JapanOct 24 2017

Job-destroying monsters and the 'super-aged'

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Job-destroying monsters and the 'super-aged'

The context of these issues is that we are all living longer. For most of us that is good news, provided that we have taken good care of our health and protected our investments. But the downside is that those provisos are not always easy to follow, and old age can be a difficult time even for the very rich.

In addition, demographic figures often hide nasty surprises, such as falling birth rates. This has already happened in Japan, with 25 per cent of the country’s 127m-strong population now aged over 65. Low birth rates compound the problem. Japan’s health ministry forecasts the population will shrink by as much as a third by 2065, while the old are living longer. As a result, this ratio of over 65s to the total population is expected to rise to more than 40 per cent.

Changing work demand

There are an increasing number of ‘super-aged’ countries in the world, for whom at least one in five of the populace is aged over 65. The US and UK are among them. The average age of an American nurse is nearly 50, and that of a construction worker 40. The UK, just like Japan and the US, is also fast running out of young workers.

Yet of the 30 fastest-growing occupations across the Atlantic, as forecast by the US Bureau of Labor Statistics, nearly half are some version of nursing – and especially social or care workers.

However, these are some of the lowest paid and least esteemed of all working categories. Andy Burnham, a former minister for health and now mayor of Manchester, recently reported on the 17-hour shift of one such worker in the UK: 48 visits, with the shortest at only two minutes, and no time for compassion, conversation or care. Furthermore, 50 per cent of these workers are paid less than £7.50 an hour.

The problem is more than demographics. It is also capitalism, which works by ‘scaling up’ an individual’s capacity: a warlord through an army, a lawyer or accountant through trainees but increasingly through computerised libraries or procedures, and a company boss through factories and distribution systems.

But a nurse or care worker cannot be scaled-up. Good or bad, an individual can only work so many hours, offer an honest day’s work, or skive off and still collect a day’s pay for bad service. The employer cannot obtain more profit, except by cutting wages, insisting on more and shorter visits, and otherwise reducing the quality of the service. Austerity worsens the problem but is not its cause.

The coming of the robots

The Japanese hope to resolve this problem through the use of robots. They have been aware for several years of a shrinking workforce, rising demand and cost of social care, hampered by the lack of sufficient recruits. Their quest has been aided by domestic popular culture: childish and friendly anime characters that first came to prominence in the 1960s have helped society conceive of a less threatening type of robot.

It is IT allied with artificial intelligence that will keep us comfortable when we are old.

Nowadays in Japan, the real-life robots are everywhere – from hospitals and nursing homes, to schools and even airports and train stations. The elderly know ‘robear’, a strong but gentle machine that helps patients into wheelchairs and supports them to and from the bathroom. Young children are friends with ‘vevo’, another friendly bear who greets them every morning at their primary schools and monitors their heart rates as they nap after lunch.

This is the future for all of us. Robots have already removed thousands of jobs from the manufacturing industry. It is relatively easy to programme a machine to do what a team of workers are already doing – such as assembling or painting a car – but hard to do with matters that cannot be so easily foretold. 

Every midnight thousands of toilers begin to work on dimly lit production lines, assembling ‘bento’ boxes. These are the universal luncheon boxes of Japanese workers, and consist of a little bit of this, and a little bit of that. But the ‘this’ and ‘that’ depend on tomorrow’s expected weather, the daily supply and cost of different foods, and the chef’s expertise. 

Despite considerable investment and a strong desire to succeed, no robot has yet been able to handle the picking and packing of the chef’s choice in a bento box. Perhaps the requirements of the average human can be forecast, but the individual still surprises, and this is why humans are needed to manage ‘robear’ and ‘vevo’, and pack bento boxes.

Scaling up the care worker

The dreams that led to the TMT (tech, media and telecom) bubble of the late 1990s were imaginative but impossible. It was only the introduction of Apple’s iPhone in 2007 that made them a potential reality. 

For the first time in history anyone could have a powerful and flexible computer, not just in an office but in his or her pocket. That handheld computer is now bringing about the ‘internet of things’.

This may also give the care worker and nurse the freedom to concentrate on what humans do best – to give comfort when needed, talk with and care for their patients, knowing that their information equipment is monitoring the life signs of those in their care, maintaining all necessary records, checking food and other tastes and needs, and advising them when human interaction is needed by the patient.

In other words, these will not be the frightening, job-destroying monsters of the factories, but extremely diligent and very boring personal assistants, incapable of forgetting what needs to be remembered and recorded. Some may well be personable anime-like robots, but others will be handheld developments of current medical instruments. It is IT allied with artificial intelligence (AI) that will keep us comfortable when we are old.

Of course, those apps are still to be developed and, if this is to happen, western bureaucrats will need to be more conscious of the looming demographic crisis. Young politicians think they will live forever and have all the time in the world to bring about their reforms. Elderly bureaucrats will know what lies ahead of them, so maybe serendipity (plus fear) will solve these problems for us.

Investing in the future

This investment theme is set to run for many years, and Shinzo Abe’s government has established an industrial revitalisation strategy for Japan based around robots. Enthusiasts for robots can try the robo ETF, which has 30 per cent of its assets in Japanese companies. But choosing the right robots today might be akin to picking the future manufacturer of driverless electric cars, when the first such model is yet to be tested.

There are better alternatives. AI needs a vast network of ‘electronic plumbing’ behind it if its designs are to work well. The two investment trust survivors of that bubble – Herald, founded in 1994, and Polar Capital Technology, launched in 1996 – have both done well for clients and the industry since inception, turning £1 of capital into more than £10, despite the collapse in 2000. 

The investment managers of both are knowledgeable on the intricacies of electronic plumbing, and what is happening to IT. Their reports are essential and fascinating on this area of future investment, and definitely worth the time to research.

These trusts follow two different philosophies. Herald finds, examines and supports new ideas and companies, while Polar invests in larger firms, many of them quoted. There is the need for both, although at present these are the only two British investment companies specialising solely in the TMT sector. 

Neither pay dividends, but it is the growth of the future that they are chasing. As such, they look much better bets than the Twitters, Facebooks and Googles beloved of many tech investors.