Transcripts For BLOOMBERG Bloomberg Technology 20161203 : vi

BLOOMBERG Bloomberg Technology December 3, 2016

A court to dismiss Green Party Candidate jill steins request for a recount. Mr. Trumps Transition Team has released a list of World Leaders who spoke to the president elect today. Singapores Prime Minister called trump to give his congratulations. The philippine president also called. The president of taiwan and afghanistan are also said to have spoken to trump today. Global news, 24 hours a day, in more than 120 countries. This is bloomberg. Bloomberg technology is next. Im emily chang. This is Bloomberg Technology. Coming up, u. S. Unemployment hits a nineyear low. But jobs are still under threat from the rise of a. I. And automation will be a deep dive, on what kind and how many. Plus, news breaking of another highprofile attack in saudi arabia. Will the Incoming Trump administration be able to effectively fight cyber warfare . And twitter hiring yet another head of product, well recap the top stories that caught our eye this week. First, a mixed picture in the u. S. Jobs report. Employers added more workers to their payrolls and the Unemployment Rate tumbled to a nineyear low, 4. 6 . 4,000 manufacturing jobs were also lost. Earnings fell a tenth of a percent, and the Participation Rate continues to hover near the lowest level since 1978. Its a kind of weakness that frustrated the middle class and that president elect capitalized on throughout the campaign. Were gonna bring back our jobs to pennsylvania. [cheering] were gonna bring back our jobs to the United States. Your car industry is being sucked away from michigan. Its happening. If im elected, you wont lose one plant. I will be the greatest jobs president that god ever created but while trump blames trade, others blame robots and say the rise of automation is really whats causing the decline in manufacturing jobs. So we want to know, how big a bite is automation taking out of the u. S. Workforce and what do we do about it . Joining us now for two visions of the future, tom, author of the book only humans need apply and martin ford, author of the book rise of the robots. Gentlemen, thank you for joining us. This is not a new concern. Human jobs have survived multiple technological revolutions. Martin, ill start with you. What makes this one any different . Well, i think the biggest thing thats different is the robots, sort of machines, the algorithms are, in a limited sense, beginning to think. Theyre taking on brainpower, cognitive capabilities. So its not just about muscle power or manipulative type jobs anymore. Its becoming intellectual work as well. Thats going to have a much more broadbased impact, going to scale across not just manufacturing but a lot of white collar jobs. A lot of jobs in the service sector. Now, tom, you have a more positive view in that humans plus machines equals the best case scenario. But what incentive is there for a company like ford or carrier, the air Conditioning Company that has been such a hot button issue, what is the incentive for them to add automation at this point rather than keeping the jobs they have . Well, you know, pure automation is basically a pain for us in many ways. We often try to escape it whenever we can. We get an Interactive Voice Response system and we yell, agent and press zero as quickly as we can. So i think most organizations will benefit more from an overall strategy of augmentation, you know, smart humans working alongside smart machines. I dont deny that there will probably be some job loss on the margins. But im not quite as pessimistic as martin is about how many and how quickly. So, martin, lets talk about how many and what kind of jobs youre seeing disappear and when. Well, the basic rule is that any job that is on some level routine and predictable if youre coming to work, doing the same kinds of things over and over again, facing the same kinds of challenges, if another person could study a record of everything youve done in the past and based on that, figure out how to do that job, then that job is going to be susceptible to machine learning, artificial intelligence, robotics. No one knows for sure when this is going to be a big impact but i would estimate within the next 10, 20 years, this is going to be perhaps quite disruptive. I think there are other people who have looked at this and come to a similar kind of conclusion. Theres a very famous study done by researchers at oxford that came to the conclusion that about half the jobs in the u. S. Could potentially be automated within about 20 years. Thats just a very rough estimate but it gives you an idea of the magnitude of this. So, tom, when you look at some of the statistics, it costs much less than a robot to do the same job as a human. You can get the same amount of manufacturing output for far fewer jobs today than you could a couple of decades ago. What makes you so optimistic . Manufacturing jobs have been in decline now for decades. They have. I think its likely that there will be some return of those manufacturing businesses to the u. S. Not a huge amount of jobs, i agree. But for centuries, you know, when we automated farms and factories, producing textiles in the 19th century, there were always jobs for people who understood how the machines work, how do you configure them, how do you fix them, improve them, and i think that will continue to be the case. We dont know exactly how many jobs will go away when, as martin suggests, but if you look at the number of bank tellers, there are just as many bank tellers now as we had in 1980, despite a. T. M. s and despite online banking. We still have the same number roughly. So this is a slow process. We humans often find other things to do. What kind of manufacturing jobs do you think could actually come back to the United States . We know that a deal has been done with carrier to keep 1,000 or so jobs in the United States. But it seems like these situations are going to be more oneoffs. And you have folks out there saying, manufacturing jobs are never coming back to the u. S. Anytime soon. Apple is never gonna manufacture their phones in the United States. And even if they did, the process would be highly automated. Well, it would be highly automated. But there will be jobs, working on those robots, repairing them, configuring them in the first place to do the work. So its not going to occupy 300 Million People in the United States. But if youre assiduous about learning about these technologies and how you can add value to them, i think youll be fine. So, martin, you think that a fullon worker revolt is on the horizon . I wonder, are some of the frustrations we saw that trump tapped into, the angst of the middle class, is that a sign that what you believe will happen is in the process of happening . Yeah, absolutely. I believe that its maybe kind of the leading edge of the disruption thats coming. I think that the people that voted for trump and were enthusiastic about that, they would be much more likely to vote to global trade or immigration. They may not understand the technology is already playing a huge role in the situation theyre in. But really, technology has been the primary culprit in destroying good, solid middle class jobs chg and instead, what were seeing is the generation of fastfood jobs and jobs at walmart, things like that. Technology is one of the leading forces causing that to happen. Its going to accelerate, become a much bigger issue in the future. I think it will lead to absolutely to political, maybe even social upheaval, if we dont figure out a way to adapt to that. Heres a question id like to ask both of you. Tom, ill start with you. If youre in high school today, what do you tell this high schooler to study to pursue . Is it Computer Science or bust . Tom . Well, i think everybody in high school and college should be making a choice between one of two basic directions. One, do you want to work with computers all day . You know, work alongside them as a colleague basically . Or do you not want to work with technology at all . I think there will be jobs for people who want to kind of step aside from these technologies and do work thats highly creative and empathetic and totally unstructured. But most of the jobs in our society, i think, will involve working closely with technology. So thats probably the better bet, if you can tolerate working that closely with smart machines. So, martin, what would you tell a High School Senior right now . One of the paradoxes of this is that people always think, if you work with computers or youre working with information, that thats going to make you safer. Actually, the reverse can be true, because a lot of those white collar jobs, information based jobs, are easier to automate. That will, at one point, include computer programming. The safer areas are going to be Skilled Trades jobs, electricians, plumbers. Its still Science Fiction to be able to build a robot that can do what an electrician, an auto mechanic, a nurse, for example. Those jobs require a lot of mobility, dexterity, problem solving, interaction with people. Then on the more skilled educationdriven side, you really want to be doing something creative, building something new, as opposed to doing something routine or you want to have that deep kind of interaction with other people, maybe with a patient in health care or maybe with a businesstype relationship, you know, if youre in the commercial sphere. But you need something thats not routine and predictable and repetitive. Interesting. All right, martin ford, tom davenport, author of only humans need apply. This is going to be a great debate over the years. Another story, the statesponsored hackers who unleashed a digital bomb over the last two weeks have damaged Computer Systems at the saudi central bank. The attack targeted at least six Government Entities with malware linked to iran. Hackers have stolen more than 30 million from accounts there and other russian banks. Russia is accusing foreign spy agencies of trying to undermine its banking system. Coming up, what will president elect trumps pick for defense secretary bring to the table on Cyber Security . Lets turn to politics now. President elect donald trump announcing that hes picked retired marine corps general james mattis. Mattis has extensive military experience. What does trumps choice mean for the many Cyber Security threats around the globe . Kevin joins us by phone. Starts start with general mattiss reputation, when it comes to issues like security and Cyber Security in particular. What do we know about some of his views on these issues . Well, he is someone who has spoken about these issues for quite some time, even during his tenure in the obama administration. He is someone who has raised the issue of cyber threats, as far back as 2009, publicly, and perhaps further. But Cyber Security is something that president elect trump has outlined to be one of his Top Priorities within the first 100 days in his administration. So this is something i would expect both of them to work on in the new administration. He was very recently in active duty, unusual nor a defense secretary. Normally theres a desire to have someone who has spent more time in civilian life at the top, so there can be a balance of power between them and the military. How do you think this will impact his view on warfare and cyber warfare, technology on the ground, given that hes experienced this so recently . The sources that i speak with inside of the trump Transition Team tell me that they viewed his recent military experience as an asset, and part of the reason why president elect chose him for this position, they think that his frequency with the latest National Security risks, including Cyber Security, are part of the reason that they wanted to choose him. So they view that as an asset. But you are right. It is a bit rare. Now, statesponsored hackers have conducted a series of attacks on saudi arabia over the last couple of weeks. Is this something we can expect president elect trump or mattis himself to comment on . We havent seen much of the Transition Office weighing in on issues of the day. We did just we hear that president elect trump did reach out to the taiwan government, which is incredibly rare. We havent heard much from them. But i would expect them to weigh in on those types offishes after inauguration types of issues after inauguration. What are we expecting through the weekend and into monday when it comes to additional cabinet appointments . Well, of course the big meeting for bloombergs audience is of course the goldman executive, gary cohn, hes going to be meeting with trump this weekend. The next big post is secretary of state. Obviously lots of rumors, everyone from mitt romney to senator bob corker, the republican from tennessee. Hell continue on his thank you tour. Yesterday we were with him in cincinnati. Hes headed to North Carolina on tuesday. All right. Kevin, our Bloomberg Politics reporter. Thanks so much for that update. Well check in with you again on monday. Pandora and sirius xm. Pandora shares surged on reports of a potential acquisition by the satellite radio provider. Sirius chairman approached pandoras board to express renewed interest in taking over the company. Siriuss latest approach didnt include an offer price, but sirius did offer pandora. Pandora is said not to have responded to siriuss latest offer yet. This weekend, a russian billionaire joins bloomberg for the Award Ceremony in silicon valley. We will bring you that interview, sunday evening in new york, 9 45 a. M. Monday morning in hong kong. Russian intelligence officials did more than just hack and leak documents during the u. S. President ial election. They also played an active role on social media to influence perceptions about the race. So says the Cyber Security firearm fire eye. The company says materials stolen by russian intelligence were promoted by fake online accounts and personas. Joining us is the director of threat intelligence. Laura, what exactly did you learn about the social media propaganda part of this operation and how it worked . Yes. Thanks. So the social media aspect that weve seen over the summer in particular is just one of the multipronged approaches that weve seen russia engage in over time in what they would Call Information warfare. What weve seen, like this group, is that these personas are adopted and appropriated from reallife type of groups. Then the message they spread is much aligned to what russia looks to do in their foreign policy. So were they trying to convince people to change their votes, or just reinforce anticlinton views . So this is far more indirect. A lot of what we see is the types of personas, and a lot of this happens on twitter, that engage in this to and fro with journalists, is about spreading a particular message. For instance, information about the syria conflict, natoukraine topic, the u. S. President ial elections, particular angles of a tweet will be sent to key influencers. Then the message will get amplified by the network of how many different users that individual or group is connected to. What happens is the message, and in this case over the summer, one that promoted a lot of the trump discussion or promoted the actual emails, and the d. N. C. Hack, that would be the core piece that these groups would be pushing in the way that they spread their message out to key influencers. Now, your chairman talked about this as a sort of dawning of russia as a cyber power, unlike anything weve seen before. Russia, of course, has completely denied connection to any of this. How confident are you or how were you able to prove that russian intelligence is indeed behind this . Well, so this is a sustained campaign that weve seen for years. Whats really different about this summer is the groups that weve long tracked, the russian government or believe to be sponsored by the russian government, exhibit a couple different qualities. One is that the tools they use have been written in the time zone, written in russian. They have the evidence of tools that are built to last. Malware that gets in the system, that can be changed over time, someone who is really practiced and sophisticated behind the build on these. Add a couple other key elements, like the types of targets these groups go after and we start to see a pattern emerge, over seven, eight, nine, ten years for how these groups have perpetrated activity aligned to russia. This summer is different, because were now seeing activity directed to the u. S. In this case, directed specifically at, how do you get at questioning one of the core u. S. Institutions, voting . And that your vote matters . Thats been very much the focus from the groups weve tracked over time. Now, theres also been allegations within the United States from computer scientists that the election itself, the results show the potential that they may have been hacked. They dont necessarily believe they were, but that at least they should be verified. Have you found any evidence that the Election Results themselves were hacked . We dont have instances where weve seen that. That ill leave to the Election Officials and also to others who have direct evidence. Thats really whats key here. We need to see direct evidence of that, through a Network Investigation or through the people looking at that network. From our side, we havent seen evidence of widespread tampering or hacking of the election. What we have seen is this influence campaign over time that we think is the work of groups that would be working on behalf of the russian government. Now,

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