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http://nyti.ms/20WFZal

henDanielNadlerwokeonNov.6,hehadjustenoughtimetopour

himselfaglassoforangejuiceandopenhislaptopbeforetheBureauofLabor
Statisticsreleaseditsmonthlyemploymentreportat8:30a.m.Hesatatthe
kitchentableinhisonebedroomapartmentinChelsea,nervouslyrefreshing
hiswebbrowserCommandR,CommandR,CommandRasthesoftware
ofhiscompany,Kensho,scrapedthedatafromthebureauswebsite.Within
twominutes,anautomatedKenshoanalysispoppeduponhisscreen:abrief
overview,followedby13exhibitspredictingtheperformanceofinvestments
basedontheirpastresponsetosimilaremploymentreports.
Nadlercouldnthavedoublecheckedallthisanalysisifhewantedto.It
wasbasedonthousandsofnumbersdrawnfromdozensofdatabases.Hejust
wantedtomakesurethatKenshohadpulledtherightnumbertheoverall
growthinAmericanpayrollsfromtheemploymentreport.Itwastheleast
hecoulddo,giventhatwithinminutes,at8:35a.m.,Kenshosanalysiswould
bemadeavailabletoemployeesatGoldmanSachs.
Inadditiontobeingacustomer,GoldmanisalsoKenshoslargest
investor.Nadler,whois32,spenttherestofthemorningcheckinginwith
someofthebanksmostregularKenshousersatopexecutiveonthe
optionsandderivativestradingdesks,afundmanagerthentookanUber
downforalunchmeetingatGoldmansglasstowerjustofftheWestSide
HighwayinManhattan.Whilealmosteveryoneinthebuildingdressesin
neatlypressedworkattire,Nadlerrarelydeviatesfromhisstandardoutfit:
LouisVuittonleathersandalsandacasualbutwellcutTshirtandpants,both
bythedesignerAlexanderWang.Nadlerowns10setsofthese.Hisaustere

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aestheticisinformedbythesummervacationshespentinJapanwhile
pursuingadoctoraldegreeineconomicsfromHarvard,mostlyvisiting
THE WORK
ISSUE:
01
02
REIMAGINING THE OFFICE

03

templesandmeditating.(KenshoistheJapanesetermforoneofthefirst
statesofawarenessintheZenBuddhistprogression.)Healsowroteavolume
ofpoetryimaginedancientlovepoemsthatFarrarStraus&Girouxwill
publishlaterthisyear.
ImetwithNadlerlaterthatdayinhisownoffice,acrossthestreetfrom
theGoldmanbuilding,onthe45thfloorof1WorldTradeCenter.Hisdozenor
soemployeessharedalargeroomdeckedoutintypicalstartupstyle,
includinganaquariumandlargespeakersplayingelectronicmusic.Nadlerhas
anofficeofftothesidewithlittlemorethanalargedesk,madeoutof
reclaimedtelephonepoles,andalargeupholsteredleatherchairwith
matchingottoman.Afterclosingthedoor,Nadler,whohascurlydarkhairand
paleskin,satontheottoman,foldedhisbarefeetunderhimandtoldme
aboutthedaysfeedbackfromGoldman.Thisincludedsometipsonwhatthey
wantedinthenextreport,andagooddoseofamazementatKenshosspeed.
Peoplealwaystellme,Iusedtospendtwooutoffivedaysaweekdoingthis
sortofthing,orIusedtohaveaguywhosejobitwastodonothingotherthan
thisonething,Nadlersaid.
Thismightsoundlikebragging.ButNadlerwasprimarilyrecounting
thosereactionsasawayofexplaininghisconcernabouttheimpactthatstart
upslikehisarelikelytohaveonthefinancialindustry.Withinadecade,he
said,betweenathirdandahalfofthecurrentemployeesinfinancewilllose
theirjobstoKenshoandotherautomationsoftware.Itbeganwiththelower
paidclerks,manyofwhombecameunnecessarywhenstocktickersand
tradingticketswentelectronic.Ithasmovedontoresearchandanalysis,as
softwarelikeKenshohasbecomecapableofparsingenormousdatasetsfar
morequicklyandreliablythanhumansevercould.Thenexttranche,as
Nadlerputsit,willcomefromtheemployeeswhodealwithclients:Soon,
sophisticatedinterfaceswillmeanthatclientsnolongerfeeltheyneedoreven

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wanttoworkthroughahumanbeing.
Imassumingthatthemajorityofthosepeopleoverafiveto10year
horizonarenotgoingtobereplacedbyotherpeople,hesaid,gettingintothe
flowofhisthoughts,which,forNadler,meantclosinghiseyesand
gesticulatingasthoughhewerepreachingorplayingthepiano.In10years
GoldmanSachswillbesignificantlysmallerbyheadcountthanitistoday.
Goldmanexecutivesarereluctanttodiscusstheplightoftheirdisplaced
financialanalysts.SeveralmanagersIspoketoinsistedthatKenshohasnot
yetcausedanylayoffs,norisitlikelytosoon.NadlerhadwarnedmethatI
wouldhearsomethinglikethat.Whenyoustarttalkingaboutautomating
jobs,hesaid,everybodyallofasuddengetsreallyquiet.
Goldmanemployeeswholosetheirjobstomachinesarenotlikelyto
evokemuchpity.ButitisexactlyGoldmansprivilegedstatusthatmakesthe
threattoitsworkerssointeresting.IfjobscanbedisplacedatGoldman,they
canprobablybedisplacedevenmorequicklyatother,lesssophisticated
companies,withinthefinancialindustryaswellaswithout.

nlate2013,twoOxfordacademicsreleasedapaperclaimingthat47

percentofcurrentAmericanjobsareathighriskofbeingautomatedwithin
thenext20years.Thefindingsprovokedlotsofworriednewsreportsabout
robotsstealingjobs.Thestudylookedat702occupations,usingdatafromthe
DepartmentofLabor,andassignedaprobabilityofautomationtoeachone,
accordingtoninevariables.Theconclusionsmadeitclearthatthiswasno
longerjustthefamiliar(andongoing)storyofrobotsreplacingfactoryand
warehouseemployees.Nowsoftwareisincreasinglydoingtheworkthathas
beentheprovinceofeducatedpeoplesittingindeskchairs.Thevulnerability
ofthesejobsisdue,inlargepart,totheeasyavailabilityandrapidlydeclining
priceofcomputingpower,aswellastheriseofmachinelearningsoftware,
likeKensho,thatgathersandassimilatesnewinformationonitsown.

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AccordingtotheOxfordpaperandsubsequentresearch,employment
prospectsvarysignificantlybyindustry.Inhealthcare,forexample,where
humaninteractionisvital,automationthreatensfewerjobsthanitdoesinthe
labormarketasawhole.Taxiandtruckdrivers,though,faceableakfuture
givenrecentadvancesinselfdrivingcars.Amongbettercompensated
professions,theOxfordresearcherstookintoaccountsoftwarethatcan
analyzeandsortlegaldocuments,doingtheworkthatevenwellpaidlawyers
oftenspendhourson.JournalistsfacestartupslikeAutomatedInsights,
whichisalreadywritingupsummariesofbasketballgames.Financestoodout
inparticular:Becauseofthedegreetowhichtheindustryisbuilton
processinginformationthestuffofdigitizationtheresearchsuggested
thatithasmorejobsathighriskofautomationthananyskilledindustry,
about54percent.
TheOxfordstudyreceivedplentyofcriticismunderstandably,giventhe
patinaofexactnessthatittriedtoapplytoaspeculativeexercise.Nevertheless,
thefinancialindustryistakingautomationveryseriously,bothasan
opportunityandasathreat.Itisonethingtomakeafewanalystsredundant,
butautomationcouldputwholebusinessmodelsinperil.Investmentsinwhat
isknownasfintech,orfinancialtechnology,tripledbetween2013and2014to
$12.2billion,andstartupsarenowtakingaimatnearlyeverylineoffinancial
business.Decisionsaboutloansarenowbeingmadebysoftwarethatcantake
intoaccountavarietyoffinelyparseddataaboutaborrower,ratherthanjusta
creditscoreandabackgroundcheck.Socalledroboadviserscreate
personalizedinvestmentportfolios,obviatingtheneedforstockbrokersand
financialadvisers.NearlyeveryWallStreetfirmhasputoutresearchreports
onthetensofbillionsofdollarsofrevenuethatmightbelosttotheseupstarts
inthecomingyears.Banksaretryingtofendoffthenewcomersbymaking
theirowninvestmentsinstartupslikeKensho,whichhasraisedmorethan
$25millionsofar.
TheskilledindustriesthatformthebedrockofNewYorkCityseconomy

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havesofarlargelyavoidedthissortoftransformation,becausetheworkof
financialanalysts,publishersanddesignershasntbeeneasytoautomate.But
tolookatacompanylikeKensho,andthesortofconversationitgenerates
acrossthefinancialindustry,istoseethedegreetowhichthesetrendsarenow
confrontingindustriesthatusedtobethoughtexemptfromthissortof
disruption.Lastfall,AntonyJenkins,whowasdismissedafewmonthsearlier
aschiefexecutiveofBarclays,thegiantBritishbank,gaveaspeechinwhichhe
saidacomingseriesofUbermomentswouldhitthefinancialindustry.
Ipredictthatthenumberofbranchesandpeopleemployedinthe
financialservicessectormaydeclinebyasmuchas50percent,Jenkinstold
theaudience.Eveninalessharshscenario,Iexpectadeclineofatleast20
percent.Thisprocesscould,inatleastsomecases,helpdoawaywithsomeof
theexpensivebloatinthefinancialsystem,providingmoretransparent
serviceswithfewerhiddenfees.Itcouldalsobeseenasasatisfyingblow
againstthetitansofanindustrythatonlyrecentlyalmostcrashedtheworld
economy.Butsofartheburdenofjoblossesisstoppingjustshortofthe
executivesuites,evenasthegainsinefficiencyareworseningalready
troublinglevelsofincomeinequality.
SomeoftheventurecapitalistsbackingKenshohavetoldNadlerthathe
wouldbewisetostoptalkingaboutthepotentialjoblossesatthesamebanks
heistryingtosecureascustomers.Nadlerhastoldthemthatheneedstocarry
on,partlytomaintainhisintellectualintegrity.Heoftenconnectshis
discussionofjobstohispoliticalfundraisingonbehalfofcandidateswhocall
foramorerobustsocialsafetynet.Buthealsosaysthathisawarenessofwhat
hisbusinessisbothcreatingandtakingawaysetshimapartasan
entrepreneur:Itshisedgeinabusinessthatisallaboutcompetingto
predictthefuturemoreaccurately.

enshosmaincustomersatGoldmansofarhavebeenthe

salespeoplewhoworkonthebankshighceilingtradingfloors.Inrecent

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months,theyhaveusedthesoftwaretorespondtoincomingphonecallsfrom
investorswhobuyandsellenergystocksandcommodities,wonderinghow
theyshouldpositiontheirportfoliosinresponseto,forinstance,flareupsin
theSyriancivilwar.Intheolddays,thesalespeoplecoulddrawontheirown
knowledgeofrecenteventsandhowmarketsresponded,withallthe
limitationsofhumanmemory.Foraparticularlyvaluableclient,thesales
representativemighthavecalledaresearchanalystwithinGoldmantoruna
morecompletestudy,diggingupoldnewseventsandlookingathowmarkets
respondedineachcase.Theproblemwiththisapproachwasthatbythetime
theresultscameback,theoriginaltradingopportunitywasoftengone.
NowasalesrepresentativecansimplyclickaniconandaccesstheKensho
interface,whichconsistsofasimpleblacksearchbar.Nadlerwalkedme
throughtheprocessonhisownlaptop.TypeinthewordSyria,andseveral
groupsofeventsrelatedtoSyriascivilwarappear,inmuchthesamewaythat
Googlerecommendsqueriesbasedonpastsearches.Here,amongthetop
eventgroups,areAdvancesAgainstISIS,whichincludes25pastevents,and
MajorISISAdvancesandBrutalAtrocities,with105events.
Kenshossoftwareisconstantlytweakingandbroadeningthesesuggested
searchterms,allwithlittlehumanintervention.Insomeways,thisisthemost
sophisticatedpartoftheprogram.Inthepast,atraderoranalystwouldhave
tosearchWikipediaoranewsdatabaseusingwhateverkeywordscameto
mind.Kenshossearchengineautomaticallycategorizeseventsaccordingto
abstractfeatures.Ithasfiguredout,forinstance,thatISISsseizureofPalmyra
andFrancesfirstairstrikeinSyriawerebothescalationsinthecivilwarthere
butalsothatinoneofthosecases,ISISwastheaggressorwhileintheother
case,itwasonthedefense.Thesoftwarealsolooksfornewandunexpected
relationshipsbetweeneventsandassetprices,allowingittorecommend
searchesthatausermightnothaveconsidered.Forthisfeature,Nadlersaid,
hehiredoneofthemachinelearningwhizzeswhoworkedonGoogles
megacatalogoftheworldslibraries.

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Backonthetradingdesk,afterpickingoutonegroupofeventsthe27
incidentsofEscalationsintheSyriancivilwar,sayasalestradercanpick
fromaseriesofdropdownmenusthatnarrowthesearchtoaspecifictime
periodandaspecificsetofinvestments.Thebroadestsetincludestheworlds
40orsomajorassets,includingGermanstocks,theAustraliandollaranda
fewvarietiesofcrudeoil.TheycanthenclickonthegreenGenerateStudy
button,andafewminuteslatertheyllhaveanewpagefullofcharts.Nadler
clickedtodemonstrate.Thetopchartshowedthatthepricesofnaturalgas
andcrudeoilhaveunderperformedintheweeksafterpastescalationsinthe
war,whileAsianstocksandtheUnitedStatesandCanadiandollarpairhas
outperformed.Scrollingdown,wecouldalsoseehoweacheventinSyria
playedoutandbegintostructureanoptimalsetoftradesbasedonthat
history.
Nadlerclosedhislaptop.Thewholeprocesshadtakenjustafewminutes.
Generatingasimilarquerywithoutautomation,hesaid,wouldhavetaken
days,probably40manhours,frompeoplewhoweremakinganaverageof
$350,000to$500,000ayear.

The
Robots

hisisallquitesomethingforacompanythatwasfirstdreamedup

lessthanthreeyearsago.In2013,whileingraduateschool,Nadlerwas
workingasavisitingscholarattheFederalReserveBankinBoston.Atthe
time,theGreekelectionsandinstabilityacrossEuropewerebuffetingthe

Are
Coming
for Wall
Street

financialmarkets.WhenNadleraskedhowhecouldfindoutwhatimpact
similareventshadonfinancialmarkets,helearnedthatneithertheregulators
northebankershadanygoodmethodfordoingsobeyonddiggingupoldnews
clips.Inhisfreetime,NadlerbegantalkingwithaformerGoogleprogrammer
hebefriendedatastudentclubforJapanenthusiasts.Nadlerwassupposedto
befinishinguphisdoctoraldissertationontheinfluenceofpoliticsonthe
2008financialcrisis.Instead,withinweeks,hehadputtogetherasmallteam
andreceivedearlyfundingforhisideafromGooglesventurecapitalarm.
Theylaterreceivedinvestmentsfrommanyothersources,includingthe

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C.I.A.sventurecapitalarm,accordingtoForbes.
ByNATHANIELPOPPER
PhotographsbyJONNO
KenshosmainofficeisstillinCambridge,Mass.,twofloorsaboveanold
RATTMAN

barbershop,withwindowslookingoutontoHarvardYard.The30orso

FEB.25,2016
employeesinthelargemainroomlooklikethekindofbrighteyedkidswhoin

yearspastmighthavegonetoworkforGoldmanSachs.Here,though,they
workatstandupdesks,wearjeansandenjoythebenefitsofaZenroom,with
pillowsandtatamimatsformeditation,aswellasagameroomwith
chessboardsandapokertable.
IvisitedtheCambridgeofficeinDecember,shortlybeforeChristmas.
WhenIarrived,mostoftheemployeesweredoingtheirSecretSantagift
exchangetheirlaughterfrequentlytrickledbacktotheconferenceroom
whereIsatwithNadlerandafewofhistopdeputies.Curioustoknowhow
muchtheyalltalkedaboutthelargerimplicationsoftheirwork,Iaskedthe
deputieshowquicklythetopicofautomationandjoblosshadcomeupintheir
relationshipwithNadler.
Prettymuchthesecondsentence,saidMattTaylor,thechieftechnology
officer,who,at38,isoneoftheseniorcitizensofthecompany.
ThiswasDay1,saidMartinCamacho,Kenshos20yearoldchief
architect,whoenteredHarvardasafreshmanwhenhewas15.
CamachorememberedgoinghomeonenighttoNadlersapartment
duringtheirfirstsummerworkingonKensho.Theywatchedthescience
fictionfilmOblivion,aboutaworldpopulatedbyaliengeneratedhuman
clones,andstayeduptalkingaboutthesocioeconomicimplicationsofthe
story.Morerecently,Nadlerinvitedhisengineeringteamtoadinneratoneof
Cambridgesnicestrestaurants,HenriettasTable,foragroupconversation
aboutthemoredistantimplicationsofautomation.Nadlersaidheanticipated
someformofstrongartificialintelligence,wherebycomputersinthefarfuture
wouldbesmartenoughtoanticipateourneedsandusherinaneraof
abundance.Forthenextfewdecades,though,hepredictedamore

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complicatedtimeaninterregnuminwhichthecomputersarenotassmart
aspeoplebutsmartenoughtodomanyofthetasksthatmakeusmoney.
Camachowaslesspessimisticthanhisboss.Whencomputerassisted
mathproofswereinventedafewyearsback,hesaid,itdidntleadtoany
declineinthenumberofmathresearchjobs.Ithinktherewillbeplentyfor
everyonetodo,Taylorsaid,agreeing.
WhenIraisedthetopicofautomationwithexecutivesatGoldmanand
beyond,Ioftenheardasimilarlyoptimisticbeliefthatallthenewsoftwarewill
freeupemployeesinthefinancialindustrytodoother,morevaluablethings
thatitwouldalsocreatenewtypesofjobsthatdontexistrightnow.Several
executivesIspokewitharguedthatwhenA.T.M.swerewidelydeployed,you
didntsuddenlyseebankbranchesdisappearing.
ThisisacommoncriticismoftheOxfordreportonautomation:Evenif47
percentofallcurrentjobsendupbeingautomated,thatdoesnotmeanthat47
percentoftheworkingpopulationwillnothavejobs,asmanynewspaper
articlesonthereportconcluded.Carsoncedisplacedlotsofcoachmenand
stableboysbutcreatedmanymorenewjobslayingouthighwaysand
attendingservicestations.Nowadays,softwarethatprovidesfinancialadvice
hasautomatedtheworkofsomestockbrokers,butitisalsoexpandingthe
numberofpeoplegettingfinancialadviceandthedemandforcheap
investmentproducts.
TheleadauthorontheOxfordpaper,CarlBenediktFrey,toldmethathe
wasawarethatnewtechnologiescreatedjobsevenastheydestroyedthem.
But,Freywasquicktoadd,justbecausethetotalnumberofjobsstaysthe
samedoesntmeantherearenodisruptionsalongtheway.Theautomationof
textileworkmaynothavedrivenupthenationalunemploymentrate,butvast
swathesoftheAmericanSouthsufferedallthesame.Whenitcomestothose
A.T.M.s,therehas,infact,beenarecentsteadydeclineinboththenumberof
bankbranchesandthenumberofbanktellers,evenasthenumberoflowpaid

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workersinremotecallcentershasgrown.
Thispointstoadisconcertingpossibility:Perhapsthistimethemachines
reallyarereducingoverallemploymentlevels.Inarecentsurveyoffuturists
andtechnologists,thePewResearchInstitutefoundthatabouthalfforeseea
futureinwhichjobscontinuetodisappearatafasterratethantheyare
created.

artinChavez,aboisterous,beardedmanwhorunsallof

Goldmanstechnologicaloperations,isunrestrainedinhisenthusiasmfor
Kensho.Thisthingthatwewouldhavedoneinaverybespoke,almost
artisanalwayisnowsomethingthatKenshohasindustrialized,hetoldme.
ChavezsaidKenshoitselfwasunlikelytodisplacemanyemployees.The
software,hesaid,wasdoingsomethingthatwaspreviouslysotimeconsuming
thatitwasseldomattempted.(Someusersalsotoldmethattherewerestill
significantlimitationsonthesortofeventsthesoftwarecouldsearch.)But
whatevertheimpactofKensho,Chavezslargereffortstodigitizemoreof
Goldmansoperationsarealreadychangingthenumberandthetypeof
employeesatthefirm.Overthelastfewyears,thenumberofcampusrecruits
comingtoGoldmanfromscienceandtechnologymajorshasgoneup5
percenteachyear,whilethetotalheadcounthasbarelybudged.(Goldmanis
oneofthefewcompaniesonWallStreetatwhichthetotalnumberof
employeeshasntdroppedsignificantly.)Imprettysuretherearegoingtobe
newjobs10or20yearsfromnowthatnoneofuscouldevenimaginetoday,
Chavezsaid.
Stocktrading,oneoftheearliestareastogoelectronic,providesan
interestingprecedentforhowautomationcanplayoutinaninstitutionlike
Goldman.Onthecompanystradingdesks,stocksarenowboughtandsoldby
computersinsteadofpeople.Chavezsaysthattheadventofcomputerized
tradingoverthelasttwodecadeshasreducedthenumberofGoldman

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employeeswhobuyandsellAmericanstockstheoldfashionedwayoverthe
phonetofourfromaround600,butthechangeinthenumberoftraders
tellsonlypartofthestory.Someofthetraditionaltraderswerereplacedby
programmerswhodesignandmonitorthenewtradingalgorithms.Beyond
that,therearenownewjobsinthedatacenterswherethehighspeedtrading
takesplace.
Goldmandoesntprovidenumbersonanyofthis.ButPaulChou,who
workedonGoldmanselectronictradingdesksfrom2006to2010,toldme
thathewouldguessthatthecompanyprobablyneededoneprogrammerfor
every10oftheoldschooltraderswholosttheirjobs.Inonesignofthe
shrinkingworkforce,Goldmanmovedthelasttraderoutofoneofitsfour
Manhattantradingfloorslastyear.
TheprogressionofGoldmansstocktradingoperationsalsoillustrates
thatautomationisnotanonoffswitch.WhenChoufirstjoinedGoldman,
aftergraduatingfromM.I.T.,partofhisjobinvolvedloggingontodozensof
tradingsystemsandcheckingonwhatthealgorithmswerespittingoutto
makesuretheywerentmakinganymistakesbeforethetradeswereexecuted.
Chousatnearawomanwhohadbeendoingphonebasedtradingforyears.
ShehelpedChouandhisyoungcolleagueslearnwhattolookforinagood
trade.Overtime,though,theprogramsprovedthemselvesmoreerrorproof
thanthehumans.ThewomanleftGoldman.AndthenChouhimselfcreateda
newprogramthatloggedintoallthetradingsystemsandpulledeverything
intoasinglescreen.Whenhefirstgotitgoing,heremembershisboss,a
programmerhimself,turningtoChouandsaying,IdontevenknowwhyI
showuptoworkanymore.
ThesoftwareChoudesignedmadeitpossibleforhimtodedicatehimself
tohigherlevelwork,researchingnewtradingstrategiesforthecomputers.
Thiswasmoresatisfyingthanallthemonitoringhehadbeendoing,but
eventuallyitbecametoorepetitiveaswell.ChouleftGoldmanin2010for
SiliconValleyandnowrunsLedgerX,anoptionsexchangethathefounded

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withhiswifeandtwoothers.TheteamheleftatGoldmanwassmallerthanit
waswhenhearrived.
OverthecourseofmyconversationswithNadler,hebackedawayfrom
thenotionthatKenshowilldestroyjobsatGoldmanitself.Buthesaidhehad
nodoubtthatKenshoandotherfinancialstartupswouldeliminatejobsas
theyexpandedacrosstheindustryandthatthepaceofthelosseswouldbe
muchfasteroutsideGoldmanthaninside.AftertheendofGoldmansperiod
ofexclusivitywithKensholastsummer,Nadlersignedcontractstorolloutthe
softwareatJPMorganChaseandBankofAmerica.
Thenumberofjobsthatthesebankswillsupportinthefuturewillbe
influencedbymuchmorethanjustsoftware.Banksarecurrentlycuttingback
inresponsetoslowerthanexpectedeconomicgrowthandnewregulations
sincethefinancialcrisis.Butthesefactorsarealsoencouragingallthebanksto
lookforanyplacewheretheycanfindacheaperandmoretransparentwayto
dojobsthatarecurrentlybeingdonebyexpensiveandunreliablehumans.
WhenIaskedChavezwhetherthejoblosseswerelikelytocontinueto
outpacethegains,hereactedwithwhatseemedlikegenuineuncertainty.
Thatisoneofthemostinterestingquestionsofourtime,hesaid.

arlBenediktFrey,theleadauthorofthe2013studyon

automation,hasdonemorerecentresearchindicatingthatinnovationsareno
longerprovidingasbigaboosttotheeconomyandthelaborforceastheydid
inthepast.InapaperhepublishedlastyearwithThorBerger,aSwedish
academic,hefoundthatinthe1980s,alargeportionoftheAmericanwork
forcewasgoingintojobcategoriesthatdidnotexistadecadebeforeIBM,in
otherwords,washiring.Thatmovement,though,sloweddowninthe90sand
wentpracticallytozerobetween2000and2010.Tothedegreethatthereare
newjobs,Freysdatasuggeststhattheyareoftenlowerpayingonesthatserve
thewealthyelite,inroleslikepersonaltrainerorbarista.

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Technologyisbecomingmorelaborsavingandlessjobcreating,Frey
said.
Onetheoryforwhythismightbehappeningisthatmanyoftherecent
technologicaladvanceshavebeeninsoftwareratherthanhardware.Whilea
companylikeIBMorDellneededemployeestobuildeachnewcomputerfor
everynewcustomer,softwarelikeFacebookandKenshocanbereplicated
endlessly,atnearzeromarginalcost.WhenChoucameupwiththesoftware
thatautomaticallyloggedontodozensoftradingsystems,itcouldessentially
havebeenrolledoutacrossallofGoldmanstradingdesksaroundtheworld
thenextday.Thisisverydifferentfromthe1970s,whenDetroitwouldneedto
retrofititscarmanufacturingplantsoneatatime,aftertherobotsthemselves
wereactuallybuilt.ThedifferenceiswhatconvincedChou,afterhistimeat
GoldmanSachsandinSiliconValley,thatthisphaseofautomationwouldplay
outdifferentlyfrompastones.
Wearenotcomingupwithnewjobsasfastaswearereplacingthem,
Choutoldme.
ThisobservationappearstobeborneoutbyKensho.Inlessthanthree
years,Nadlerscompanyhasexpandedtoservethreeoftheworldslargest
banksandhasneededonlyaround50employeestodoso,justenoughtofill
tworelativelysmalloffices.Recently,NadlersNewYorkstaffmovedtoa
biggerofficein1WorldTradeCenter.Ithasmoreroomfordeskssothat
Kenshocanexpand.Butmostoftheadditionalspaceistakenupbyakitchen,
apooltableandaputtinggreen.
ThegrowthhasmadeKenshoworthhundredsofmillionsofdollarsand
turnedNadlerintoamillionairemanytimesover,atleastwhenhisstakein
thecompanyistakenintoaccount.Butitsnotclearhowbeneficialhis
companywillbetotheAmericanlabormarketasawhole.BackwhenIfirst
metNadler,foralunchlastsummer,hewasnttooproudtoadmitthis.The
cynicalanswerthatanothertechentrepreneurwouldgiveyouisthatwere

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creatingnewjobs,werecreatingtechnologyjobs,hetoldme.Wevecreated,
onpaperatleast,morethanadozenmillionaires.
Thatmighthelppeoplesleepbetteratnight,hecontinued,butweare
creatingaverysmallnumberofhighpayingjobsinreturnfordestroyinga
verylargenumberoffairlyhighpayingjobs,andthenetnettosociety,absent
somesortofpolicyinterventionornewindustrythatnoonesthoughtofyetto
employallthosepeople,isanetloss.

AversionofthisarticleappearsinprintonFebruary28,2016,onpageMM56oftheSunday
Magazinewiththeheadline:Stocks&Bots.

2016TheNewYorkTimesCompany

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