Wednesday, October 4, 2017

Jobs displacement fact of the day

Mobile phone repair shops have been a sunrise micro-enterprise in developing countries. There are vocational training institutions which have started courses on mobile phone repairs. A not insignificant share of self-employment loans go to applicants seeking to establish mobile phone repair shops. 

We already have electronic repair shops that dot rural and urban areas in most developing countries. They provide employment to tens of millions of people. 

Now all of them may be coming under threat as companies seek to design products that make physical repairs increasingly difficult. A confluence of factors have come together. At one end, apart from physical design, the components are connected and controlled by software, making repairs very difficult. At the other end, firms seek to capture greater value from servicing the product, rather than lose out to outsiders. 

As The Economist writes, the trend which has covered consumer electronics to even toys, has triggered a "right to repair" movement in the US, with demands for regulation to force manufacturers to make their products more easily repairable. 
Some types of gear, such as photocopiers and medical equipment, have always been hard to mend because of their internal complexity. But what has been the exception is now becoming the rule... Even a John Deere tractor comes with millions of lines of software code, controlling everything from the engine to the armrests. Mobile devices, for their part, are getting ever more densely packed to make them smaller and able to accommodate new components...


Manufacturers are also increasingly erecting less tangible barriers to mending. Leased equipment and devices under warranty have always been out of bounds, but firms now regularly ban tinkering with a product’s software... Firms also withhold technical information, proprietary repair tools and spare parts... Not only do firms want customers to use authorised dealers, but a growing number of products are also no longer stand-alone devices, but rather delivery vehicles for services that generate additional revenues. Smart speakers such as Amazon’s Echo are a case in point. The e-commerce giant may even lose money with the device, but it helps to sell other products and collects reams of data about users. These can be used for additional services or to target advertising. Similarly, wearable technology such as fitness trackers would be much more expensive to consumers if manufacturers did not believe they could monetise the data they collect. If owners could easily tinker with such devices, that could sever the profitable links between product, service and data, which may make manufacturers’ guard them even more jealously.
Either ways, is this one more disturbing trend in the direction of displacing jobs?

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