London, November 23 (Business Insider): The CEO of a $1 billion (£810 million) Silicon Valley software company believes the world is approaching a tech-driven employment crisis that already contributed to Donald Trump’s surprise victory in the US presidential election.
“Technology is changing the workforce — it’s changing the employment market,” Tien Tzuo, the cofounder and CEO of Zuora, told Business Insider during a recent interview in London.
The World Economic Forum believes the world is undergoing a Fourth Industrial Revolution, driven by the rise of robotics and artificial intelligence that automate more and more jobs. The WEF estimates that these trends will destroy 5 million jobs by 2020.
Tzuo said: “There are less manufacturing jobs. You talk about the Fourth Industrial Revolution — that’s not letting up. It’s going to obsolete more and more jobs at a faster and faster pace. The workforce is not able to keep up with it in terms of the locations, the skills, and all these other issues.”
Some 57 % of all jobs in the OECD countries are at the risk of automation, according to a research conducted by Oxford University.The research also found that, unlike previous major advances in technology, computing advances are actually destroying more jobs than they create.
“If we don’t solve this,” Tzuo said, “there’s going to be a class of population that’s going to hold us back from moving towards the future — rightfully so, because society needs to deal with their issues.”
Tzuo isn’t the only one raising alarm about what technology is doing to employment. Lord Adair Turner, the former Vice Chairman of Merrill Lynch Europe and the ex-head of Britain’s financial watchdog, told Business Insider earlier this month that ” we may be at a turning point in the nature of capitalism because of the fundamental nature of technology.”
“It’s quite possible that 80% of the jobs that people do today won’t exist in the future.”
“You’re moving from a $50-an-hour manufacturing job because you’re in a union to a $12-an-hour job at Walmart or Starbucks that’s nonunion,” Tzuo said.
“It doesn’t work! People are blaming trade and immigration as a result, but it’s not that. Immigration is not taking away jobs. Trade in the US has actually shrunk over the last four or five years. When everything is a service, what is there to trade?” he asks.
On Trump voters, he said: “It’s not that these guys are all racists and sexists — sure there’s some fringe factor of that, but that’s not the core issue. The core issue is they need a future. Without a future, they lash out in different ways.”
But Tzuo added: “The trend towards globaliaation is inevitable. There might be some ups and downs, one step forward, two steps back, but it’s not like the pendulum is swinging permanently the other way. We’ve just got to work through some social issues.”
“I think as a society we’ve got to figure out how we should create jobs for people and if there literally are going to be fewer jobs, then how can we establish a minimum wage or basic income for folks. How exactly you do that depends on the society, the rules.”
The California-based Zuora provides businesses with software designed to allow them to easily accept subscriptions. Founded in 2007, the company has grown in line with the rise of the so-called on-demand economy — services like Uber and Deliveroo — subscription services such as Netflix, and the cloud-computing industry, which typically sees businesses and people rent software hosted in the cloud rather than buy it.
Zuora processes about $35 billion (£28.2 billion) worth of transactions for more than 800 customers around the world and employs 600 people globally. The company has raised over $240 million (£193.7 million) in funding to date and was valued at over $1 billion (£810 million) in its most recent funding round.
(The featured image at the top is that of Tien Tzuo, founder-CEO of the Silicon Valley company Zuora)