What will the machines eat?

As a service designer, I'm often asked to develop new service models. The new service models have to provide more value to the end user. They do this by automating tasks currently performed by humans. Machines compute fast, have no "human" flaws and most importantly, cost less. Consequently, I've started asking where do the people go that have been replaced by machines? 

Recently a book was published by Jaron Lanier called "Who owns the future?" which directly addressed the same problem: the middle class is becoming obsolete because of automation. It stated that "at the height of its power, the photography company Kodak employed more than 140 thousand people and was worth $28 billion. Kodak even invented the first digital camera. Today Kodak is bankrupt and the face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear to? And what happened to the wealth that all those middle-class jobs created?"

Step back and think. Once the only way to get something done faster was by force: someone ordered someone else to perform a task. By introducing tools the work became more efficient and that brought an additional element into the mix. Ownership. Wealth allowed owners to acquire better tools and the efficiency this enabled started to accumulate. More efficient technologies increased the difference between the cost of production and making things by hand. Yes, we still value so called hand-made goods, but these are often not necessities but luxury items. But what happened to the people who lost jobs because of the machines?

Today's machine is the computer. At first a cumbersome computational machine, the computer is now omnipresent. Faster and more accurate than people, they already operate most tools. We no longer use the tools directly, but instead give orders to computers that use the tools instead. Production lines are fed with 3D models and coded messages and no one is physically touching anything anymore. As a result we need even more money and even less people to make anything. Automated plants outperform workshops and products have become even cheaper.

Once making things required people. Until machines made things better. Then came the rise of services, where humans were considered an asset until they were replaced by computers. But everything that is made and all the services provided are still there for people, who pay for them. With what if they've got no money because their job was replaced by a computer?

Jobs that require people are dissapearing at a time when the planet's population is expanding. Technological innovation is accelerating. While prices are falling the amount of goods and services are growing and limited natural resources, especially for technology products, is creating opposite forces driving prices up again. Environmental impact considerations are also driving prices up while the financial crisis is still destroying jobs and opportunity in numerous countries around the world. 

In this context, it seems that in order to maintain social harmony, we need to create a new social contract that seeks not greater efficiency, but rather greater value for society at large. In Dancing with Robots, Frank Levy and Richard Murnane, from MIT and Harvard respectively, make a compelling case that the hollowing out of middle class jobs…has as much to do with the technology revolution and computerization of tasks as with global pressures like China…The collapse of the once substantial middle class job picture has begun a robust debate among those who argue that it has its roots in policy versus those who argue that it has its roots in structural changes in the economy.

The authors make a strong case that in the future "the human labor market will center on three kinds of work: solving unstructured problems, working with new information and carrying out non-routine manual tasks. The bulk of the rest of the work will be done by computers." In order to make this transition for people, business and government must start planning not only for greater efficiency, but also to create jobs that computers cannot do.

While it is clear that machines don't eat, it isn't clear at all what people will eat if they are replaced by machines that do what people did before.