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Post Technology and Job Loss; The Cloud
Created by John Eipper on 01/26/13 9:45 AM

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Technology and Job Loss; The Cloud (John Heelan, -UK, 01/26/13 9:45 am)

Richard Hancock (25 January) rebutted Istvan Simon's characterisation of reports of job losses emanating from technology (especially computers and IT) as "alarmist." During my career, I designed and implemented many, many computer-based applications. Usually the expenditure was justified on predicted savings in manpower costs and ability to do things differently.

Initially, there was a strange situation in which the numbers in workforces actually increased. Installing more efficient administrative systems not only enabled corporations to attack new markets, but also changed the job structure of many clerical staff to become more interesting and challenging. The advent of word-processing obviated the need for secretaries using shorthand to record their bosses' letters and then type them later. Bosses did their own letters, although some found it difficult to adjust and retained their secretaries. (Others maintained them for status and other reasons, changing their job titles to "personal assistants.")

Over time that changed. Many of the more mundane clerical jobs were no longer needed, and lay-offs and redundancies resulted. Luckily at that time (1970s and '80s), the economy was booming and new jobs were reasonably easy to obtain. However, the increase of advanced technology and new materials-supply techniques in manufacturing (together with the union strife I have described previously) did lead to bigger layoffs. The growth in the use of machine tools and robotics substantially reduced manpower costs and management time wasted on union disputes. The switching to the "Just-in Time Delivery" philosophy of materials-supply learned from the Japanese removed not only the need for major warehouses and their investments in staff and buildings, but also deduced the need to fund materials before they entered the manufacturing process. These advances happened at the time when manufacturing jobs were becoming less available due to market downturn, so the labour market could not pick up the excess manpower available.

Yet there were/are inherent technological and business risks in the spread of technology. The "Just in Time" process works well but can be as fragile as a house of cards if something goes wrong in the value-added chain. Failure to deliver in time for the manufacturing process results in expensive machinery and manpower standing idle. In the technology sphere, how many times do we hear that delays are being caused by "the computer is down" or "the machine is running slow today"? Sometimes the excuses are even true.

However, to my mind, there is an even bigger risk, increasing day by day, with the spread of technology and its control falling into a reduced number of hands. As systems analysts, we were always looking for the "single point of failure" and designed systems and applications to avoid that source of failure. (I designed and implemented a fully resilient system that switched automatically to a "hot standby" system that prevented a major turbine-blade factory from grinding to a halt through computer failure. That was in the late 1960s. Fifty years later machines and techniques are so much better and reliable!) Nevertheless, I would be nervous about relying on "cloud computing" alone either for processing or storing critical data. Undoubtedly, it will take advantage of the latest full redundancy technology and techniques, but it would still be in the hands of somebody else. (When running my own small business, I avoided such risks by always keeping a hard copy of my critical data.)

Then we need to consider the impact of widespread data communications. This technology enables almost instant communication to most parts of the world. (Our noble editor manages to maintain the flow of of information and comment from wherever he happens to be in the world at that time! [Thanks, John, for your kind word!--JE]) Thus we see the relative ease with which corporations can move clerical operations from high-cost to low-cost economies. However, the technology also enables corporations to move their headquarters from high-tax to lower-tax locations; multinational and international is slowly giving way to transnational. The spread of online retailing is challenging the existence of retail shops--three major UK chains have recently gone into liquidation, being unable to compete with online shopping.)

In summary, times change and are changing. In past decades, I would have agreed that reports of job losses through the introduction of technology were "alarmist." However today the spread of technology is mainly beneficial. We can do things we only dreamed about (and I wrote about 50 years ago) at substantially lower cost. Yet there are inherent risks in the spread of technology--economic and social. Corporations can blackmail the governments of their home nation-states that they will move if their wishes are not respected (UK governments are regularly threatened by the banks and finance industry that it will take its business to another capital if legislation affects their potential profits.) Technology could enable today's nation-state structure to morph into a corporate-state structure sometime in the future.

Then there is the risk to personal liberty. Technology allows governments to observe their populations electronically. Alain de Benoist has written extensively on this matter, and I have been able to provide him with information pointing to how the UK population is possibly becoming the most "watched" in Europe if not the Western world. Electronic "sniffing" technology is a fundamental tool for the world's intelligence services (e.g. Project Echelon). Further, local intelligence legislation usually enables the inspection of any data files held in that territory (e.g. Homeland Security legislation allows inspection of files of US and foreign spending patterns recorded by major global credit-card companies and held in the US for back-up reasons).

Jeremy Bentham's "Panopticon" designed in the 18th century has finally arrived in the 21st century. The name now dignifies software that boasts that "the world's most successful financial institutions, telecoms companies, energy firms, and major corporations use Panopticon dashboard and visual data analysis software to monitor performance, analyze risk, detect fraud, and identify anomalies in vast amounts of real-time data."


So technology can be both a boon and a curse.

JE comments: John Heelan has reminded us for years how our privacy is ever on the decrease.  Will "the Cloud," which holds our most intimate information in some nebulous ether, be another nail in the privacy coffin?  There's something spiritual and haunting about this Cloud--it's everywhere and nowhere at the same time.  What if it is taken over by some real evildoers?

I'm going to ask WAISworld's IT director, Roman Zhovtulya, if he'll send his thoughts.

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  • The Cloud (Istvan Simon, USA 01/27/13 5:13 AM)
    John Heelan (26 January) is right about some of his concerns about the spread of technology. Every technology can be used for good or for evil. Nonetheless, I think that his fears, while very justified for the unwary, are nonetheless also to some extent exaggerated. JE asked:

    "Will 'the Cloud,' which holds our most intimate information in some nebulous ether, be another nail in the privacy coffin? There's something spiritual and haunting about this Cloud--it's everywhere and nowhere at the same time. What if it is taken over by some real evildoers?"

    This is an interesting science fiction question, but the answer is no. Nor does the Cloud entail any loss of privacy, at least not for the well-informed.

    Does keeping your money in banks lead to loss of privacy? What could be more private than how much money you have, and yet I bet that JE does not keep his money in his mattress in little red envelopes.

    For those weary of the Cloud and their private data: Encrypt your data before storing it on the Cloud. Use PGP (Pretty Good Privacy). It is publicly and freely available, and will make your data unreadable by anyone but you, or those with whom you share the key with which you encrypted your data.


    JE comments: Maybe I have a science-fiction brain, or am I just paranoid? I should stress to Istvan and the world that we don't keep cash at home. There's nothing to steal here except a lot of books, a 500-lb piano and three cats.  Please help yourselves to the cats...

    Yet it's not a stretch to say that cyberwar will become an ever-larger facet of human conflict. What better way, for example, to bring about the collapse of a nation's economy than by hacking into its banking system?

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    • Online Banking and Privacy (John Heelan, -UK 01/27/13 7:22 AM)
      Istvan Simon asked on 27 January: "Does keeping your money in banks lead to loss of privacy?" The answer is "Yes." However, generally we have no alternative, as the currency in which our monetary value is recorded is electronic and not hard cash that could be stored under the bed. Data is much easier to steal than cash.

      Privacy loss can occur in several ways. Law enforcement/intelligence services can gain relatively easy access to your bank records. Banks are legally required to provide data on their customers to various institutions and credit-checking agencies, some of whose operations are themselves fraught with danger. Then there is the increasing level of identity theft. Although for obvious reasons banks claim that their online systems are secure but the pronouncements are usually just wishful thinking to avoid bad PR that would dissuade customers from benefiting the banks by using online systems. They usually do not broadcast or even acknowledge when their data security has been breached.

      More and more financial institutions are outsourcing their call centres to low-cost countries like India and the Philippines. Identity theft fraud is rife in India, which has technically well-educated and intelligent people working for a pittance. Some are easily tempted to capture data illegally to pass onto fraudsters. Then there is online banking, whose security can be breached by malware on their customers' computers. By the way, banks often refuse to reimburse funds stolen this way, passing the blame onto the customer!

      How do I know all this? One of my major projects was to install machines in each of the 1900 or so branches of a major UK bank. Another was setting up UK call centres for one of the world's biggest mobile phone companies.

      As a result, my own security policies are: avoid on-line banking, do no business with a company that outsources its data operations outside the coverage of UK law, scrutinise closely my bank and credit-card statements while ensuring that my machine is kept clear of viruses, data loggers and malware. An overreaction? Maybe. But the cost and pain of attempting to recover hard-earned funds lost through identity theft and fraud would be far worse.

      A further thought, that's a bit techy:

      Although PGP (Pretty Good Privacy) is usually secure in itself, storing the PGP key on a machine compromised by data loggers or malware generally is like telling a thief your PIN. Most people online these days, I suggest, do not take enough precautions to secure their machines.

      JE comments:  Keep a close watch over your money:  this is advice from my mother that I'll never forget.  But how does one avoid on-line banking, as John Heelan recommends?  Try to do an international funds transfer, for example, without logging on.
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  • Privacy and Job Loss vs Opportunities and Dreaming Big (Roman Zhovtulya, USA 01/27/13 3:23 PM)

    In response to John Heelan (26 January) and others, there seem to be two distinct concerns about new technology and the Internet in particular--loss of privacy and the fear of unemployment.

    As with anything, there are two sides to the coin here, and I prefer to capitalize on the opportunities, which are usually much greater than the threats.

    Somebody once mentioned that "the Internet is the greatest invention since the discovery of fire, for mankind" and just as fire (or any other powerful technology), it has a great potential for good and for evil. Despite the many gloomy scenarios our media feeds us on a regular basis, history shows that we tend to use new technologies overwhelmingly for the good of mankind.

    Privacy vs Reputation

    As our world becomes more interconnected, the ability to remain completely anonymous will get harder, if we want to participate in and reap benefits from the new global economy.

    However, it'll also get much harder to behave dishonestly--any type of "monkey business" will likely get disclosed to a worldwide audience at the speed of light (think http://wikileaks.org, http://ratemyprofessors.com or perhaps even http://dontdatehimgirl.com).

    On the other hand, great customer service gets rewarded time and time again, be it on eBay, airbnb or many other websites that thrive on reputation.

    Here are some amazing examples of how people capitalize on the opportunities the new technology presents:  



    The bottom line is, we'll need to adjust our expectations: The default mode will be "public" (we'll need to actively ensure that the setting is private, before sharing any secrets)--not unlike celebrities or public figures nowadays.

    I started lifelogging (http://en.wikipedia.org/wiki/Lifelog) about 2 years ago for self-improvement purposes (you don't forget anything and you always have a subjective point of reference), and to protect myself and my company (WebServiceCenter was falsely accused of promising to develop certain features and the judge sided with the accuser, despite the fact that those features were never mentioned in the contract. From then on we instituted the policy of recording all customer interactions, so that the next time the judge would have more evidence to decide on, not just who can talk better in court).

    The advantages of lifelogging for me have surpassed all expectations. Not only can I re-live any of the fascinating conversations I have on the regular basis here in Silicon Valley (the most recent one being with a co-founder of Y-combinator, the largest startup incubator in the area), I also don't have to worry about remembering any links, books, references, etc., and I can fully focus on the conversation at hand and think how to best contribute to the exchange.

    You can also Google "dash cam videos" to see how in-car driving recordings have saved lives, money and dignity for a lot of people.

    Overall, the benefits here is an improved security, more courteous people on the streets and safer neighborhoods.

    Here's an inspiring talk for those too pessimistic about the future:


    Job Loss vs Opportunities

    Human progress is a fact of life, almost a law of nature, just like gravity. No matter how a certain Catholic Pope tried to outlaw Newton's law of gravity, he was still crushed by a falling ceiling.



    History has shown that the best approach is to emphasize on the opportunities, brought by the new technology, rather than to oppose them.

    Among those who maximize on the opportunities are Jeff Bezos of Amazon, the Google guys and a number of other Internet millionaires/billionaires.

    Those who like to keep the things the same way should check how it worked out for the Amish:


    The problem for many people is that the rate of change is accelerating exponentially and it's getting harder to keep up:


    The solution is probably to dream big and get creative--with 100 billion neurons, a typical human brain is much more complex and powerful than any supercomputer, capable of generating new ideas and figuring out how to use the new tools at our disposal, be it Cloud computing or affordable space exploration.

    Case in point: Just a few days ago Deep Space Industries announced a first commercial venture for asteroid mining:


    Peter Diamandis of XPrize Foundation has long said that the future wave of billionaires will come from private space industry, and it looks like we are witnessing the beginnings of that already.

    Finally, here is a great article on the related topic (variation of wealth) by Paul Graham:


    His other essays are also as enlightening, controversial and logical at the same time:


    So, I think things are better than they look--we just need to learn to recognize and capitalize on the opportunities.

    JE comments:  Great to post this note from our IT Director, Roman Zhovtulya, who is the most important "invisible" citizen of WAISworld.  I hope Roman will be inspired to join our on-line conversations more often.  As WAISers can tell from the above, Roman is not only a clever computer guy, he's also an unwavering optimist.

    I should stress, however, that the Amish seem to be doing well these days--they are rich in land, which is increasing enormously in value, and many of them are also sitting on top of oil shale.  Moreover, they don't waste their money on the toys and gizmos we "seculars" think we need for survival.

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