The Robots Are Coming, But Maybe Not Where You Think
Jul 11, 2019

Interesting new take on the fourth iteration of the industrial revolution from our friends at Oxford Economics, via Industry Week magazine: manufacturing worldwide could lose 20 million positions by 2030 (that's alarmingly close), making the sector 8.5% smaller than "if robots were not remaking the market," according to the research firm's report. So far this seems to repeat previous prognostications, but, wait - there's a twist.

In this study the impact will not be evenly spread. It will be spotty and inconsistent. The pockets of workers most vulnerable to automation will often be found in rural areas with a traditional, labor-intensive industrial base (i.e., those places mired deep in the third industrial revolution). Oregon is the U.S. state most likely to be affected, while the worst-hit region in the U.K. is likely to be Cumbria. In other words, the older industrial regions which have already been left behind, politically as well as economically, will be further devastated. Automation will be much more benign in areas around "information intensive" metro areas. For example, the report found the proportion of jobs at risk of being taken over by robots was far higher in western Slovakia than around Oslo.

We're not done here. The coming round of replacing people with systems may pack an extra kick. Consider, more than half of U.S. factory workers displaced by robots over the past two decades were absorbed into just three employment categories– transport, construction and maintenance, and office and administration work. Yet those categories are the most vulnerable to further automation over the next decade. In effect, robot systems will still be chasing us poor old homo sapiens out the factory door even as they shut down the alternative employers. (That's a "double whammy" for those of you old enough to remember Al Capp's Lil' Abner stories. Hey, millennials - google it. See what you missed.)

If this report is correct, it has strong implications for several aspects of risk management and especially for the siting of new or expanded operations in or adjacent to thriving talent pools. If you combine the Oxford report's insights with the demographic facts of the ongoing baby bust in our OECD countries, the war for talent is just getting started and location will be a key issue in who wins or loses. In effect, we're all in the restaurant business now - location, location, and location.

Cartoon of a Robot Angrily Making A Human Worker Leave a Production Line


Can We All Say "Collateral Damage"?

Chew on this for a moment: "Iranian hackers are already targeting U.S. companies with specialized malicious software designed to wipe the contents of their computer networks rather than to simply steal their data, Chris Krebs, director of the Homeland Security Department's cybersecurity division, warned in a Saturday email." That's the lead from an article in the Washington Post last week. The Post ran a chilling account of the growing international tit for tat now occurring between the US and Iran (among others). Reports indicate that the US is attacking Iranian military and related government systems. These are "hard" targets which require top shelf hacking skills and perhaps some insider knowledge of the kind the CIA and the NSA specialize in.

According to John Hultquist, director of intelligence and analysis at the cybersecurity firm FireEye "[The Iranians] are going to go for the soft underbelly. In the past, that's been our financial sector. They've also demonstrated interest in everything from energy to transportation to several other sectors." In classic warfare (real bullets and all that) hits on civilian targets are considered collateral damage - too bad but it happens. In this scenario, your systems, your ability to do business, will be the intended target of ransom exploits or, much worse, wipe attacks which destroy data files wholesale. The Iranian hackers are state-sponsored professionals.

What does this mean for risk management? Perhaps your company, like the City of Baltimore recently*, thinks you can't afford better system security. If IT security budgets have been stalled or dialed back, a reconsideration may be in order. Have you updated your applicable coverages recently? Remember that one major international manufacturer recently had a $600M cyber damage/business interruption claim denied on the basis that the attack was an "act of war." Are you vulnerable to a similar denial of coverage if your systems are hit by state-sponsored Iranian hackers? Don't assume. Ask.

*Now a shoo-in for the Seriously Bad Decisions Hall of Fame - right across the aisle from the Shrine of Bad Referee Calls dedicated to the New England Patriots.


Quick Take 1:
So What's in Brownsville, Texas?

The nation's best drivers, according to Allstate's new report on "America's Best Drivers". The runner up was Boise, Idaho. Among other stats, Allstate looked at the average time lapse between accidents for the same driver. In Brownsville it's almost 15 years. The report does not explain whether collisions with armadillos are counted in this tally.

The report lists the 200 major US metro areas in descending order. If you have responsibilities for fleet operations, you might want to check out the report for an idea of where the greater potential risks lurk on the highways. The worst cities? We knew you'd ask. Next to last was Washington, DC. This should surprise no one who has navigated the DC maze of traffic circles, one way streets, and distracted lobbyists - or the 495 beltway, a promising setting for a Steven King novel.

Dead last? Baltimore with 4.2 years between collisions. Why the dramatic differences? Well - geography, traffic density, prevailing weather, age and upkeep of the infrastructure, local culture and customs. As the Allstate reports demonstrates, the difference between Brownsville and Baltimore is a factor of four. Do your fleet safety programs account for this degree of difference? Still think one size fits all?

A photo of roadkill, painted over with yellow road lines.

The middle of the road in Texas - yellow lines and a dead armadillo.


Quick Take 2:
Trans Issues and Risk

As we've all noticed, trans issues and controversies have been much in the news recently. Question - have you thought about what this means for risk management? Don't sit back and figure that this is only an HR matter. The rights and needs of trans employees and customers have to be factored into health and safety plans, policies and materials and your corporate coverages have to be clear if any type of employment-based or third party legal action looms involving an alleged failure to observe and protect those rights and needs.

Fortunately, Legal Management magazine has put together a short primer on the subject with a wealth of links to other sources. Check it out. Do you have adequate policies and practices in place? For example, have you thought through how safety equipment is assigned? That used to be simple. Most jobs requiring serious safety equipment were done by men. You can't make any easy assumptions today.

Our trans colleagues - who are also our relatives, neighbors, and friends - have worked hard for recognition, rights, and understanding. Is risk management with the program? Talk to your colleagues in HR. There should be no space between risk and HR when it comes to human rights and decency.


Share This
* Required Fields