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Coronavirus and the robot revolution

Coronavirus and the robot revolution

As COVID-19 continues its global attack, many people are thinking that robots look like a pretty good investment right now.

If you're a company decision-maker spooked by the pandemic's massive disruption of economies and supply chains, greater automation of your production lines has a distinct appeal. Robots don't get paid, demand benefits, commute, take vacation, or go on strike. They also don't take sick leave, ask for PPE, or sneeze on other robots. Also, crucially, you can put robots wherever you like – making it easier to take production back to your home country.


If you're an investor trying not to check the balance on your 401K right now, you might be thinking about how automation can make companies more efficient and more profitable, pushing stock prices higher so that you can retire before you turn 80.

If you're a consumer, you might see new value in transactions that don't include the kind of personal contact that spreads deadly viruses.

For all these reasons, COVID-19 will accelerate a process of automation that was already well underway in many sectors. Research shows that the global financial crisis of 2008-2009 already led to the replacement of many workers with machines.

A few thoughts on the implications….

It won't happen all at once. This kind of change takes lots of investment that businesses won't make at a time when demand for their products is low.

Some jobs are easier to automate than others. Coronavirus doesn't change that, even if it creates economic incentives to think more deeply about what's possible. In the US and Europe, employers will be looking in particular to automate many of the millions of retail, services, and manufacturing jobs that have been vacated in recent weeks.

Overseas jobs will also be a target if pressure to bring production "home" now grows.

New kinds of jobs are coming. History shows that technological change can create more jobs than it kills. But the new jobs are likely to fall into one of two broad categories: digital-age jobs for a digital economy and service jobs that don't pay like they used to. That leaves a lot of people out.

Automation will worsen inequality in wealthy countries. This transition to new forms of work won't come easy. People with skillsets better suited to the digitized workplace will have a much easier time than people expected to develop those skills from scratch. The result could intensify the inequality that has already stoked populism and upended political establishments in so many countries in recent years.

Robots pose a special challenge in emerging markets. Hundreds of millions of jobs are at stake in lower-wage countries that have operated for decades as factories for the world's textiles and light manufacturing industries. The International Labor Organization has warned, for example, that 140 million jobs in Southeast Asia alone are at risk of automation in the next 15 years. That's more than half the region's salaried labor force. And that was before the pandemic created new reasons for companies to turn to robots in order to safeguard their production and supply chains against future disruptions.

In both rich and poor countries, governments better be ready. Lost jobs and greater inequality mean that political leaders better be thinking about ways to rewrite the social contract to help those people who can learn new skills and new jobs, and to support those who can't. Displaced people make trouble in democracies and dictatorship alike.

One last thought….

Robots gets viruses too! Cyber-viruses can be just as virulent as biological ones. (Hey, maybe robots do take sick leave.) If companies move to automate their labor forces, they'll also have to invest massively in cybersecurity to immunize them against hackers.

The Hindu Kush Himalayan region, stretching for more than 2,000 miles, is home to the world's highest mountains. The mountain range is also home to the world's third-largest concentration of snow and ice, earning it the moniker the third pole; only the North and South Poles contain more. The glaciers of the Hindu Kush Himalayas are the main source of fresh water for around two billion people living in the region. However, by the end of this century, two-thirds of that snow and ice could be lost because of climate change. A network of data scientists and environmentalists around the world, and on the ground in the Hindu Kush Himalayas, are working to understand the extent of glacial melting in the Hindu Kush Himalayan region, its effects and what can be done to minimize its impact. To read more visit Microsoft on the Issues.

When Italy's Prime Minister Giuseppe Conte resigned Tuesday — plunging the country into chaos as it faces once-in-a-generation public health and economic crises — he became the fourteenth Italian to vacate the prime ministership in three decades. (For contrast, Germany has only had three chancellors since 1982, and France has had five presidents.)

But Conte, who had no previous political experience until he was tapped for the top job in 2018, is not so much throwing in the towel as he is taking a massive gamble that President Sergio Mattarella will again appoint him to head Conte's third coalition government in less than three years.

The recent dysfunction is unique even within the context of instability-prone Italian politics. How did Italy get here, and what might come next?

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Ian Bremmer shares his perspective on global politics on this week's World In (More Than) 60 Seconds:

What did you think of Xi Jinping's speech at the virtual World Economic Forum?

Well, his last speech at the real World Economic Forum in Davos, I remember being there four years ago, and given that Trump had just been elected, Xi Jinping gives this big, "We want to stand up and be leaders while the Americans are doing America first." And generally speaking, was probably the most important speech of the week. People liked it. This is a pretty different environment, not so much because Trump has gone, but rather because support and belief in Xi Jinping is pretty low. I will say one thing that was generally well responded to was the call not to enter into a new Cold War. Anybody in the business community generally supports that. There's so much integration and interdependence between the US and the Chinese economies that when Xi Jinping says, "We need to find ways to continue to work together," I mean, this is the pro-globalization audience he's speaking to. They generally agree. But otherwise, the message fell pretty flat. So, the idea that China is going to be globally useful on issues of leadership, especially when it comes to anything that might threaten Beijing's sovereignty, they check global norms at the door. And a few examples of that, when Xi called for support for the rules-based international order, that's in obvious contrast with China's violation of the one country, two systems framework in Hong Kong. And they said, "Well, that's a domestic issue." Well, actually that's not what your agreement was with the British handover. And just because you're more powerful doesn't mean that norm doesn't matter anymore.

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Over the weekend, some 40,000 people in Moscow and thousands more across Russia braved subzero temperatures to turn out in the streets in support of imprisoned Kremlin critic Alexei Navalny. More than 3,000 protesters were arrested, and Navalny called on his followers to prepare for more action in the coming weeks.

But just who is Alexei Navalny, and how significant is the threat that he may pose to Vladimir Putin's stranglehold on power in Russia?

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Angry farmers take Indian fort: In a major and violent escalation of ongoing protests over new agriculture laws, thousands of Indian farmers broke through police barricades and stormed the historic Red Fort in New Delhi on Tuesday. At least one protester died in the chaos, while the government shut down internet service in parts of the capital. Farmers and the government are still deadlocked over the new laws, which liberalize agriculture markets in ways that farmers fear will undercut their livelihoods. The government has offered to suspend implementation for 18 months, but the farmers unions are pushing for a complete repeal. Given that some 60 percent of India's population works in agriculture, the standoff has become a major political test for the government of Prime Minister Narendra Modi's ruling BJP party.

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The GZERO World Podcast with Ian Bremmer. Listen now.

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