The 3 Whys of Entrepreneurship
Author: Katerina Thomas
There are many reasons to start a business, all of which vary depending on the person, situation, and industry. Can automation and Artificial Intelligence be one of them? Let’s find out.
In this episode, Katerina talks about
Part 1: Why your job is not guaranteed
Part 2: ‘Smart’ technology is getting smarter
Part 3: Reasons to be entrepreneur
Part 1: Why your job is not guaranteed
When I was in school I didn’t know who I wanted to be in life. I didn’t like school, and I couldn’t wait to get out.
I liked the idea of becoming a ship captain because I liked the sea. But the idea of studying with a bunch of boys didn’t appeal to me. Then I liked the idea of becoming a vet. We had a dog so I thought that would be cool too.
Then I wanted to be a hairdresser. What girl doesn’t like to look pretty, right?
In reality, I didn’t know who I wanted to be, or what profession to choose. There was no real passion and no direction. No one discussed any of my career options with me. And, I had no idea about what jobs or professions would be in demand when I grew up.
My parents worked all day. I was a typical latchkey kid. A latchkey child is someone who returns to an empty home after school. Or a child who is often left at home with no supervision or with siblings because their parents are away at work.
Funny but my parents once forgot to pick me up from the nursery. I was 5 at a time. I remember the angry nursery teacher who told me off because my parents forgot to fetch me.
My father was a civil engineer and worked as a project manager. He worked on large-scale projects. Like hydro and power stations, and large bridge constructions. My mother worked in retail but spent a lot of years looking after her kids.
When I was born she went back to work. There were four of us in a family, six together with mum and dad, so quite a big family.
I was born in the Kola Peninsula, which is a large peninsula in northwest Russia located almost entirely in the Russian Arctic. So, it’s a very cold place. When I was about one, my parents decided it was time to move to North-East Russia, to the city of Magadan near the Sea of Okhotsk.
As you can imagine, the winter climate in Russia is quite harsh. But, my father worked outside a lot on the construction site. I don’t know if he liked his job. It was hardly a dream job but it paid the bills. His advice to me was to get a job and then earn a pension.
Starting a business was risky and it was not encouraged in Soviet Russia and getting a job was a safer bet. I remember days when he would return from work tired and sometimes a bit merry because I guess he needed a drink to keep warm.
The irony is, a few years later, what happened in Russia was a total wipeout of people’s assets, and life’s savings.. all in a name of ‘perestroika’ or a changeover from the old system. During the financial crisis of the 90s, millions including my father lost pretty much everything. His life’s savings were gone. And, a large chunk of his pension was gone too.
The government wanted a new system, with new rules, they wanted to modernise the society building capitalism. As for people, they had to find a way out of their financial mess without help from the government.
So, even when in my teens, I didn’t believe in the safety and security of a job. One day whilst still doing my advanced degree I started a business.
Automation and Jobs
Today is no different from what happened some 30 years ago to my parents. And this is why your job and your earnings are not guaranteed.
I did some interesting research for my book: Generation AI: The Rise of the Resilient Entrepreneur. And, I concluded that entrepreneurship might be the only viable option left for people. And the reason why it’s so is that their jobs no longer need them. Robots and AI (or artificial Intelligence) are doing the jobs.
Today news and blog sites are full of articles about how so much money has been invested in AI. Or, how many people lost their jobs to automation… Or that some creative robot threatening human artists. Or that companies used the latest AI technology to automate their processes.
Job automation is when technology reduces the number of employees required to do a certain job. And, this results in a massive boost in productivity and efficiency, costing businesses less and less.
If we go back to 2011 and look at some statistics and business data.. we’ll read that in 2011 big corporations generated $420,000 in revenue per worker. This was an increase of more than 11% over the 2007 figure. And, you will read those large corporations doubled their investment in IT i.e Information Technology.
And why is this significant?
Because it destroyed many full-time middle-class jobs. And, yes some new roles were created during the recovery that followed the recession of 2008. The economy grew a bit. But what’s interesting is that the majority of these new roles were created in part-time and temporary occupations. Many middle-class and middle-income jobs disappeared.
When automation swept through China in 2014, it forced many people to leave their jobs in factories. What happened to those people? They had to find jobs in other industries that were less vulnerable at the time, like the Hotel industry.
Of course, the Hotel industry is no exception. It’s been investing in automation too. You may have heard about the FlyZoo Hotel, located on the Alibaba campus in Hangzhou. It’s operated by robots and employs half as many staff as a conventional hotel.
So, when I started researching for my book, I also found that in many companies there is an increasing emphasis on hiring ‘superstars’.
In 2012 there was a study published in the Journal of Personal Psychology. You can read the article, it’s called ‘The best and the rest: Revisiting the norm’. And this study found that individual performance was not evenly distributed. In other words, it follows a Paretian or power law.
And, what does this mean? It means that a small percentage of employees contribute a disproportional amount of output.
This is not a piece of anecdotal evidence. The study examined 633,263 researchers, entertainers, politicians and athletes. And these participants represented 198 work groups or units. So, it was a large study, covering a large sample.
Conclusion? A small percentage of employees contributes a disproportional amount of output. And what it means is that organisations don’t need lots of people to be efficient, but a few superstars.
These so-called superstars performed at a much higher level which made them more attractive. So why these findings are significant? Attracting, retaining, and empowering these hyper-performers.. may become a matter of survival for companies.
But what if you are not a superstar? What if you can’t keep up with changing job demands? And, increasing stress that this causes? It’s a good question.
Part 2: ‘Smart’ technology is getting smarter
Talking about stress. What we are going to see in the next decade… is much more advanced robotics and AI. And this of course will widen the range of tasks and jobs that machines and AI can perform.
And what will be the impact? Worker displacement, and inequality coupled with increasing stress.
If you’ve ever bought products on Amazon or Netflix, your products were suggested to you by smart algorithms, right? You already know that. But it’s NOT the full story.
Today billions are spent on AI projects to develop human-level intelligence. In 2018 DARPA invested 2 billion to make machines think like humans. DARPA is Defence Advanced Research Project Agency.
So what? Imagine a super-intelligent computer that can understand and learn any intelligent tasks like you and me.
Today AI performs cognitive tasks that were once unique to humans. When human champions played the game of Chess, Scrabble and the Chinese game of Go with an AI, they wanted to test. They wanted to find out what AI was capable of. And, it defeated human champions.
Every day it costs technology less and less for AI to do the same task. So it’s getting smarter.
Today, smart or intelligent algorithms are able to drive cars and trucks. They can take food orders. They can sell food. They can cook. Teach. Tell doctors about symptoms and treatments for particular diseases such as cancer. AI can deliver packages, inspect offshore oil rigs, and even write political speeches.
So what’s your take on this? Will AI create more jobs than it destroys? The so-called “experts” tell us that it will. We’ll have more jobs, and companies will need to retrain their employees to work with AI. But what if they are wrong or they are not telling us the truth?
The cost of machine learning systems and AI technology is getting cheaper. Every day it costs less and less to train AI than ever before.
A recent report by ARK Invest found that AI training costs dropped 100-fold between 2017 and 2019. Every day AI is getting better at automating tasks that were done by humans before.
And this is what your employer won’t tell you about your job. They might know that the very AI technology that will replace you one day already exists. But it’s gonna take some time for the company to roll it out. In the meanwhile why rock the board worrying you?
Let’s suppose you want to gain new skills. And let’s suppose the company you’re working for wants to retrain you. Will you be open to learning technical skills like software development and automation? Or technology like Blockchain. Cybersecurity and Digital Marketing? The use of AI technology will become critical and essential for survival. And companies will be under pressure to recruit technical staff.
So, if you are working in a company, buckle up because it’s gonna get tougher. Non-competitive companies that don’t use AI will lose to those that do. And, nonproductive employees and non-technical employees will be replaced or made redundant.
Part 3: To be or not to be an entrepreneur
What many people don’t realise the coronavirus pandemic has accelerated the speed of technological adoption by years. Whilst we were locked down and fed horror stories on the TV of people dying, across cities there was widespread instalments of 5G technology. Many people are still unaware of the consequences of the events that took place in the last couple of years.
And, yes sceptics will say that many companies are only employing ‘narrow’ AI systems. And that these narrow AI systems are nowhere near their full potential yet. But AI-based algorithms that are trained on Big Data can lower the marginal costs of companies to zero. If this is achieved, there will be dire consequences. And, not just for people living in poorer countries, but also for people working in Western organisations. A large chunk of work will be carried out by robots and intelligent AI.
In 2017 Udemy investigated the workplace stress levels of US workers. It found that employees in America were feeling more stressed than ever before. The main stress trigger was the fear of losing their job to AI technology. Other top-ranking stressors included the need to master new skills to keep up with changing job demands – 52% of people surveyed. 42% felt stressed because they were under-skilled for the job.
Jobs are designed to keep us busy and provide a false sense of security till the point when we lose our job. And one of the main threats I see today is automation. So that’s why learning entrepreneurial skills might become of use should you ever lose your job to automation.
So let’s recap 3 points that we’ve covered about why you need to consider starting a business.
1) Your job is not guaranteed. Automation and the use of AI mean companies become more selective in hiring their staff. Increasing stress and the need to keep up with changing job demands, means you need to be agile and resilient to keep your job.
2) ‘Smart’ technology is getting smarter.To be competitive companies need to deploy AI which is getting better at doing human-level tasks.
3) Starting a business today may give you a sense of control over your future.
And if you are looking for a way to start a business online, check out this all-in-one business. And of course, connect with me on LinkedIn or other channels. To your success!