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Power Sheet – July 7, 2016

July 7, 2016, 2:33 PM UTC

Fortune 500 CEOs have told us for the past two years that their No. 1 challenge is “the rapid pace of technological change.” It’s hard in part because the advance of robots and artificial intelligence happens in small steps every day, lulling us into missing the magnitude of what it means. But leaders can’t afford to miss it. The challenge is to stay on top of what’s happening and continually to ask, “If this is possible today, what will be possible day after tomorrow?” Consider:

-A company called Starship Technologies begins in-the-wild testing of autonomous delivery robots in the U.K., Germany, and Switzerland this month. The knee-high, six-wheeled vehicles will roll down sidewalks carrying food or other merchandise from actual vendors to actual paying customers. Starship’s founders are Ahti Heinla and Janus Friis, who co-founded Skype.

The objections are obvious. Won’t vandals smash these things with cricket bats? Won’t alarmed pedestrians call the police? But a company spokesman tells Tech Crunch that the robots have already completed 5,000 miles of testing and encountered 400,000 people without any such incidents. That tells us something. Machines buzzing around autonomously don’t necessarily alarm people, and maybe the bad guys realize that such a device probably bristles with alarms and cameras (it does – nine cameras in this case). Still, just to be safe, humans will accompany the robots in this next phase of testing to monitor reaction and answer questions.

What’s most significant is that these may be the first autonomous robots to be integrated into human society in the public square, broadly defined. If Starship succeeds, we will have crossed an important threshold.

-Amazon on Monday awarded a $25,000 prize to a Dutch team for developing a robotic picker that could work in Amazon warehouses. The machine had to handle varied objects, removing them from a box and putting them in the right spot on the right shelf, and the reverse. Even this winning robot is much slower and clumsier than human workers, but then it doesn’t need medical benefits, won’t join a union, and can work 24 hours a day. And remember that robotic technology is doubling in power every two years. People are not.

-Which brings us to the European Parliament’s recent report raising the prospect of treating robots as “electronic persons” for tax purposes. We’ve mentioned this report before; now it’s drawing appropriate criticism pointing out that levying extra taxes on one of the most vibrant and productive sectors of the economy might not be the smartest idea. The legislators are worried that while people pay social security taxes, the robots that replace them don’t.

Let’s remember: We don’t know yet if the breathtaking advances in robotics and AI will reduce employment on net or, as technology has always done through history, will add jobs and raise living standards. As Amazon likes to point out, the more robots it uses, the more its business grows, and the more people it employs.

All of these news items raise the day-after-tomorrow question. Today’s leaders have to plan for a future that’s increasingly hard to imagine.

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What We're Reading Today

Jamie Dimon warns that thousands of bankers...

...could be moved out of Britain. Much depends on whether the post-Brexit U.K. keeps its "passport" rules with the European Union. For now, banks in the U.K. can sell services to E.U. countries without fees or regulatory hurdles. If that changes, Dimon says the worst-case scenario is that JP Morgan Chase would need to move thousands of bankers from Britain to the E.U.  Fortune

Second Tesla crash under investigation
The National Highway Traffic Safety Administration is trying to determine if the autonomous driving system in a Tesla Model X  played a role in a July 1 crash in Pennsylvania. Elon Musk's Tesla says there's no indication it did. If the autonomous technology was involved in the crash, it would be the second time in a month.  Reuters

Roger Ailes responds to sexual harassment claims
The Fox News chairman says ex-anchor Gretchen Carlson's claims of sexual harassment are "retaliatory" because he did not renew her contract. Carlson claims Ailes didn't renew the contract because she refused his sexual advances. Fox News's parent company, 21st Century Fox, is launching an investigation.  The Hollywood Reporter

Building a Better Leader

Young business owners aren't just looking for a quick buck
A survey of business owners in their 20s and 30s finds that 80% say they want to build the business and maybe pass it along to their kids, though about 60% don't have kids yet. AP

To focus more on customers' needs...
...styling startup Keaton Row changed its business model from using hundreds of freelance wardrobe stylists across the country to hiring a few for full-time positions. Changing the business model is traumatic, but in this case it seems to be working. Fortune

When starting a career, expect grunt work
Use that time to develop expertise in a niche, but don't expect constant praise. Fast Company

Political Posturing

Trump foes make one last push before GOP Convention
A group of delegates is trying to convince the Republican National Convention’s Rules Committee to change the rules, freeing all delegates to vote for whomever they like. The rogue delegates need support from 28 of the committee's 112 members, and the Wall Street Journal estimates they have 15 to 20 on their side. Donald Trump's camp is vigorously fighting the efforts. WSJ

DeBlasio cleared in one campaign finance investigation
The New York City Campaign Finance Board said Mayor Bill de Blasio and a closely tied nonprofit, Campaign for One New York, did not break the law in using millions of dollars in donations to push his political agenda. But the board admonished the group for doing it and called for new laws to prevent it in the future. While cleared in this case, de Blasio faces a number of open investigations by other state and federal agencies. NYT

Legislators send Theranos a stern letter
Representatives Frank PalloneDiana DeGette, and Gene Green of the House Energy and Commerce Committee demanded that CEO Elizabeth Holmes clarify what the company has done to comply with federal laws, address inaccurate tests, and respond to patients whose test results were invalid. Theranos had to retract two years of patient blood testing in the wake of findings by the FDA and the Centers for Medicare and Medicaid Services. Holmes's company must respond by July 14. Fortune

Up or Out

Western Digital names Mark Long CFO.  Nasdaq

Fortune Reads and Videos

Walmart says its mobile payment app...
…is now available in all 4,600 of its U.S. stores. The app improves the customer experience in stores and also eases online shopping. Fortune

Twitter tested its livestream capabilities... providing free views of Wimbledon matches. It's readying the lifestream feature for the NFL season. Fortune

Rapper T.I. gets sued by his restaurant's employees
They claim their paychecks bounced. Fortune

A hyperloop between Helsinki and Stockholm...
...would cost $21 billion and would bring in $1.29 billion of annual profit, according to estimates. Fortune

Quote of the Day

"Given Theranos’ disregard for patient safety and its failure to immediately address concerns by federal regulators, we write to request more information about how company policies permitted systematic violations of federal law and how Theranos is working with regulators to address these failures… We also request information to better understand the steps Theranos is taking to correct flawed test results sent to medical professional and patients." -- Members of the House Energy and Commerce Committee writing to Theranos CEO Elizabeth Holmes Fortune

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Produced by Ryan Derousseau