Man vs. Machine: GE's Industrial Internet, Job Creation, and the "Low-value Customer"

This article, an overview of the growth plans for GE’s “Industrial Internet,” includes a couple of interesting paragraphs about GE’s plan to revisit vertical integration and the implications of this move for GE’s global manufacturing operations and workforce. Though GE’s plans involve a ratcheting up of its US-based manufacturing, this will not necessarily result in more US-based jobs, because these new on-shore factories will be for the most part automated and robot-operated. In anticipation of criticism for moving facilities but failing to fill them with humans, GE has published a paper which explains that workers will simply be retrained in how to be more productive in interacting with the machines, but which fails to explain how it is that such retraining will not result in job loss. This is especially disconcerting given that the new form these jobs will take, according to GE, “will require lots more math and science skills,” which is a well-known deficiency in the US workforce.

The article above led me to this article about GE’s relatively recent investment in Pivotal, a VMware spin-off that will work to develop software for use in GE’s Industrial Internet. In it, Pivotal CEO Paul Maritz is quoted explaining some of the effects of universal interconnectedness on business strategy: “Soon everything will have telemetry…Cellphone companies will want to see if a radio tower is overcrowded, and then do what airlines do – kick off the lowest-value customer.”

As the world’s industrial giants become more automated and interconnected, and hyper smart software engineers figure out how to turn every customer into a data stream, here we begin to see two effects which may increase margins but will almost certainly hurt revenues: (1) fewer jobs, and a workforce insufficiently educated to fill the jobs that remain; and (2) an opportunity for goods and service providers to identify (and literally excommunicate) those customers the numbers say they should care least about. Projected out a few decades, are big tech companies putting themselves at huge risk here by figuring out more and more efficient ways to cut the human element out of the technology ecosystem? Forget customer service: the telecom company has decided whether or not you matter by the time you walk in the door. And if the greatest innovations of our time are those that make humans less necessary, at what point do we extinguish the incentive for humans to innovate at all? My bet is that the companies that figure out how to use these technologies to enhance human engagement – not minimize it – are the ones that will be most successful in the long run.