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RFID’s Labor Pains
Oct 01, 2004—
I’ve never been a big believer that the use of new technology leads to an increase in unemployment, but I recognize that RFID represents the possibility of a new and unprecedented level of automation. Beyond being used to enable robots to replace manufacturing workers, RFID could be combined with intelligent agent-based software to automate many routine decision-making tasks that have been handled by white-collar workers.
Early signs indicate that companies are not looking at RFID as a way to slash their workforce. Wal-Mart’s main objective is to reduce the number of sales lost because a product isn’t on the shelf when a customer wants to buy it. Other retailers have the same goal. On the manufacturing side, companies believe RFID will help reduce shrinkage and cut inventories.
To accomplish these goals, companies are focusing on using RFID to gain better information. Our cover story looks at how BP, one of the world’s largest oil companies, has been testing sensor networks—battery-powered transceivers that are combined with sensors in wireless networks—to gather real-time information on not just the location but also the condition of supply chain assets. The technology can reduce the amount of labor needed for routine maintenance tasks, but the main reason for deploying it is to improve the company’s ability to assess risk and react more quickly to problems, such as an accident involving a railcar carrying chemicals (see “BP Eyes New Opportunities,” page 18).
Interestingly, best-selling author Michael Raynor never mentions labor-savings in his analysis of RFID as a sustaining or disruptive technology (see “RFID and Disruptive Innovation,” page 26). He sees RFID as either supporting a company’s strategy—such as Wal-Mart’s goal of providing everyday low prices—or undermining the strategy of established players.
Clearly, some menial jobs will be eliminated by RFID. In the short term, companies will need to consider whether to reduce their labor force or retrain workers. In the longer term, companies need to think about whether cutting staff reduces the number of people who can afford to buy their products (workers are consumers, after all). My guess is that RFID will create far more jobs than are lost, because increased efficiency leads to more wealth—both corporate and personal—not less. And in the end, more wealth means more jobs.
Founder and Editor
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