Data Driven Economic Development

We live in the age of Big Data. The access to massive amounts of data points matched with unprecedented computer power and broadband speeds are transforming the global economy. Who would have imagined that Amazon would have over 300,000 employees at the end of 2018 compared to just 100,000 at General Motors? Automation has been reducing the manufacturing workforce since the Kennedy Administration, and it hit agriculture well before that. Artificial Intelligence is invading the high-wage White Collar workforce in insurance, banking and professional services. E-Commerce is driving rapid expansion of job rich fulfillment centers but, in part, closed a record number of retail stores in 2017. Finally, Autonomous Vehicles is changing the transportation, auto industry and planning and development of cities.

Automation is the technique of making an apparatus, a process, or a system operate automatically and it takes the form of robots and machine learning through machines and computers doing human work. Automation is good for global economies as it increases productivity which has tended to produce higher wages jobs. The economic impact of automation does not provide economic benefit evenly throughout society as lower skilled, less educated and poorer workers tend to take the brunt of job losses. By 2035, 47% of U.S. jobs might be at risk due to advances in machine learning, automation, and artificial intelligence according to a recent White House report. Automation will impact substantially the operation of the insurance, banking and professional services, and retail industries. The reality is all industries will be impacted by Automation and its oldest son Big Data.

Much like globalism, the digital revolution cannot be stopped. In life, sports, business and economics, winners and losers are created by dramatic changes outside of the player’s direct control. The automation of industries will create economic winners and losers just as the globalization of the United States economy has. Companies seeking to win the Automation Revolution must jump into automation by centralize data gathering, implementing a well laid out automation business plan and, through an agile or progressive process based upon constant customer input, implementing computer software programs maximizing the customer experience while reducing long-term costs. Regions hoping to win the Automation Revolution need to follow five clear steps:

  1. Implement data driven economic development strategies focused on jobs that will exist when automation is implemented not just today;
  2. Create Smart Cities through the use of advanced telecommunications, lights and sensor networks to reduce crime, traffic congestion, and energy consumption;
  3. Capitalize on redevelopment opportunities presented by a Millennial Generation re-urbanizing America through historic preservation projects;
  4. Go where the digital jobs lead you by focusing on fulfillment centers and high-tech industries such as Autonomous Vehicles, robots and other industries prospering in the Automation Revolution; and
  5. Build a new generation of high-tech entrepreneurs driven by the availability of capital and Science, Technology, Engineering and Math (STEM) workers who will not only survive automation but be at the forefront of new inventions and industries.

Automation is not the end of the world, but companies and communities need to move quickly with thoughtful strategies to succeed.