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January 28, 2014 at 13:51 PM EST
Robot Singularity
The United States is getting more educated and producing more stuff; at the same time, the number of factory jobs continues to decline in real and relative terms. The reason, of course, is automation

This Article Originally was Published here: http://www.wealthdaily.com/articles/robot-singularity/4991

Bloomberg Businessweek just put out this little graph showing manufacturing jobs are dead and gone...

factory-jobs

As you can see, despite the fact that the U.S. manufacturing sector continues to generate $1.8 trillion in GDP (2011), the jobs are decreasing.

Manufacturing makes up 12% of the U.S. economy and only 10% of the non-farm workforce. But get this — over the 22 years from 1980 to 2012, there was a 189% gain in manufacturing output. Furthermore, during the period from 1980 to 2012, the proportion of workers with some college education increased from 20% to 50%.

The United States is getting more educated and producing more stuff; at the same time, the number of factory jobs continues to decline in real and relative terms.

The reason, of course, is automation, computerization, artificial intelligence, technology, and robots.

Gung Ho

The trend isn't new. You may remember the bad Tom Hanks comedy about the Japanese taking over U.S. auto companies in the early 1980s. It wasn't funny because it was too close to the truth.

Now, a new paper recently discussed by The Economist claims half of American jobs can be automated. And don't think you'll be protected...

Lawyers are already getting hit hard. Thanks to advances in artificial intelligence, “e-discovery” software can analyze documents in a fraction of the time for a fraction of the cost. What used to cost $1.5 million to pay a team of lawyers now costs $100,000.

Bum, Get a Job

The word is out. Law school applications are declining by so much that 25% of schools have cut class sizes, and many are cutting tuition. Villanova University is giving away free tuition to 50 students this year.

Expect a host of other professions, like loan officers and tax accounting, to be hollowed out by software.

According to the New York Times:

Automation of higher-level jobs is accelerating because of progress in computer science and linguistics. Only recently have researchers been able to test and refine algorithms on vast data samples.
“The economic impact will be huge,” said Tom Mitchell, chairman of the machine learning department at Carnegie Mellon University in Pittsburgh. “We’re at the beginning of a 10-year period where we’re going to transition from computers that can’t understand language to a point where computers can understand quite a bit about language.”

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Google Buys AI

Our good friend Google Inc. (NASDAQ: GOOG) has bought up eight robot companies in the past year including the up-and-comer Boston Dynamics, the company that built the famed BigDog and Cheetah robots.

Sunday, Google announced it paid $400 million for an artificial intelligence firm called DeepMind. So far, Google hasn't expanded on this purchase, but it does underline the threat of the singularity...

Technological singularity is the moment when artificial intelligence has progressed to the point where it is greater than human intelligence.

At this point, AI will grow exponentially. We are talking an explosion of computer knowledge and intelligence similar to the Cambrian explosion in terms of animals on earth.

Futurist Ray Kurzweil has theorized this will happen in the next 30 years; some believe it will be sooner.

I don't know about all that... though I'm not sure what I could do about it if I did.

But I do know one thing. The pace of change is quickening. And as it speeds up, money will be made.

Select robot and AI stocks will launch much like early Internet or PC stocks.  Those of us who are old enough remember when those tech stocks went up hundreds of times over.

It is just the beginning.

All the best,

Christian DeHaemer Signature

Christian DeHaemer

follow basic@TheDailyHammer on Twitter

Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page.

This Article Originally was Published here: http://www.wealthdaily.com/articles/robot-singularity/4991



Robot Singularity originally appeared in Wealth Daily. Wealth Daily, a free daily newsletter, offers practical investment analysis and contrarian stock market advice.
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