The Great Transformation: The end of the internet economic era with 3 to 5 million jobs lost?

The “Faster Horse Problem”: Why your job is as vulnerable today as a farrier’s was 100 years ago

The story of the greatest economic upheaval of modern times cannot be captured in numbers, but only understood in its logic. When Henry Ford put the first moving assembly line into operation in 1913, he not only transformed automobile production—he also ushered in the end of an economic era that for centuries had been based on a single driving force: the horse.

This article was inspired by Alfred Rossi and one of his LinkedIn posts

The parallels to today's artificial intelligence are striking. Just as then, we are faced with a technology that doesn't improve existing processes, but fundamentally replaces them. When people today ask for "faster software" or "more efficient algorithms," they fall into the same mental trap as those who once wanted "faster horses." Neither understands that true innovation doesn't optimize the old, but rather makes it obsolete.

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The foundation of an entire civilization collapsed

The invisible power of the horse industry

Early 20th-century America was a horse economy in the truest sense of the word. The 25 million horses and mules, which reached their historic peak in 1915, were more than just a means of transportation. They formed the backbone of a complex economic structure that supported millions of jobs and sustained entire industries.

The magnitude of this dependence only becomes clear upon closer inspection. One in five American horses required daily feed, water, and care. The hay industry alone employed hundreds of thousands of farmers who produced feed for these animals on approximately one-third of America's arable land. In New York, 120,000 horses transported people and goods through the streets every day.

An economic system disappears overnight

The speed of change was breathtaking. Between 1915 and 1960, the American horse population declined from 25 to just 3 million animals—a decline of 88 percent in less than half a century. With every horse that disappeared, a piece of the old economic order vanished.

Entire professions became obsolete overnight. Wagoners, who had transported goods through the cities for decades, lost their livelihoods. Farriers, whose craft had remained unchanged since the Middle Ages, suddenly found themselves without jobs. Stablehands, carriage builders, saddlers—an entire value chain dissolved.

The transformation was particularly dramatic in cities. Broadway in New York, once lined with harness, saddle, and carriage shops, transformed within a few years into a street full of car dealerships, gas stations, and repair shops. Where horse manure had been the biggest environmental problem in 1910, the first traffic jams caused by motorized vehicles now appeared.

The invention of modern work

Henry Ford's true revolution

Ford's real achievement was not the invention of the automobile—which had already existed since the 1880s. His revolution consisted of the reinvention of work itself. When he commissioned the first moving assembly line at his Highland Park plant on October 7, 1913, he changed not only production but the nature of human activity.

The numbers speak for themselves. The time required to assemble a Model T after switching to assembly line technology fell from 12.5 hours to just 93 minutes—a 33-fold increase in productivity.

By 1926, the production of a car required only 53 working hours instead of the original 1,776 hours in 1908, which took into account all work steps, including supplier and manual processes, and not just final assembly.

This was more than a technical improvement – ​​it was the birth of mass production.

The price of progress

Ford recognized early on that his revolution had a high social price. Assembly line work reduced human activity to monotonous manual tasks. Ford himself described his goal as "reducing the demands on the worker's mental activity and reducing his movements to a minimum."

The solution was as brilliant as it was controversial: In 1914, Ford doubled the minimum wage in his factories from $2.50 to $5 a day. In doing so, he not only created loyal workers but also affluent customers. An assembly line worker could now afford even a Model T—a radical idea for a time when automobiles were luxury goods.

The emergence of a new economic order

The automobile industry created a net increase of 6.9 million jobs in the United States between 1910 and 1950—eleven percent of the total labor force in 1950. These new jobs encompassed not only manufacturing but entire industries: gas stations, repair shops, parking garages, road construction, and an entirely new infrastructure for motorized transportation.

The timing was crucial. The new jobs emerged parallel to the disappearance of the old ones. There was a seamless transition in which people could move from the horse industry to the automotive industry. A carriage builder could become an auto mechanic, a horse dealer a car salesman.

The invisible legend of the faster horses

A myth is born

The famous quote, "If I had asked people what they wanted, they would have said faster horses," is one of the most persistent myths in economic history—and also one of the most dangerous. Because Henry Ford never said those words.

The earliest documented mention of this quote is not by Ford himself, but by John McNeece, a cruise ship designer, in 1999. Quote Investigator, a reputable source for verifying quotes, could not find any authentic connection to Ford. In fact, Ford's documented statements show the opposite: He consistently emphasized the importance of understanding the customer.

The truth behind the legend

Ford wasn't a visionary loner who ignored his customers. On the contrary: his successes were based on a deep understanding of the needs of his time. People genuinely wanted faster, more reliable, and cleaner means of transportation. Early automobile advertisements promised just that: "Forgo a horse and save yourself the expense, care, and worry of keeping horses."

Ford didn't deliver what no one wanted, but what everyone needed but couldn't yet articulate. Automobiles solved the problems of horses: They didn't smell, didn't leave behind manure, didn't get sick, and only ate when they were moving. It was an evolution of the solution, not a revolution of need.

The danger of misquoting

The myth of the "faster horses" is more dangerous today than ever because it teaches a false lesson: ignoring customers. Modern companies fall into the same trap when they develop AI solutions without understanding their users' real problems. They believe innovative technology justifies ignoring customer needs.

The true lesson of Ford's success is the opposite: Innovation succeeds when you understand people's underlying needs and develop entirely new solutions to meet them. Ford revolutionized transportation not by ignoring his customers' desires, but by fulfilling them better than any horse-powered technology ever could.

The AI ​​revolution follows the same pattern

The new transformation begins

Today, we are experiencing a parallel situation to the horse-car revolution, only with even greater speed and reach. Artificial intelligence is not only replacing physical labor, as horses did back then, but is also systematically intervening in mental activities for the first time. Goldman Sachs estimates that AI could automate the equivalent of 300 million full-time jobs.

The figures are dramatic: 27 percent of the hours currently worked in Europe and 30 percent of those in the US could be automated by 2030. About two-thirds of all jobs are already exposed to some degree of AI automation.

The speed of change

The AI ​​revolution is unfolding at a pace that surpasses even the automotive revolution. Between January and June 2025, 77,999 jobs in the technology sector were directly lost due to AI—equivalent to 491 jobs per day. Thirty percent of US companies have already replaced workers with AI tools like ChatGPT.

Areas particularly affected include administration, customer service, and data processing. More than 7.5 million data entry jobs will disappear by 2027. In customer service, 20 percent of jobs are at risk, and administrative support will shrink by over 600,000 positions.

New jobs are being created – but not as expected

The World Economic Forum predicts a net increase of 78 million jobs worldwide by 2030. While 92 million jobs will be lost due to automation, 170 million new ones are expected to be created. These figures sound reassuring, but they obscure a fundamental problem: the skills gap.

77 percent of new AI jobs require a master's degree. The gap between disappearing and emerging jobs is much wider than in the automotive revolution. A data entry clerk can't simply become an AI engineer without years of retraining.

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The critical difference to history

The tempo problem

The crucial difference from the historical transformation lies in the timing. While the horse-to-car transformation took place over decades and offered a seamless transition, the AI ​​revolution will unfold in years or even months. By 2030, 29 percent of all workers will need to be retrained in their current roles, while 19 percent will need to embark on entirely new careers.

Microsoft studies show that AI is gaining a particularly strong foothold in language- and analysis-intensive professions. Translators, historians, sales representatives, and radio presenters are among the professions with the highest AI penetration. At the same time, physical activities such as nursing, trades, and construction remain largely unaffected.

The impact on various areas

Finance and accounting are already undergoing a fundamental transformation. JPMorgan is automating routine banking functions, with 20 percent of analyst roles at risk by 2030. In product data management, fully automated workflows are emerging that handle PDF linking, CSV conversions, and product optimization without human intervention.

Customer service centers that once employed 500 people are shrinking to 50 AI supervisory specialists. Accounting and finance are automating document extraction, reconciliation, and posting. A similar pattern is emerging in every area: a few highly qualified specialists oversee AI systems that take over the work of hundreds.

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Strategies for the new world of work

Retraining as a survival strategy

20 million US workers will need to retrain for new careers or learn how to use AI in the next three years. 83 percent of experts agree: demonstrating AI skills will give current employees more job security than those who don't.

The most sought-after skills of the future are clearly defined. Analytical thinking tops the list (important for 69 percent of employers), followed by resilience and flexibility (67 percent) and creative thinking. Technological expertise, especially in AI and cybersecurity, is becoming increasingly indispensable.

Hybrid working models as a solution

The future lies not in the complete replacement of humans, but in hybrid models. AI takes over repetitive tasks while humans solve complex problems that require empathy, creativity, and critical thinking. This collaboration can increase productivity without eliminating the human element.

New professional fields are already emerging: AI trainers, prompt engineers, AI ethics officers, and specialists in human-AI collaboration. These roles require both technical understanding and human skills—a combination that AI alone cannot provide.

Companies in transition

The transformation of business models

Forty-five percent of the companies surveyed plan to fundamentally redesign their business models with AI. Two-thirds are specifically looking for specialists with specific AI skills, and 77 percent plan to launch comprehensive retraining programs.

Microsoft is leading this transformation with AI agents that independently perform tasks such as answering customer inquiries, finding errors in the supply chain, or completing delivery slips. These "new employees" work 24/7, continuously learn, and gradually take on more complex tasks.

The role of managers

Business leaders face the challenge of simultaneously reducing costs and developing employees. Successfully navigating this requires immediate reskilling initiatives, strategies for human-AI collaboration, and coordinated public-private workforce development programs.

The balance between automation and human control is particularly important. Experts warn against granting AI too much decision-making freedom in critical areas such as justice, medicine, or financial advice. The machine cannot assess its own safety—a fundamental problem in the use of AI.

The social impact

Inequality is increasing

The AI ​​revolution doesn't affect everyone equally. 58.87 million women in the US workforce hold positions highly exposed to AI automation, compared to 48.62 million men. Lower-wage workers are 14 times more likely to be affected than highly skilled professionals.

The transformation is hitting young workers particularly hard. According to a Stanford study, employment among 22- to 25-year-olds in AI-intensive jobs has declined by six percent, while it has increased by nine percent in areas with low AI use. Experience appears to protect against AI competition.

Economic opportunities and risks

McKinsey estimates the long-term potential of AI at $4.4 trillion in additional productivity growth. AI chatbots alone could generate $8 billion in annual business savings. These enormous sums demonstrate the transformative potential of the technology.

At the same time, new risks are emerging. The concentration of AI development in a few large corporations could lead to the formation of monopolies. Data protection and security are becoming critical factors, as AI systems rely on vast amounts of data.

Lessons from history for the future

Innovation replaces, it does not improve

The most important lesson from the horse-to-car revolution is clear: True innovation doesn't optimize the old, but rather makes it obsolete. Companies that still ask for "more efficient Excel spreadsheets" or "better text blocks" are overlooking the transformative potential of AI.

The winners will be those who use AI to fundamentally reorganize work. Instead of digitizing processes, they should reinvent workflows. Instead of replacing humans with machines, they should create human-machine teams that achieve more than either can alone.

The courage to transform

Like Ford back then, today's companies must have the courage to radically question established processes. The companies that will succeed are those that are willing to rethink their entire work organization—not just automate individual tasks.

History shows that technological revolutions are inevitable. Those who adapt thrive. Those who cling to the past will end up like the horse breeders who tried to breed faster horses while the automobile was already changing the world.

The turning point has been reached

We stand today at a similar turning point to that of America in 1913. The AI ​​revolution can no longer be stopped, but its effects can still be shaped. The question is no longer whether it will come, but how we will use it—and whether we are prepared to make the right decisions in time.

The history of horses teaches us: Transformation is possible, but it requires courage, vision, and the willingness to let go of the familiar. Those who understand this lesson will be the designers of the new world of work. The others—like horses once were—will only be on display in museums.

The Car Revolution: How Millions of Horse Jobs Disappeared

In 1900, the total US labor force comprised only about 24 million people (those 10 years and older employed). By 1920, this number had grown to about 40.5 million.

A realistic estimate of the number of jobs lost in the horse industry due to the automobile revolution is 1-2 million direct jobs and at most 3-5 million including all indirect effects.

The scope of the horse industry

Horse population

• 1900: about 21.5 million horses and mules
• 1915: Peak at 25 million horses
• 1960: only 3 million horses (85% decline)

Direct employment in the horse industry

• 1890: 13,800 companies in carriage construction
• 1920: only 90 such companies
• Teamsters: from 120,000 (1870) to 368,000 (1890)
• Tram workers: from 5,100 (1870) to 37,000 (1890)
• Carriage building industry 1890: about 90,000 workers

Realistic estimate of lost jobs

Based on available historical data, actual employment in the horse industry around 1920 can be estimated at approximately 1.4 to 1.5 million direct jobs. These included:

• Wagoners and Teamsters: ~500,000
• Tram workers: ~100,000
• Carriage builder: ~50,000
• Farriers and blacksmiths: ~100,000
• Stable workers and keepers: ~200,000
• Feed traders and producers: ~300,000
• Other horse-related services: ~200,000

Timeline of the transformation

The transformation did not occur suddenly, but rather over 40 years (1920-1960). The horse population remained stable until 1920 and only then began to decline steadily.

Positive job development through automobiles

At the same time, between 1910 and 1950, the automobile industry created 7.5 million new jobs and destroyed only 623,000 existing ones – a net gain of 6.9 million jobs, which represented 11% of the total US workforce in 1950.

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