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CEO Daily: Friday 8th July

Is a machine about to take your job?


Michael Chui and his colleagues at the McKinsey Global Institute have an interesting piece out this morning that looks at which occupations in the U.S. are most susceptible to automation, and which are least.


At the top of the list are physical activities performed “in a predictable setting” – factories, fast food restaurants, etc. Also high are jobs that involve data processing or data collection – including some well-paying financial services jobs. The authors calculate that “one-third of the time spent in the workplace involves either collecting or processing data, and that both activities have a potential for automation exceeding 60%.”


Less susceptible to automation are jobs that involve physical activity but in “unpredictable environments” – cutting trees, making beds, collecting trash – or jobs that require interaction with other people – retail sales, purchasing supplies, etc.


Which jobs are least susceptible to automation? Those that “involve managing or developing people,” those where “expertise is applied to decision making and planning,” and “creative work” – which includes everything from writing software to creating menus to getting up at the crack of dawn to compose a newsletter. (Phew.)


The safest jobs are in education. “While digital technology is transforming the classroom,” the authors say, “the essence of teaching is deep expertise and complex interactions with other people that machines so far are not good at.”


Fortune will be taking a closer look at the implications of technology in the workplace – as well as doing a deep dive into the digital transformation of education — at our Brainstorm Tech conference in Aspen next week. I’ll be reporting from there.


More below, including the tragic shooting of five police officers in Dallas.


Alan Murray

Top News

• Chaos and Horror in Dallas

Five police officers have been killed and six more injured by snipers during a protest march in Dallas against police brutality. The shootings appear to be a response to two separate, highly publicized incidents this week in which white police officers have shot dead African American men. Police have apprehended three suspects and were exchanging gunfire with a fourth in a parking garage downtown early Friday morning, who has warned of bomb attacks to come. They suspect that some planners and perpetrators may still be at large. There were peaceful protests across the country at the two earlier killings last night. President Obama called the attack “vicious, calculated and despicable.” He also noted the role played by the free availability of firearms and hinted at fresh efforts to control them. According to The Guardian, police have shot 531 people in the U.S. so far this year, of which 256 were white, 130 black and 82 Hispanic. Some 27 police officers have been shot in the line of duty in that time, according to the website Time, The Guardian

Jobs, Jobs, Jobs

The BLS is expected to announce a rise of 175-180,000 in non-farm payrolls in June after the shockingly low 38k in May. The Verizon strike, and its end, will have distorted both the May and June numbers, and created potential for sharp revisions of previous data, so some market volatility afterwards is more likely than not. But with better weekly data and a strong ISM survey already factored in, it will need something spectacular to generate a lasting sense of optimism, given the headwinds being generated by Brexit. However, European and Asian stocks have opened brightly this morning, despite an inevitable sharp drop in U.K. consumer confidence, and a more surprising disappointment from Germany’s export sector.   Bloomberg

The Best Woman for the Job

The U.K.’s next Prime Minister will be a woman. Nearly 200 of the Conservative Party’s 330 lawmakers want it to be the pragmatic Theresa May, the long-serving Home Secretary who actually supported the Remain campaign in the EU referendum. Her opponent, in a run-off to be decided by the Party’s 150,000 members, is Andrea Leadsom. Leadsom’s support for Leave is more sincere, but she has less ministerial experience and has damaged her credibility by appearing to puff her resume (while playing down her links to an offshore hedge fund). Labour leader Jeremy Corbyn, meanwhile, appears to have defeated a coup against him by his more centrist MPs (three-quarters of whom backed a no-confidence motion in him last week). The paralysis of both major parties is creating a political vacuum that is only exacerbating the uncertainties for business caused by the Brexit vote.  BBC

Theranos Loses Its Lab License

Theranos said it has received a notice from the Centers for Medicare and Medicaid Services (CMS), revoking its regulatory approval to operate and banning founder and CEO Elizabeth Holmes from running another lab for at least two years. Among the sanctions are a fine of an undisclosed amount and cancellation of the lab’s approval to receive Medicare and Medicaid payments for its services. The CMS’s decision is a result of its inspection of Theranos’s lab in Newark, Calif. last year. The Newark lab’s CLIA operating license will still be valid for another 60 days, though Theranos says it will not conduct any patients tests until “further notice.” Fortune



Around the Water Cooler

Americans Skip Obamacare so They Can Smoke

Against stupidity–as the poet has it–even the gods fight in vain. A new study from the Yale School of Public Health finds that an anti-smoking provision in the health law is discouraging people from signing up for insurance while simultaneously failing to get them to kick the habit. The Affordable Care Act allows health insurance companies to charge smokers an up-to-50% surcharge on their premiums. In theory, the fee acts as both carrot and stick. Smokers who want health insurance either pay the higher premiums to help insurers cover their historically higher health care costs or quit smoking so they can save both themselves (and the broader medical system) money. But no. Yale found that smokers—especially among the young, whose contribution is vital to the principle of risk-pooling–were more inclined just to skip enrolling.   Fortune

GO, Pokemon GO

Nintendo shares have leapt 10% in Tokyo trading this morning to a two-month high after the company’s new Pokemon GO smartphone game enjoyed an encouraging launch in the U.S.. The game has shot to the top of the rankings for free apps in Apple’s U.S. iTunes store (the revenue comes from in-app purchases, as usual). That contrasts with the disappointment it had with its first mobile title, Miitomo, when it was finally launched after much delay in March. The company behind Pokemon and Super Mario put off migrating its most popular games to other companies’ operating systems for too long, in a doomed attempt to protect its console business. However, such is the pull of its IP that the company is still valued at around $23 billion. It has promised four more mobile games by next March. Fortune

McDonald’s Hit by $235 Million Charge

McDonald’s said it would take a charge against earnings of $235 million as part of its plan to return more capital to shareholders by selling 4,000 restaurants to franchisees. The plan, which the company hopes will bring in $500 million a year in savings, has been in the air for some months already, and the figure of $235 million also includes costs related to the relocation of its headquarters to downtown Chicago, according to The Wall Street Journal. The sales will bring the company within touching distance of its goal of having 95% of restaurants owned by franchisees by 2018.  WSJ, subscription required

Havana, Here We Come

The U.S. moved a little closer to having normal relations with Cuba Thursday as the Obama administration tentatively proposed eight airlines including to start nonstop flights from the U.S. to Havana, as early as this fall. There were no glaring omissions from the list, which includes United Continental, Delta, American, JetBlue, Southwest and Alaska, along with Spirit and Frontier. Four more airlines submitted unsuccessful bids. The routes proposed come from a handful of U.S. cities that include large Cuban-American populations and serve as connection points or hubs within the U.S. They include Atlanta, Charlotte, Fort Lauderdale, Houston, Los Angeles, Miami, Newark, New York City, Orlando and Tampa, Florida. A further 10 round-trip flights to other Cuban airports may still be agreed under last year’s bilateral agreement which ended the U.S.’s travel ban. Travel by Americans to Cuba has increased by 77% since that agreement. Fortune