Value of technology is unlocked incrementally so we will adapt and work with machines and automation

James Bessen wrote Learning by doing. Bessen returns to Marx’s 19th-century weavers to prove that as humans work with new technologies over the long term, they improve them and boost their own fortunes in the process. So, yes, when the power loom was invented, in 1785, it shifted weaving from farms to factories, instantly increasing productivity yet leaving workers’ wages flat for decades, as Marx noted. But he failed to predict what happened next: From 1860 to 1890, weavers’ pay more than doubled.

The value of any technology is unlocked incrementally, Bessen argues, perhaps over a generation, through on-the-job learning. Weavers working with early power looms produced two and a half times as much cloth per hour as their predecessors who used handlooms; 80 years later, they produced 50 times as much. It’s therefore the adopters and adapters of a technology—not its inventors—who create much of its value.

Faster Adaptation is needed

Wages don’t rise until the skills needed to operate a technology are standardized and able to be easily taught to workers. Once power looms matured and factories became more uniform, weavers could credibly threaten to take their skills elsewhere—and command more money as a result. Bessen offers several recommendations to speed up skills training in modern times: increased investment in community colleges, vocational education, and retraining programs for displaced workers, along with company-sponsored training and development programs that help workers learn new skills and gain experience with new technologies.

Reject the obsession with job-eliminating technology in favor of a focus on complementarity. Help workers acquire new skills, and craft an industrial policy that focuses as much on adoption as on creation.

ATMs increased bank teller and banking jobs

Consider the ATM, a classic example, supposedly, of technological progress that has all but eliminated a white-collar job. In fact, Mr. Bessen shows, the number of bank tellers working in the U.S. has risen since the 1970s, when ATMs were introduced. How could that be? The average bank branch used to employ 20 workers. The spread of ATMs reduced the number to about 13, making it cheaper for banks to open branches

Meanwhile, thanks in part to the convenience of the new machines, the number of banking transactions soared, and banks began to compete by promising better customer service: more bank employees, at more branches, handling more complex tasks than tellers in the past.

Online banking is also trying to shift effort to the user with more self service combined with automation.

Medicine has a constant need for new technologies and skills

Another job category that has grown rather than shrunk as a result of technology: licensed practical nurses, or LPNs. Many in the medical profession expected computerized medicine to eliminate LPNs, who were thought to lack the skills needed to run new, sophisticated machines. Instead, developments like lasers and advanced endoscopy made it possible to perform minimally invasive surgery at short-stay clinics, which have multiplied in the past three decades, creating jobs and raising wages for licensed practical nurses. “The effect of technology on jobs is simply more dynamic and more complicated than many people recognize,” Mr. Bessen writes.

Shadow jobs and the unbundling of products and services and new opportunities for concierge like service packaging

There has been many attempts to shift self service offering. Lowering the prices and costs by having self check at retail or self service at gas stations.

Eventually people either accept and like self service at times (self service buffet restaurants) or there is the opportunity for new entrants to offer higher service.

Professor Leigh Sparks of the University of Stirling’s Institute for Retail Studies says that self-service has long been the price to gain cheaper goods. ‘They pose a question,’ he says. ‘What do you prefer: your money or your time?’ To take an example, it might cost 5p more a litre to have an attendant pump petrol into your car. As retail psychologist Paul Buckley says, ‘People expect low prices and mostly, the sum saved outweighs the service.’

A 2013 Mintel survey showing that 74% of consumers would change brands based on a poor customer experience comes as no surprise to Beverland, who sees a gaping hole in the self-service experience. ‘There’s a ton of research highlighting that humans enhance the consumer-brand connection,’ he says. ‘We know that consumers often connect to brands indirectly through people, particularly in services such as retail.’

Another factor of the self-service ‘revolution’: the ‘time is money’ factor and the opportunity cost. ‘I took a holiday to the Caribbean and rather than spend 10 hours in research, I paid an agent $75 for a holiday costing $3,000,’ says Lambert. ‘I was so happy to delegate it.’ A tranche of micro-concierge start-ups – Magic, Helpa, GoButler, Hipmunk – seem to underscore this growing market.

People will want good and high quality service and service that adds values and can save time and effort

SOURCES – Harvard Business Review, Management Today, Wall Street Journal