In his latest interview with Financial Sense, Louis-Vincent Gave discusses his new book, Too Different for Comfort, where he identifies four major trends affecting the world today.
The first, and perhaps greatest, he points out is the revolution in robotics, or the “Robolution,” as he calls it.
“Today, given the exponential growth in technological innovations in cameras, speech recognition, vision sensors and wireless networking, combined with the dramatic drop in the price of robots, we are possibly reaching the point, where the outlook on robotics is so promising that we may now be entering a new industrial revolution...”
To understand how automation and robotics will affect the job market, Gave presents four classifications of skill-sets, which, he says, “depending on what skill-set you’re in, determines whether you get replaced.” They are: 1) non-repetitive and non-complex, 2) non-repetitive and complex, 3) repetitive and complex, and 4) repetitive and non-complex.
The first category, he says, is actually the biggest source of job growth in the developed and emerging markets and not in danger of being replaced. Examples of these include gardener, plumber, ski instructor, etc.
The second category, non-repetitive and complex, is also not in danger of being widely replaced and sees increased wage growth. The only caveat, Gave points out, is that these typically require a much higher level of education and are much more competitive. Examples include pharmaceutical research, software coding, civil engineer, or a hedge fund manager, just to name a few.
The third and fourth categories, both containing a repetitive element, are clearly in danger of the Robolution and include, on the more complex side, airline pilots, surgeons, or equity traders. On the other hand, manufacturing jobs, low-end farming, packaging, and other less complex, repetitive occupations have almost disappeared in the western world where robots have become commonplace on factory floors.
Interestingly enough, Gave sees a major problem brewing where college debt and tuition costs continue to skyrocket for an area of the job market where employment opportunities continue to diminish due to automation. The greatest way to address this problem, he points out, is by following the example of developed nations with very low unemployment, like Germany and Switzerland, where they provide job training for high-demand, non-repetitive, and non-complex areas of the job market—areas that, incidentally, face much less of a threat.
In the remainder of his Financial Sense interview, Gave also addresses the three other major changes affecting the world today: the continued collapse in the velocity of money, the extremely low cost of energy in the U.S. versus the rest of the world due to the “shale revolution,” and, lastly, the increasing internationalization of the renminbi.
For each of these major trends, Gave also shares a number of important metrics that investors should monitor to see how they are playing out and whether trouble lay ahead. For more information, download a free copy of Louis-Vincent Gave's new book, Too Different for Comfort, or catch his recent interview with Jim Puplava on the Financial Sense Newshour.
