy, something people are increasingly willing to pay for, whether through taxes or out of their own pocket. This is an area that will be difficult for robots to permeate (at least to my knowledge, Artificial Intelligence has not yet been able to empathize), and charities would do well to capitalize on this opportunity. The rising popularity of more “connected” industries like the sharing economy or collaborative working hubs are just a few of the early signals pointing toward this growing trend.

Charities could be a solution to the fallout of a “robot invasion,” both through the services they deliver, as well as, the employees they hire. This sector will have an important competitive advantage in our future society, which may be in desperate need of job creation and social supports for the unemployed.

The question is whether charities will seize this opportunity or just continue to smirk at the idea.