Dry Powder: The Private Equity Podcast Macro Update: The Expanding Frontiers of Automation
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Jan 14, 2025 Karen Harris, managing director of Bain's Macro Trends Group, shines a light on the surprising impact of automation across various sectors. She discusses how automation is transforming roles from strawberry-picking to brick-laying, while addressing the demographic challenges faced by aging workforces. Innovations in AI and robotics are seen as crucial in combating talent shortages, with both new job opportunities and potential displacements emerging. Harris maintains an optimistic outlook on the resilience of the economy, despite these rapid changes.
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Demographics and Automation
- The working-age population in many OECD countries has peaked, impacting the labor force.
- Automation combined with demographics determines an economy's productive capacity, even with declining human capacity.
Automation in Unexpected Sectors
- Automation is revolutionizing unexpected sectors like construction, with robots assisting masons.
- Restaurants use robots like Flippy for burgers and fries, and crop harvesting utilizes robots for delicate tasks like strawberry picking.
China's Automation Advantage
- Chinese manufacturers rapidly deploy automated plants with immense capacity, creating competitive pressure.
- This speed and automation give them a significant advantage over US and European counterparts.