Watson Costs $100 Million Today, But Only $100,000 in 15 Years

The Speculist, a longstanding blog dedicated to Futurism, posted an excellent article today about IBM's supercomputer Watson and what it means for employment and jobs.

IBM has already declared their intention to move Watson into helping doctors diagnose disease and then into customer service.  However, Watson's exorbitant price tag of $100 million dollars means he's isn't a very profitable investment for businesses right now.

However, the cost of computing halves every 18 months.  This means in a decade, Watson will cost only ~$780,000.  In 15 years, he'll cost less than $100,000.  

Basically in little over 10 years, if you run a business and you replace 20 workers who make $40,000 dollars/year, not only will you get their labor value, but as Speculist writer Stephen Gordon comments, Watson never sleeps, can work 24/7 (triple the shift work of each human), never gets sick, never becomes tired or rude, never complains, never asks for a vacation. Watson will never sue you in court for abuse. 

Truth be told, the regulatory cost of employing a live human at $40,000 is actually much higher. Maybe around $60,000 give or take, depending on the state you live in, when you factor in healthcare, supplying other benefits and complying with government taxes and regulations. Also, you must weigh the fact that Watson probably is powerful enough to do many different kinds of tasks in addition to the work of the 20 human workers you just declined to hire.

This means Watson will be much for affordable, probably within the 7-8 year range, with mega-corporations being the early adopters.  In 15 years, small business will be able to afford Watson.  In 20 years, Watson will cost little more than a high-performance PC or Mac.  Machine customer service could be everywhere soon.

Visit The Speculist for more discussion on this fascinating topic.