The world is going to

university
But is it worth it?
The world is going to AFTER God had carried us safe to New England,
and we had builded our houses, provided
university necessaries for our livelihood, reared convenient
places for Gods worship and settled Civil
But is it worth it?
Government, one of the next things we longed for
and looked for was to advance learning and
perpetuate it to posterity. So ran the first
university fundraising brochure, sent from
Harvard College to England in 1643 to drum up
cash.

Americas early and lasting enthusiasm for higher

education has given it the biggest and best-
funded system in the world. Hardly surprising,
then, that other countries are emulating its model
as they send ever more of their school-leavers to
get a university education. But, as our special
report argues, just as Americas system is
spreading, there are growing concerns about
whether it is really worth the vast sums spent on
it.
 a requirement for a decent job and an entry ticket rising. OECD countries spend 1.6% of GDP on
University enrolment is growing to the middle class. higher education, compared with 1.3% in 2000.
faster even than demand for that
ultimate consumer good, the car
There are, broadly, two ways of satisfying this
"OECD countries spend
huge demand. One is the continental European
approach of state funding and provision, in which
1.6% of GDP on higher
The Economist
most institutions have equal resources and status. education, compared with
The second is the more market-based American 1.3% in 2000"
The modern research university, a marriage of the model, of mixed private-public funding and
Oxbridge college and the German research provision, with brilliant, well-funded institutions If the American model continues to spread, that
institute, was invented in America, and has at the top and poorer ones at the bottom. share will rise further. America spends 2.7% of its
become the gold standard for the world. Mass GDP on higher education.
The world is moving in the American direction.
higher education started in America in the 19th
More universities in more countries are charging If America were getting its moneys worth from
century, spread to Europe and East Asia in the
students tuition fees. And as politicians realise higher education, that would be fine. On the
20th and is now happening pretty much
that the knowledge economy requires top-flight research side, it probably is. In 2014, 19 of the 20
everywhere except sub-Saharan Africa. The global
research, public resources are being focused on a universities in the world that produced the most
tertiary-enrolment ratiothe share of the
few privileged institutions and the competition to highly cited research papers were American. But
student-age population at universitywent up
create world-class universities is intensifying. on the educational side, the picture is less clear.
from 14% to 32% in the two decades to 2012; in
American graduates score poorly in international
that time, the number of countries with a ratio of In some ways, that is excellent. The best
numeracy and literacy rankings, and are slipping.
more than half rose from five to 54. University universities are responsible for many of the
In a recent study of academic achievement, 45%
enrolment is growing faster even than demand for discoveries that have made the world a safer,
of American students made no gains in their first
that ultimate consumer good, the car. The hunger richer and more interesting place. But costs are
two years of university. Meanwhile, tuition fees
for degrees is understandable: these days they are
have nearly doubled, in real terms, in 20 years. that the market for higher education, like that for
Student debt, at nearly $1.2 trillion, has health care, does not work well. The government
surpassed credit-card debt and car loans. rewards universities for research, so that is what
professors concentrate on. Students are looking
None of this means that going to university is a
for a degree from an institution that will impress
bad investment for a student. A bachelors degree
employers; employers are interested primarily in
in America still yields, on average, a 15% return.
the selectivity of the institution a candidate has
But it is less clear whether the growing
attended. Since the value of a degree from a
investment in tertiary education makes sense for
selective institution depends on its scarcity, good
society as a whole. If graduates earn more than
universities have little incentive to produce more
non-graduates because their studies have made
graduates. And, in the absence of a clear measure
them more productive, then university education
of educational output, price becomes a proxy for
will boost economic growth and society should
quality. By charging more, good universities gain
want more of it. Yet poor student scores suggest
both revenue and prestige.
otherwise. So, too, does the testimony of
employers. A recent study of recruitment by
professional-services firms found that they took
graduates from the most prestigious universities
not because of what the candidates might have
learned but because of those institutions tough
selection procedures. In short, students could be
paying vast sums merely to go through a very
elaborate sorting mechanism. If Americas universities are indeed poor value for
money, why might that be? The main reason is
Whats it worth? should know. More generally, universities should of their universities will help them in the market
More information would make the higher- be able to show that they have taught their for international students; rich countries, which
education market work better. Common tests, students to think critically. have more to lose and less to gain, are not.
which students would sit alongside their final Without funding and participation from them, the
effort will remain grounded.
exams, could provide a comparable measure of Some governments and
universities educational performance. Students
institutions are trying to shed Governments need to get behind these efforts.
would have a better idea of what was taught well
where, and employers of how much job candidates
light on educational outcomes Americas market-based system of well-funded,
highly differentiated universities can be of huge
had learned. Resources would flow towards
The Economist benefit to society if students learn the right stuff.
universities that were providing value for money
If not, a great deal of money will be wasted.
and away from those that were not. Institutions
would have an incentive to improve teaching and Some governments and institutions are trying to
use technology to cut costs. Online courses, shed light on educational outcomes. A few
which have so far failed to realise their promise of American state-university systems already
revolutionising higher education, would begin to administer a common test to graduates. Testing is
make a bigger impact. The government would spreading in Latin America. Most important, the
have a better idea of whether society should be OECD, whose PISA assessments of secondary
investing more or less in higher education. education gave governments a jolt, is also having
a go. It wants to test subject-knowledge and
Sceptics argue that university education is too
reasoning ability, starting with economics and
complex to be measured in this way. Certainly,
engineering, and marking institutions as well as
testing 22-year-olds is harder than testing
countries. Asian governments are keen, partly
12-year-olds. Yet many disciplines contain a core
because they believe that a measure of the quality
of material that all graduates in that subject
Million-dollar babies
As Silicon Valley fights for talent, universities struggle
to hold on to their stars
Million-dollar babies THAT a computer program can repeatedly beat the
world champion at Go, a complex board game, is a
departments of robotics and machine learning
(where computers learn from data themselves)
As Silicon Valley fights for talent, coup for the fast-moving field of artificial for the highest-flying faculty and students, luring
universities struggle to hold on to their intelligence (AI). Another high-stakes game, them with big salaries similar to those fetched by
stars however, is taking place behind the scenes, as professional athletes.
firms compete to hire the smartest AI experts.
Last year Uber, a taxi-hailing firm, recruited 40 of
Technology giants, including Google, Facebook,
the 140 staff of the National Robotics Engineering
Microsoft and Baidu, are racing to expand their AI
Centre at Carnegie Mellon University, and set up a
activities. Last year they spent some $8.5 billion
unit to work on self-driving cars. That drew
on deals, says Quid, a data firm. That was four
headlines because Uber had earlier promised to
times more than in 2010.
fund research at the centre before deciding
instead to peel off its staff. Other firms seek
In the past universities employed talent more quietly but just as doggedly. The
the world's best AI experts. Now migration to the private sector startles many
tech firms are plundering academics. I cannot even hold onto my grad
departments of robotics and students, says Pedro Domingos, a professor at
the University of Washington who specialises in
machine learning
machine learning and has himself had job offers
from tech firms. Companies are trying to hire
The Economist
them away before they graduate.

Experts in machine learning are most in demand.

In the past universities employed the worlds best
Big tech firms use it in many activities, from basic
AI experts. Now tech firms are plundering
tasks such as spam-filtering and better targeting No reliable statistics exist to show how many academic from New York University, Yann LeCun,
of online advertisements, to futuristic endeavours academics are joining tech companies. But to run it.
such as self-driving cars or scanning images to indications exist. In the field of deep learning,
The firms offer academics the chance to see their
identify disease. As tech giants work on features where computers draw insights from large data
ideas reach markets quickly, which many like.
such as virtual personal-assistant technology, to sets using methods similar to a human brains
Private-sector jobs can also free academics from
help users organise their lives, or tools to make it neural networks, the share of papers written by
the uncertainty of securing research grants.
easier to search through photographs, they rely authors with some corporate affiliation is up
Andrew Ng, who leads AI research for the Chinese
on advances in machine learning. sharply.
internet giant Baidu and used to teach full-time

"No reliable statistics exist Tech firms have not always lavished such at Stanford, says tech firms offer two especially
attention and resources on AI experts. The field appealing things: lots of computing power and
to show how many was largely ignored and underfunded during the large data sets. Both are essential for modern
academics are joining tech AI winter of the 1980s and 1990s, when machine learning.
companies. But indications fashionable approaches to AI failed to match their
All that is to the good, but the hiring spree could
early promise. The present machine-learning
exist" boom began in earnest when Google started doing
also impose costs. One is that universities, unable
to offer competitive salaries, will be damaged if
deals focused on AI. In 2014, for example, it
Tech firms investment in this area helps to too many bright minds are either lured away
bought DeepMind, the startup behind the
explain how a once-arcane academic gathering, permanently or distracted from the lecture hall by
computers victory in Go, from researchers in
the Conference on Neural Information Processing commitments to tech firms. Whole countries could
London. The price was rumoured to be around
Systems, held each December in Canada, has suffer, too. Most big tech firms have their
$600m. Around then Facebook, which also
become the Davos of AI. Participants go to learn, headquarters in America; places like Canada,
reportedly hoped to buy DeepMind, started a lab
be seen and get courted by bosses looking for whose universities have been at the forefront of
focused on artificial intelligence and hired an
talent. Attendance has tripled since 2010, AI development, could see little benefit if their
reaching 3,800 last year.
brightest staff disappear to firms over the border, to pledge in December to spend over $1 billion on academic research, sharing ideas openly or
says Ajay Agrawal, a professor at the University of a not-for-profit initiative, OpenAI, which will working on projects with decades-long time
Toronto. make its research public. It is supposed to horizons, future breakthroughs could also be
combine the research focus of a university with a stunted.
Another risk is if expertise in AI is concentrated
companys real-world aspirations. It hopes to
disproportionately in a few firms. Tech companies But such risks will not necessarily materialise. The
attract researchers to produce original findings
make public some of their research through open extra money on offer in AI has excited new
and papers.
sourcing. They also promise employees that they students to enter the field. And tech firms could
can write papers. In practice, however, many help to do even more to develop and replace
profitable findings are not shared. Some worry The extra money on offer in AI talent, for example by endowing more
that Google, the leading firm in the field, could has excited new students to enter professorships and offering more grants to
establish something close to an intellectual the field researchers. Tech firms have the cash to do so,
monopoly. Anthony Goldbloom of Kaggle, which and the motivation. In Silicon Valley it is talent,
runs data-science competitions that have resulted The Economist not money, that is the scarcest resource.
in promising academics being hired by firms,
compares Googles pre-eminence in AI to the
concentration of talented scientists who laboured Whether tech firms, rather than universities, are
on the Manhattan Project, which produced best placed to deliver general progress in AI is up
Americas atom bomb. for debate. Andrew Moore, the dean of Carnegie
Mellon Universitys computer-science department,
Ready for the harvest? worries about the potential for a seed corn
The threat of any single firm having too much problem: that universities could one day lack
influence over the future of AI prompted several sufficient staff to produce future crops of
technology bosses, including Elon Musk of Tesla, researchers. As bad, with fewer people doing pure
Space Invaders
See how entrepreneurs are shaking up the future of
space travel
Space Invaders Space Invaders
Theres a new space race. In the Mojave desert.
Space Invaders follows entrepreneurs and young
dreamers as they scramble to get out into the
cosmos.
Flying into the future
How technology is changing the passenger cabin for
whatever class you fly
Flying into the future THE twinkling stars above the passengers
gradually fade away as the night sky lightens and As the airliner begins its descent
How technology is changing the the sun begins to rise. It is an illusion, as it has into New York, the ceiling and
passenger cabin for whatever class you long been daylight outside. But the projected walls turn transparent to provide
fly image has a purpose: gently to awaken those on a panoramic view of the
board and help their body clocks adjust to a new
Manhattan skyline
time zone. As the airliner begins its descent to
New York, the ceiling and walls turn transparent
The Economist
to provide a panoramic view of the Manhattan
skyline. And on lining up to a runway, the
aircrafts seats automatically change shape, This vision of what it will be like inside an airliner
becoming more upright and firm to provide of the future comes from Airbus. The European
additional support for the landing. Welcome to aerospace giant got its engineers to look at how
JFK airport, sometime in 2050. flying might evolve from the passengers
perspective. The fuselage has a bionic structure
constructed from composite materials which
mimic the bones of those masters of flight: birds.
The composition of bone consists of fibres, which
are light but also immensely strong when
arranged to carry tension where it is needed. The
structure saves space and also helps to reduce the
aircrafts weight, so it burns less fuel.
The upper part of the bionic cabin is covered with closer to production. How the experience of flying choice, air travellers always say they want more
what Airbus describes as a biopolymer will change depends, however, as much on the room and extra comfort, but are usually not
membrane, a sort of tough plastic coating which unforgiving economics of air travel as on the prepared to pay any more money for themor at
can be electronically controlled to turn opaque or imagination of the designers. least not a lot more. The emergence of various
transparent on command, thus eliminating the forms of a new airline class, often called
Producing the interior of an aircraft is a costly
need for conventional windows. This too helps to premium economy, is an answer. But there is a
businessnot least because in order to provide a
make the fuselage light and strong. widening gulf between the luxury of first and
distinctive product most airlines want something
business classes, and the austerity endured by hoi
The traditional rigid divisions into first, business different, so the insides are custom-built. As a
polloi at the back.
and economy classes have gone. This is thanks to result carriers will spend some $10 billion this
the transforming seats. Made from memory year, up by 5% from 2014, on cabin interiors for The differences are most apparent in the amount
materials which can morph into a different shape new and refurbished aircraft, estimates ICF of space a passenger gets. The seat pitch in
and then return to their initial form, they adapt to International, a consultancy based in Virginia. standard economy (measured as a point on one
the size of an individuals bodyand their travel Making that kind of expenditure pay depends on seat to the same point on the seat in front) is
budget. The more you pay, the more space and what flyers you have in mind. typically between 78cm (31 inches) and 82cm.
comfort the seat will provide. This would enable Spirit Airlines, a budget American carrier, has
airlines to configure seating according to "In the battle for trimmed the pitch of its standard-economy seats
demand. And that means there will no longer be passengers, the price of a to just 71cm. At the other end of the spectrum
any need to upgrade passengers from cattle class Abu Dhabis Etihad Airways is offering a nearly
if the rear is overbooked.
ticket is usually the most 12-square-metre three-room first-class suite with
important thing" a shower called The Residence on its Airbus
The technological elements that could make this
A380s. It comes complete with a private chef and
concept become reality can already be seen in In the battle for passengers, the price of the a butler trained at the Savoy Hotel in London.
new aircraft and in cabin designs that are much ticket is usually the most important thing. Given a
Turn left The result is that business seats are turning into the inboard seat left empty to flip over as a
It is in the business-class cabin that airlines are areas of personal accommodation. These spaces sleeping platform.
spending most heavily, however, because it is will get more sophisticated and specialised.
Another approach involves positioning seats at
more profitable for them. One seat manufacturer Teague, a Seattle company which has designed
various heights to gain space. Jacob-Innovations,
reckons that this year airlines will install in new interiors for all models of Boeings airliners,
a Massachusetts firm, has a design called StepSeat
and refurbished aircraft roughly 2,000 new seats worked with Nike, sleep experts and professional
that lifts every other seat about 18cm allowing
in first class, but 50 times as many in business. coaches to design a concept called the athletes
extra room for them to recline. A more radical
plane. It includes a training room and a sleeper
arrangement is a series of stacked cocoons called
pod to enhance relaxation. The effects of air
Business seats are turning into travel on the bodys natural rhythms means that
Air Lair (illustrated). It offers a third more
areas of personal accomodation athletes travelling over multiple time zones are
passenger capacity, says Adam White, head of
Factorydesign, its London creator. So far, airlines
statistically more likely to lose against a home
The Economist have tended to shun these so-called 3D-seating
team, says Teagues Devin Liddell.
set-ups because they think that some passengers,
Powerful computer-aided design and simulation for reasons of status, will not want to sit on
Business class has already changed a lot in recent provide designers with more ways to explore the different levels.
years. It can provide the same or a better level of clever engineering required to create as much
comfort than that available in the first-class cabin room as possible in a confined space. Paperclip "Developing and designing
less than a decade ago. For a start, if a business- Design, a Hong Kong company, has come up with a new business-class
class seat does not extend into a fully flat bed, the closest thing yet to a morphing seat. Called
the airlines offering is no longer even in the Butterfly, it is composed of units of double seats
sleeper-seat or pod can
game, says Blake Emery of Boeing, Americas with the aisle seat offset backwards. In premium take two years or more, and
biggest aircraft manufacturer. economy both seats would be used, but the cabin top-of-the-line models
could be upgraded quickly to business by having
might cost up to to a diamond. The fibres are woven together and named, cost Air Mediterrane nearly three times
arranged in position using detailed computerised as much as each aluminium one it replaced, but
$350,000" stress-analysis for maximum strength. The fibres this will be more than compensated for by fuel
are then embedded in a hard resin. Carbon savings. Expliseats lightest seat weighs just
Developing and designing a new business-class
technology is advancing rapidly, with even 3.9kg. Air Tahiti, which has also bought the
sleeper-seat or pod can take two years or more,
greater performance characteristics claimed for companys seats, reckons the weight savings will
and top-of-the-line models might cost up to
single-atom-thick layers of graphene. Such work allow some of its turboprop aircraft operating off
$350,000 each, once they are stuffed with
may well lead to the advanced composites needed short runways to carry 55 rather than 50
electronics. The price is partly explained by the
to make bionic fuselage structures. passengers, says Benjamin Saada, Expliseats co-
standard required to protect passengers from a
founder.
seat breaking in a crash. This was raised in 2009
turn right
by Americas Federal Aviation Administration from
withstanding a deceleration of nine times the
New lightweight technologies are also having an "Tallying the additional
force of gravity (9g) to 16g. Although this mean
impact in the back of the aircraft. Last year Air seats packed into all
Mediterrane, a French carrier, removed the 220
that seats and their fittings have to be made
economy seats in an Airbus A321it bought them
aircraft in its fleet,
stronger, the use of lightweight composite
for about $300,000 in 2006and replaced them Lufthansa gained the
materials, such as carbon fibre, allows thinner
seats to meet what has now become a global
with a new, lighter version. The skinny seat equivalent capacity of 12
standard.
(pictured) is made by a Paris startup called
Expliseat and weighs just 4.2kg (9.3lb) compared
new A320s"
Carbon fibre is already widely used to make with the 12kg seat it replaced, says Air That hints at how the space savings from thinner
aircraft fuselages and wings. It is stronger than Mediterranes Christophe Costes. seats are likely to be used in economy: not to
steel but lighter even than aluminium. That provide more legroom but instead to pack in an
Expliseats seat-frame is constructed of titanium
strength comes from the powerful links between extra row or two of seats. Some new aircraft will
and carbon fibre. The titanium seat, as it is
carbon atomssimilar to the toughness imparted
also have smaller lavatory cubicles as a result of crammed in like a sardine? Forget it. Safety of the aircraft-seating division of Recaro, a
more petite plumbing. All this helps seating certification for standing seats would, in any German firm, says that in 20 years the company
efficiency, the industrys euphemism for event, be highly improbable. has cut the overall weight of its seats by 20% on
density. Shrinking the seatback pocket and three separate occasions. Each kilo of weight shed
placing tray stowage higher on its seats has from an aircraft reduces its annual fuel bill by at
already helped Germanys Lufthansa increase
Technologies that reduce weight least $100, he adds.
seating on its Airbus A320 fleet from 150 to 168,
and therefore fuel consumption
says Samuel Engel of ICF International. Tallying should help lower fares Second, new designs may help address some of
the most common irritations of economy-class
the additional seats packed into all aircraft in its
The Economist travel. Having a passenger drop his seat
fleet, Lufthansa gained the equivalent capacity of
backwards into another passengers space is a
12 new A320s, he adds.
great cause of angst. (Hence the brisk sales of a
It could be worse. Some carriers have flirted with If more space in the economy cabin is unlikely, $22 gizmo called the Knee Defender, now banned
standing room. Spring Air, a Chinese budget passengers on all budgets will see some benefits by some airlines, which attaches to a tray strut
carrier, has proposed installing such a scheme to from the changes to cabins. First, technologies and prevents the seat in front from reclining.)
increase capacity on its aircraft by 40%. In 2012 that reduce weight and therefore fuel James Lee, the boss of Hong Kongs Paperclip
Michael OLeary, never one to miss making consumption should help to lower fares further. Design, has come up with a fixed-position seat in
headlines, promoted the idea of a padded Even the padding in the seat cushions is changing which the back cushion can be lifted forward from
backrest for standing passengers on Ryanair, the with improved materials. New types of foam and the bottom and kept inclined by stuffing a
Irish discount carrier which he runs. Aviointeriors, fire-resistant coverings have been developed to briefcase or jacket behind it. This anti-
an Italian seatmaker, produced a downward- produce lighter cushioning. This has resulted in a technology seat, adds Mr Lee, has the benefit of
sloped perch called Skyrider but got no takers. fall in the weight of a typical seats cushioning doing away with a reclining mechanism.
Public reaction, says Ermanno De Vecchi, the from 1.8kg a decade ago to less than half a kilo Expliseats titanium seat also remains upright.
firms boss, was, in essence, sitting on a saddle now, according to Aviointeriors. Mark Hiller, head
Elbows at war for dinner, says Jared Shoemaker, head of cabin higher level, closer to what it is on the ground.
Another annoyance is the battle over a shared technology. A Boeing team of engineers, The 787 also pumps air into the cabin electrically
armrest. But Mr Lee has an answer for that, too. psychologists and marketing people are also rather than having it bled from the compressors in
He has patented a design with two flat surfaces at concocting LED-lighting schemes to make cabins the jet engines, which risks fumes entering.
different heights, providing room for two elbows appear roomierto essentially distract people
from the discomfort of a tight squeeze, says The goggle box
(pictured). Having knees pushed into passengers
backs is a further frustration. Expliseat embeds a Boeings Mr Emery. Accentuating ceiling curves Augmented reality might help ease the journey,
taut sheet of a secret polymer into the rear with sky-blue light generates a sense of space too. Epson, a Japanese electronics firm, has
cushion to absorb the shocks of impacting knees. expanding above and bathing vertical surfaces in created goggles, called Moverio BT-200, which
The material is lighter and softer on the kneecaps white light creates an illusion of greater width. project images onto a lens that appears to be a
than the rigid plastic shields which are sometimes screen five metres away. Some of the first versions
When Boeings 787 was introduced in 2011 it
used, adds Mr Saada. Teagues Mr Liddell says one are being tested by a South Korean airline. The
pioneered a number of enhancements. The aircraft
area where more innovation is needed is to make goggles could be used to watch films, which in
is fitted with large electrochromic windows that
the dreaded middle seat more invitingespecially the future are likely to be beamed wirelessly
trap a thin gel between two panes of glass. An
in economy. At the moment, he adds, for around the aircrafts cabin, eliminating the need
electrical current is applied to darken the gel,
passengers the middle seat is your sentence for for lots of bulky in-flight entertainment
allowing passengers to choose from five
waiting too long to book. equipment.
transparency settings. The 787 also improves the
The third improvement is likely to be the air in the cabin. Airlines have long kept air dry Video screens made from thin films could be used
ambience of the cabin. BAE Systems, a British because humidity corrodes metals. But that is less on the back of skinny seats and placed on cabin
firm, recently made its first sale of a set-up called of a problem with the 787s largely carbon-fibre walls to provide an enhanced view of the outside
IntelliCabin that features LED lighting designed fuselage. This means the air can be more moist. and, eventually, as a replacement for windows.
to induce calm, improve sleep and charm flyers And because carbon fibre is stronger than The view would be relayed to the screen by
with illumination schemes like an artificial sunset aluminium, cabin pressure can be maintained at a exterior cameras.
The Centre for Process Innovation, a British
technology group, is exploring the use of organic
light-emitting diodes (OLEDs) to make the thin-
film screens. OLEDS use a luminescent layer of
organic compounds to emit light in response to an
electric current. Matthew Herbert, a manager at
the centre, says that in less than a decade
production technology will be inexpensive
enough to mass-manufacture flexible OLED
displays for use in aircraft. Using such screens
instead of windows would reduce weight and
improve the strength of the fuselage. One
company, Spike Aerospace of Boston, is proposing
to replace windows with screens in a supersonic
executive jet. Step by step, the vision of that New
York-bound flight in 2050 is moving closer to
reality.
Robots v humans
Will your career be vulnerable to automation?
Machine earning BILL BURR, an American entertainer, was
dismayed when he first came across an automated
Jobs in poor countries may be especially checkout. I thought I was a comedian; evidently
vulnerable to automation I also work in a grocery store, he complained. I
cant believe I forgot my apron. Those whose jobs
are at risk of being displaced by machines are no
less grumpy. A study published in 2013 by Carl
Benedikt Frey and Michael Osborne of Oxford
University stoked anxieties when it found that
47% of jobs in America were vulnerable to
automation. Machines are mastering ever more
intricate tasks, such as translating texts or
diagnosing illnesses. Robots are also becoming
capable of manual labour that hitherto could be
carried out only by dexterous humans.
 of a lure to manufacturers. An investment in The cheapness of labour in relation to capital
As many as 85% of jobs may be industrial robots can be repaid in less than two affects the rate of automation. Passing laws that
threatened by automation in years. This is a particular worry for the poor and make it less costly to hire and fire workers is likely
Ethiopia underemployed in Africa and India, where to slow its advance. Scale also matters: farms in
industrialisation has stalled at low levels of many poor countries are often too small to benefit
The Economist incomea phenomenon dubbed premature from machines that have been around for
deindustrialisation by Dani Rodrik of Harvard decades. Consumer preferences are a third barrier.
University. Mr Burr is hardly alone in hating automated
Yet America is the high ground when it comes to checkouts, which explains why 3m cashiers are
automation, according to a new report* from the "Rich countries have more still employed in America.
same pair along with other authors. The
of the sorts of jobs that are
proportion of threatened jobs is much greater in
poorer countries: 69% in India, 77% in China and
harder for machines to
as high as 85% in Ethiopia. There are two reasons. replicate"
First, jobs in such places are generally less skilled.
Second, there is less capital tied up in old ways of Rich countries have more of the sorts of jobs that
doing things. Driverless taxis might take off more are harder for machines to replicatethose that
quickly in a new city in China, for instance, than require original ideas (creating advertising), or
in an old one in Europe. complex social interactions (arguing a case in
court), or a blend of analysis and dexterity (open-
Attracting investment in labour-intensive heart surgery). But poorer countries are not
manufacturing has been a route to riches for powerless. Just because a job is deemed at risk
many developing countries, including China. But from automation, it does not necessarily mean it
having a surplus of cheap labour is becoming less will be replaced soon, notes Mr Frey.
Upward mobility
How the future of carmaking might change the way
you get to work
The future of CAR companies have long talked a good game
when it comes to harnessing technology that In the scramble to reinvent
carmaking threatens to undermine the business of making themselves, conventional
How the future of carmaking might
and selling vehicles. In the 1990s, as the dotcom carmakers have turned their
change the way you get to work
boom was in full swing, Jac Nasser, then boss of attention to ride-hailing apps
Ford, said that the new business models the
internet would enable meant that his firm would The Economist
outsource the dull task of assembling cars and
reinvent itself as a mobility company, selling
transport as a service. Mr Nasser was too early On May 24th both Toyota and Volkswagen
with this insight. Only now are most big carmakers announced tie-ups with taxi-hailing apps. The
teaming up with tech firms that offer transport Japanese firm has made a small, undisclosed
services, on the road to becoming mobility investment in Uber, the worlds biggest ride-
providers. But they in turn may have left it too hailing firm, with operations in over 70 countries.
late. In the scramble to reinvent themselves, VW announced an investment of $300m in Gett,
conventional carmakers have turned their an Israeli firm that is popular in Europe. Matthias
attention of late to ride-hailing apps. These Mller, VWs boss, has much bigger aspirations. He
services allow people to use smartphone apps to declared that the German carmaker aims to be a
summon a car and driver to ferry them to their world-leading mobility provider by 2025.
next destination.
VW will not lack for company. In January General
Motors invested $500m in Lyft, Ubers closest rival
in America, partly to embrace ride-hailing and
partly to share in the development of self-driving
robotaxis. Last year Mark Fields, the boss of Ford, while losing value. Membership of car clubs, manufacturing cars has kept new competitors
perhaps forgetting Mr Nassers earlier which let people book vehicles by app for short largely at bay. But simultaneously running a
pronouncement, said that henceforth his firm periods, is growing fast. ZipCar, the worlds service business that depends on constant
would be a mobility company as well as a largest, is owned by Avis Budget, a car-hire firm. engagement with customers and crunching large
carmaker. Rumours abound that Ford is planning More carmakers are copying Daimlers Car2Go and quantities of data is a far cry from designing a
its own ride-hailing app and a vehicle to go with BMWs Drive Now apps. Ford, for example, is new SUV. Indeed the flurry of investments by
itperhaps an on-demand minibus service. testing car-sharing services in America, Britain, carmakers has been driven as much by the desire
Germany and India. to learn how these new businesses work as for
"Though the latest immediate profits.
Car-sharing and ride-hailing schemes may
battleground is ride- eventually make carmakers money. For mass-
hailing, car companies market firms, used to slim margins, it might even Instead of owning a car, the
have their eyes on other prove a boon, though premium carmakers, used to future could include a monthly
ways of making money fatter profits, may not agree. Carmakers will not supscription to an app
only take a cut of the fares but will jostle to
from mobility" supply vehicles. Indeed Toyotas deal includes a The Economist
financing scheme for Uber drivers to acquire its
Though the latest battleground is ride-hailing, car cars. GM offers a similar scheme to help Lyfts
companies have their eyes on other ways of drivers get on the road. Second, big tech firms, adept at handling data
making money from mobility. People who might and selling services, cannot get too far ahead.
hitherto have wanted to own a car may no longer But their chances of profiting from usership rather Google leads the field in self-driving vehicles.
do so, preferring to pay to drive when they need than ownership depend on two things. First, Apple is rumoured to be planning to build its own
to. Young city-dwellers are turning their backs on carmakers need to change how they operate. car and recently invested in Didi Chuxing, Chinas
owning a costly asset that sits largely unused Mastering the complicated business of answer to Uber. A host of startups are plotting
ways to profit from offering services that will
move customers from A to B.

Instead of owning a car, the future could include

a monthly subscription to an app that combines
car-sharing, taxis, buses, trains, bicycles and
anything else on wheels, including on single
journeys where multiple modes of transport are
the quickest or cheapest option. More efficient
use of public transport, more car-sharing and
more ride-hailing will mean that people who
might have bought a car may no longer do so,
stifling the growth in vehicle sales that was
expected as the middle classes take to the roads
in developing countries. Carmakers face selling
fewer vehicles while freewheeling competitors,
unencumbered by a vast manufacturing business,
mop up the profits from selling transport to
customers on the move.
Liquid lunch
How a startup wants to change the way people
consume calories
Liquid lunch ONE should eat to live, not live to eat, wrote
Molire, the French comedic playwright. Some
break from work. Their bad diets can damage their
health. Several years ago Sam Altman, an
A startup called Soylent wants to change workaholic entrepreneurs have taken him at his entrepreneur who is now president of Y
the way people consume calories word. Soylent, a two-year-old startup, is trying to Combinator, a startup boot camp, was so cost-
save consumers time and money by selling them a conscious and focused on building his first
healthy, cheap meal that they can drink. Each company, Loopt, that for weeks he ate only ramen
vegetarian portion has only around 400 calories, noodles and coffee ice cream, until he developed
costs around $3 and boasts of being as nutritious scurvy. He later became an investor in Soylent. At
as, and more environmentally-friendly than, first the product was sold as a powder, but even
processed food and meat. that was a hassle for some consumers, so on
September 9th it started shipping version 2.0,
which comes already mixed and bottled.
Each vegetarian portion has only
around 400 calories and costs "Yucky-sounding
around $3
ingredients like algal oil
The Economist will put many off, as well
as reviews from early users
Soylent has found a place among American
that Soylent makes them
workaholics who resent the cost and hassle of gassy"
preparing regular meals. This is especially true in
Silicon Valley, home of many early-adopter The name Soylent is a tribute to a 1966 science-
engineers too consumed with coding the future to fiction novel, Make Room! Make Room!, set in
an overpopulated world where everyone eats a that Soylents neutral taste is the best way to
mixture of lentils and soy (and, in the film appeal to the broadest group of people. Just how
version, human flesh). Rob Rhinehart, the drinks big that group really is, however, remains to be
27-year-old creator, came up with the idea when seen.
he was working on a different startup, focused on
wireless internet. He was so poor that he started
mixing his own food, and later dropped the other
project to focus on food technology. He is, by any
measure, extreme. He considers shopping at
grocery stores, in the presence of rotting
produce, a multisensory living nightmare, and
no longer owns a fridge.

Soylent has proved that it can appeal to a niche,

as well as to a handful of financiers: in January
the firm raised $20m from investors, including
Andreessen Horowitz, a well-regarded venture-
capital firm. But it has plenty of obstacles to
overcome. Yucky-sounding ingredients like algal
oil (yes, derived from algae) will put many off, as
well as reviews from early users that Soylent
makes them gassy. I prefer my food with both
flavour and texture, says one young, vegetarian
entrepreneur who has tried it. Mr Rhinehart insists
Thank you for reading

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