Is HMRC next to be under attack from the Robots?

Computing 1950's style - when LEO roared

1 in 3 of the world's jobs set to disappear to automation in the next 12 years.

Is HMRC just another large organisation that sees the benefit of automation as a cost cutting and efficiency improving situation?

The 1950's spawned the first commercial venture into electronic computing, built on the secret WW2 work done at Bletchley Park and the pre-war GPO research at Dollis Hill around 1938 under Tommy Flowers and his colleagues, which in turn fuelled the Bletchley technologies under Alan Turing.

Although Bletchley Park's work was secret and not known about until the 1970's, the technology obviously was.

In America ENIAC was one of the first computers developed out of the wartime experience and companies like Westinghouse would be at the forefront there in developing this technology for business and military usage.

Back in Britain, Lyons Tea was bizarrely you may think, one of the first British companies to develop a computer for business use, called LEO.

LEO - The 'Lyons Electronic Office', was set up to micro manage all aspects of the business transaction - from soup to nuts or tea to cake if you like.

In the early 1950's, an 'outsourcing' experiment was conducted at Lyons by the Social Security department. They had the social security contributions data for all citizens that paid in, run for the next year as an exercise.

The LEO computer performed the millions of calculations faultlessly in less than a weekend. The same job done manually by hand, would have taken months. 

Just after WW2, the great cybernetician Norbert Wiener predicted the mass loss of jobs to computing and he was right.

A Taxing business

So, it is no surprise to hear that HMRC is looking to computerise much of its operations in tax analysis and collecting. This is a sensible move for two reasons, accuracy and volume.

The machine can apply many rules and if the programming is correct, then the results are accurate. Thus the machine can do the massive calculation work which computers are suited to and get it right.

We are moving towards a cashless society, the trend is towards card payments and cash has its place, but cash is certainly amongst younger people almost unused as the advent of contactless cards is here. We see high street banks closing as leases come up and efficiencies made and money deposited in hard cash falls.

For HMRC, this automation should free up 'real people' to talk to when you think things have gone wrong. It isn't necessarily going to be leading to mass loss of employment, with skill full handling and managed natural wastage along with early retirement packages, the transition could be made smoothly.

However, with 1 in 3 of the world's jobs going to computers in the next 12 years, will automation be used as another cost cutting measure? Or for HMRC, could it be intelligently used to restructure the organisation to make it fitter for the future?

Bitcoin here, Bitcoin there

The rise in technology bringing in the cashless society is also bringing in the rise of cyber currencies. Paypal was almost the model for this - a virtual bank on-line, but, criminals have got to see Paypal as a model for another banking operation, as they move into off-grid currencies and monetary transactions as Paypal scrutinises the data more.

Thus Bitcoin for all its independent from the mainstream attraction, now has become one of the new underground farms.

Bitcoin, started for altruistic reasons and as an alternative, has been added to the criminal's armoury for money acquisition and revenue detection and avoidance.

The bottom line is just that - and automation is one factor that cuts costs. And does.

The future of the retail and shop model for commerce

Your last 5 purchases likely involved no human contact

Think about the last 5 purchases you made. I reckon that maybe 4 out of 5 of those were done by an electronic payment and only one by cash and of those 5 experiences, 4 did not involved a human to human transaction.

The future retail and commerce model is changing to match the future of work model.

I recall seeing an ecommerce shop on-line, where I could save 10% if I bought on-line and not from speaking to a human. In a way this is worrying, it shows a model where humans form the back office and despatch feature and the computer has now taken over the shop front, taking the order and processing the payment, that's 2 human jobs gone out of the process.

Now that's maybe good for the profit line of the CEO, but not for the Admin staff who have now likely had to take a de-skilled job or work somewhere else in a shrinking labour market.

These displaced workers are a symptom of the 40% who will lose out to automation in the next 10 years.

Yes, 40% of jobs will be lost to automation in the next 10 years. So if you have transferable skills, you are lucky if not, learn some.

Although this situation is hitting the lower qualified workers, it is also hitting the middle and into the upper bracket job holders too, it is a creeping disease that is advancing almost unnoticed.

With a push towards a cashless, chequeless society, the world of commerce is moving to a situation of smart phone and contactless card payments. The pick and pack jobs are the only involvement your order has with a human and soon that will be a thing of the past too.

So what of the High Street? That is not immune either. But it is creating opportunities, Landlords need to fill vacant properties with businesses. Too many charity chops and coffee shops in a town start the rot. So some start-ups and pop-up shops are now the model.

But when the rot sets in on a small town High Street, the place gets a down at heel image and people decamp to bigger towns where there is more choice and you can actually buy what you want. And as the shops leave the failing town, the jobs do to.

The buying experience of a shop visit is a key factor in a business being successful. The chance to see, try and examine a product in real life is vital thing. The staff must have product knowledge.

Filling establishments with low-rent bits of kids who are busy checking social media every thirty seconds is not where an employer wants to be but often is because the employees are cheap and so is the service they might give.

Employing a 'least cost' option to the staffing problem of an institution is a sure fire way to ruin a business, with frequent staff turnover and low morale. If your staff can't be bothered then your customers will, they will go elsewhere.

But Amazon has challenged the model of High Street shopping. The new way is a see it, buy on line and return if it isn't for you. And you haven't had to waste time driving to a town, parking, looking at the product and then driving home. You've done it from your home in your time and saved time and money.

This model is now creating a new situation which is actually making jobs! Yes, the buy in different sizes fashion experience and return what doesn't fit method. Are people getting lazier or are there too many demands on them? A bit of both. But the repacking staff are at least getting a job out of it, even if it is at a borderline minimum wage.

What is the future of retail? I personally like to see the goods and talk about them but that seems to be going out of fashion these days. Also worth noting is whether the sales advisor actually knows about the products?

I have worked in retail on the shop floor and in an office selling over the phone, having product knowledge is vital. It shows your company is serious about what it is selling and not just interested in your money.

The on-line Amazon style model of trade is the new normal for most of us, buying and sometimes being pleasantly surprised with a good result. The future is going to be determined by what our expectations are in the future and what our lifestyle will be like.

The High Street is not quite dead yet, but it will change in the next ten years.