Successful businesses will be those that optimize the mix of humans, robots, and algorithms.

By Antonio Regalado

In this month’s Technology Review business report, we look at what it takes to succeed at the cutting edge of automation. Consider Amazon. The company not only automated book buying but also turned the computer systems it built to do so into a service called Amazon Web Services, making them available for anyone wanting to repeat the feat.

And now Amazon’s founder, Jeff Bezos, is placing new bets on automation. In March, Amazon paid $775 million for Kiva Systems, a company that makes robotic dollies that zip across warehouse floors carrying shelves full of goods. Kiva found it was more productive to have the humans who “pick, pack, and stow” items stay in one place and let intelligent shelves come to them. Among other reasons, Amazon said, it bought the robotics firm because the technology offered the chance to reduce labor requirements at its dozens of warehouses.

This is an example of what is going on in the economy more broadly. As the MIT economist David Autor has argued, the job market is being “hollowed out.” High-wage, high-skill employment is still being created—and so are many poorly compensated service industry jobs for food preparers, home care aides, and others. It’s the jobs in the middle that are disappearing: certain clerical, sales, and administrative jobs and some on factory floors.

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