Cannibalization of the Value Chain

14

October

2016

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We live in a day and age where technology is all around us and is advancing at a rapid rate. we’ve witnessed technologies being introduced that have complemented and improved the lives of many, but at what cost? We know that disruptive technologies are are those which displace existing established technologies and that shake up the industry as a result. However, this displacement does not only occur in tech, but also in human labor. This phenomena is known as cannibalization in the value chain, where new technologies alleviate the need for certain forms of human labor. This is nothing new, new processes that have proved to be more effective and efficient than workers have been implemented most notably in the industrial revolution. This technological and information revolution that we are currently in, raises the question whether or not certain jobs and industries will continue to function or be destroyed as whole.

Sure, its a fair to point out that technologies also pose the chance of creating new jobs. In regards to for example maintenance of the machinery, programming etc. however it also stands to do a great deal of damage to the sectors which traditionally never used IT. For instance,. Farmers and ranchers used to make up over 50% of the US workforce; today less than 2.5% are employed in this sector, yet more food than ever is being produced in america due to the automation in agriculture and food production. This is a prime example of how traditional jobs are being swallowed up by IT. This does however overlook the fact that more jobs may be created in the process. Referring back to the previous example of the farmers; although this profession may be less and less necessary over the years with the introduction of IT, it becomes more and more vital to have properly trained operators, technicians, etc. ; for this task, which traditionally had limited variation in job functionality and responsibility.

other areas in which we can see a job functions being replaced by IT, are those such as the following:

  • cashier’s being replaced by self-checkout kiosks
  • Bank tellers slowly being replaced by online banking /mobile apps and of course
  • Surgeons, profession that takes years of training and experience, being eventually replaced by Artificial Intelligence.

“It’s one of the dirty secrets of economics: technology progress does grow the economy and create wealth, but there is no economic law that says everyone will benefit.” In other words, in the race against the machine, some are likely to win while many others lose” – David Rotman (MIT). The implications that can be drawn from this is that in order to “survive”  this future (which may very well be sooner than you think), make sure to brush up on your IT skill set.
PS. Study BIM 😉

 

Sources:  

http://excelle.monster.com/benefits/articles/4983-5-jobs-being-replaced-by-robots?page=3

http://www.businessinsider.com/technology-is-destroying-jobs-and-it-could-spur-a-global-crisis-2015-6?international=true&r=US&IR=T

https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/

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2 thoughts on “Cannibalization of the Value Chain”

  1. Hey Sedale,

    Research has shown that not only gaining more knowledge about IT will prevent people from losing their job to robots, but is has become more and more important to have social ‘soft’ skills (Deming, 2015). Robots are (not yet) able to perform social skills, and these have become increasingly important in jobs over the last 30 years. The report shows that people who owned social skills saw in increase in their wages compared to other jobs over this last period.
    So, do not only study BIM but also train yourself on the soft skills!

  2. Hi Sedale,

    As much as I agree with you on the matter that cannibalization is happening, I also see it as a natural process which happens regardless of what kind of innovation happens. As a society progresses, certain skills/jobs/traditions become obsolete. Yet, we humans adapt to the circumstances. Otherwise, the example of American farmers would have lead to a massive increase in unemployment. What is especially important to me, is that the younger generation therefore chooses profession wisely. This might help in choosing: https://hbr.org/2016/06/the-knowledge-jobs-most-likely-to-be-automated

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