Robots

Robots

The Brookfield Institute for Innovation and Entrepreneurship sent me a copy of their latest report on the impact of automation on Canadian jobs.

The report, entitled The Talented Mr. Robot: The Impact of Automation on Canada’s Workplace, attempts to look at the Canadian job market over the next 10 to 20 years:

The report indicates that nearly 42 per cent of the Canadian labour force is at a high risk of being affected by automation ”“ the replacement of workers by technology and computerization ”“ in the future. For years, automation has been restricted to routine, manual tasks. The more recent rise of artificial intelligence and advanced robotics means that automation is now entering the realm of cognitive, non-routine tasks and occupations…

I have posted about this before here. The folks at Citi produced an exceptional report along similar lines. You can download their pdf here.

I suspect the transition to fewer jobs for highly skilled people may not end all that well. We are already starting to see what happens when a large part of the population becomes marginalized in terms of employment opportunities.

Liberals and the One Percenters

onepercent

Canadians elected a majority Liberal government yesterday. And the first order of business for the new government?

We will give middle class Canadians a tax break, by making taxes more fair.

We will cut the middle income tax bracket to 20.5 percent from 22 percent ”“ a seven percent reduction. Canadians with taxable annual income between $44,700 and $89,401 will see their income tax rate fall. This tax relief is worth up to $670 per person, per year ”“ or $1,340 for a two-income household.

To pay for this tax cut, we will ask the wealthiest one percent of Canadians to give a little more. We will introduce a new tax bracket of 33 percent for individuals earning more than $200,000 each year.

Fairness is a bit of a stretch in terms of taxation policy. The top 1% of income earners paid over 21% of total federal and provincial taxes in 2010 — and their taxes went up since then — and the top 10% paid almost 55% of all taxes in the same year. The bottom 50% of Canadian income earners contributed only 4%.

Just who are Canada’s one percent?

Yes, there are the bank presidents and corporate CEOs. But they are a small minority ”” they are the 0.01 percent, the “plutocrats” of Chrystia Freeland”™s Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. So who are the others? There are many 1 percenters in the sectors providing services to business, such as accounting and consulting. There are many from the professions ”” law and medicine. The lawyers will most likely be mid to late career, in large firms. Most judges are in the 1 percent. The doctors will be specialists rather than family practitioners. The 1 percenters are the senior administrators of our hospitals and our universities. They are also the senior civil service and the top people in many quasi-public agencies. And there will be the star anchors and commentators from the major television networks and newspapers. The leaders of big-city museums, opera and ballet companies and symphonies are also 1 percenters. In other words, the 1 percent are the leaders in each of their sectors: the elites of the business, professional, educational, health, government, media and cultural sectors.

Probably the most insightful commentary that I have read about Canada’s one percent was published by George Fallis for the Literary Review of Canada. As George points out in his article, the problem with the one percent is not a tax problem.

2015 Internet Trends

MaryMeeker

20 years. Mary Meeker’s annual Internet Trends report has been produced twenty times. Hard to believe.

Mary Meeker is a partner at Kleiner Perkins Caufield and Byers. She presented her 2015 report at the Code Conference yesterday.

Some of the highlights?

2.8 billion Internet users globally and 2.1 billion smartphone users.

Mobile continues to be a compelling platform for advertising and monetization. More so than print. We are spending far less time with print media than with radio, TV, Internet or Mobile.

Consumers expect to get what they want when they want it. Digital disruption will impact all businesses. And consumers are voting by choosing to use products and services that provide convenience.

We are re-imagining more and more aspects of our daily lives, as mobile users and entrepreneurs continue to push innovation and creative output across new online platforms. User-generated / curated / shared content continues to rise, ranging from pins on Pinterest to videos on Snapchat and Facebook. Business processes continue to be re-imagined, led by companies aiming to make data more useful and services more efficient. Demographic shifts are helping to accelerate technology changes. Millennials are now the largest generation in the workforce and their work / life expectations differ from previous generations. As connectivity and commerce continue to rise, we have witnessed broad impacts on consumer expectations, which in turn can alter work for many, to a form of work that can be flexible and supplemental.

You can get the full report here.

Vanished

WorldsBiggest

Gone.

The World’s Biggest Bookstore was neither the biggest, nor was it really all that nice of a store. But it was one that I had visited hundreds of times since it opened in 1980 on Edward Street in Toronto.

I wanted to walk by to confirm the news for myself even though I knew that the building had been demolished late last year.

And yes. It was truly gone.

Three Things You Need At Work To Be Happy

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As part of my financial planning, I had signed up for a Services Canada account to check on my Statement of Contributions for CPP. The government kept careful track of all my working years and, remarkably, I have worked for 38 years now. What kept me happy at work during all of that time?

Years ago, a mentor told me that people need three things to be happy at work.

1. You need to be part of a company that you can believe in. I call this the noble cause of the company. It transcends all of the numbers of business and goes right to the heart of why a company exists. How do we help people? How do we make an impact? This is our signature, and it means everything.

Believing in the mission of a company can be a powerful motivator and it can satisfy our inner longing for purpose and meaning in life.

2. You need to know that you can make a difference in your work. Steve Jobs said that we are here to put a dent in the universe. We are here because we matter. And spending most of our waking hours at a company where we cannot make a difference must be very discouraging and frustrating. I’ve had many different types of jobs over my life. With each job I did, whether it was delivering newspapers as a kid, working in the mines up north during my University years, or building my career, I have always thought about what I can do to make a difference at my place of work, to serve well. I sometimes think we have it confused. That our employer is obligated to serve us well. And there is certainly a need for a company to treat employees well. However, it does begin with your own contribution to your place of work.

3. You need someone that cares about the work that you do. This is often where most companies overlook a basic human need for acceptance and validation. Telling someone that they matter can be a very powerful motivator. Too often, workplaces forget to say something as simple as thank you for making a difference.

I was in my late forties when I had this discussion with a mentor. It made me think about all of the different people that had taken an interest in my life and how they had tried to help me in my journey. It made me think about why I was working and what work really means.

The Day Group

AccountsPayable

The accounts payable department at my company forwarded an envelope to me. It contained the following “statement”:

WellRespected

Well respected.

Worldwide.

What a disgusting tactic.

If you read the fine print, what looks like an invoice contains the following statement:

This is not a bill. This is a solicitation. You are under no obligation to pay the amount stated above unless you accept this offer.

The Better Business Bureau has received complaints about The Day Group:

BBB files show a pattern of complaints alleging that The Day Group LLC mails solicitations that strongly resemble invoices to businesses throughout the U.S., as well as, to foreign countries, such as Australia and Scotland. The solicitations, which feature a London, UK return address, offer to sell The Day Group’s “WORLDWIDE IT RESEARCH REPORT” for $5,000. Envelopes in which The Day Group’s solicitations are mailed are addressed to companies’ Accounts Payable departments.

On October 8, 2013, BBB wrote to The Day Group LLC, advising that the format of the company’s solicitation did not appear to comply with federal regulations; specifically, Title 39 of the United States Code, Section 3001, which requires that the solicitations contain the following statement in 30-point type in boldface capital letters in a color contrasting the background:

“THIS IS NOT A BILL. THIS IS A SOLICITATION. YOU ARE UNDER NO OBLIGATION TO PAY THE AMOUNT STATED ABOVE UNLESS YOU ACCEPT THIS OFFER.”

On November, 15, 2013, J. William Day of The Day Group LLC responded to BBB that the required statement had been added to the solicitations; however, copies of subsequent solicitations provided by recent complainants show that the mandatory disclaimer is not in the required 30-point bold type.

April 2015 and they are still playing games with corporate Accounts Payable departments. And the mandatory disclaimer is not 30-point bold in a colour contrasting background.

Scammers.

Return On Character

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Shortly after this book is published, I will celebrate my seventy-fifth birthday. For nearly forty years, I have served as an advisor and confidant to executive leaders in both large and small organizations. Most often, my clients have been chief executive officers.

Early in this work, I was struck by how most of my clients were very principled, and yet they demonstrated so little concern for the common good. They weren’t hostile to the idea, just focused only on what was good for their specific business.

I was also surprised by how little insight most of my clients had about the real levers for creating value. The executives I advised typically undervalued methods for inspiring and energizing the workforce and overvalued strategic financial and competitive moves.

Preface, Return on Character — Fred Kiel

Leaders can have a profound impact on a community of people. This is just as true for leaders in government as it is for leaders in business. Kiel’s hope is to inspire a movement to change people’s expectations of leadership and performance in organizational life in the for-profit and nonprofit worlds.

His book is an interesting read on character-driven leadership.

As I was reading the book, I started to think about Al Dunlap, aka Chainsaw Al. I believe he reflects the opposite of character in leadership. Here are a few observations about Al Dunlap.

His career was based on one absolute: the primary purpose of business is to make money for its shareholders.

From Wikipedia:

Albert John Dunlap (born July 26, 1937) is a retired corporate executive. He was best known as a turnaround specialist and professional down-sizer. The ruthless methods he employed to streamline failing companies, most notably Scott Paper, won him the nicknames “Chainsaw Al” and “Rambo in Pinstripes”. However, his reputation was ruined after he engineered a massive accounting scandal at Sunbeam-Oster.

Dunlap believed that the primary goal of any business should be to make money for its shareholders. To that end, he believed in making widespread cuts, including massive layoffs, in order to streamline operations. By firing thousands of employees at once and closing plants and factories, he drastically altered the economic status of such corporations as Scott Paper and Crown Zellerbach. He sold Scott Paper to Kimberly-Clark in 1995 for $7.8 billion and walked away with a $100 million golden parachute.

He was considered by many to be a psychopath. He was named as one of the Top 10 Worst Bosses by Time. He made a career out of business brutality by engineering a corporate restructuring that put 35% of the workforce at Scott Paper out of a job. He wrote a best-selling book titled Mean Business.

Al Dunlap had a profoundly negative impact on the employees he led and those employees had a right to expect better from their leader. And I think Dunlap’s leadership style serves to reinforce Kiel’s key message: character-driven leadership delivers higher value to all stakeholders — and it’s the right thing to do.

Robots

Robots

Technology at Work, the Future of Innovation and Employment is a lengthy report and well worth a read if you are thinking about where things might be heading from a technology perspective. It is not an encouraging view of the future.

From where we are:

Instead of labour, the greatest beneficiaries of the digital age have been shareholders. According to a recent estimate, the three leading companies of Silicon Valley employed some 137,000 workers in 2014 with a combined market capitalisation of $1.09 trillion. By contrast, in 1990 the three largest companies in Detroit had a market capitalisation of $36 billion while collectively employing about 1.2 million workers.

Fewer workers are creating substantial wealth and only a small fraction of those highly skilled workers will see their wages rise over their lifetime.

The report puts forward a scenario where almost half of the labour force will be at risk of automation as a result of recent trends in technology. Significant job loss, coupled with income inequality, will force dramatic changes to our current economic system although societal and political impulses will be slow to respond.

Cardiff Garcia provides this perspective:

Given the abundance of material wealth that now exists, the problems will be of a different nature. They will naturally involve the issue of wealth distribution and, within the psychological realm, questions of how to live with dignity in a world that no longer values one”™s work, at least in dollars and cents.

Such a world is likely to demand more than the kind of incremental reform that seems to limit modern politics. Tinkering with the progressivity of income tax rates won”™t be enough.

Governments will try of course. It has already happened in Ontario where the marginal rate for high income earners has topped 50%. The problem is that there are too few high-income earners to redistribute income in any meaningful fashion. In all of Canada, there are only about 250,000 tax filers in the top 1-percent of income. And the income threshold to be included in the top 1-percent is about $215,000.

We should not confuse high income with high wealth.

Shareholders have amassed incredible wealth, not high income earners.

And technology will continue to displace human labour at an incredible rate in the years to come.

We seem poorly prepared for this new world.