Artificial Intelligence, coming to a business near you!
There is no doubt about it, AI is coming to a business near you and is rapidly becoming more sophisticated. From robotic snakes which can fix oil rigs underwater, to robotic arms which allow you to select recipes from the internet, which will then be cooked for you in your home… the arms will even put the dishes in the dishwasher for you after as well!
It is predicted that AI will soon be playing key roles in all of our working and personal lives such as:
- Taking over dangerous jobs
- Cyborg technology i.e. for people who have lost limbs
- Fully automated transportation
- Solving complex problems – absorbing and analysing far more data than humans can and in significantly less time
- Supporting the elderly and others who need care
But what does this mean for the future of work and businesses?
AI is already replacing human tasks and jobs and this trend is likely to continue and accelerate for the foreseeable future. Some are calling it the fourth industrial revolution. So, if the first was the steam engine, the second was fuelled by electricity, and digital computing was the third, what have we learnt from the first three which we might apply now?
If the past tells us anything about drastic technological advance, it is that humans being replaced by automation is unlikely to reduce the number of jobs overall. If we consider farming and manufacturing, overall job numbers increased due to:
- the increased demand for cheaper products
- unrelated new roles were created, some of which were not predictable at the time of change
- growth in sectors such as retail, healthcare and education.
As incomes rise, consumers spend disproportionally more on discretionary goods and services such as cars, leisure, accommodation and food services, but they also increase their non-discretionary spending on essentials such as food and clothing.
It is predicted that lost human jobs are likely to be offset by new roles for a number of key reasons:
- The demand for work and workers is likely to increase as economies grow – partly fuelled by increases in productivity due to automation
- Increased need for health and social care for aging societies
- Investment in infrastructure and energy
- Rising incomes and consumption
- ‘Marketisation’ of previously unpaid work i.e. domestic work such as cleaning and gardening. Demand for this is increasing in advanced economies as more women move into paid work and wage increases result in the choice to prioritise leisure time over domestic chores
Activities most susceptible to automation are currently considered to be:
- Physical activities in predictable environments, such as operating machinery, food preparation and driving
- Collecting and processing data i.e. recruitment and selection processes, paralegal work, accounting, and back-office transaction processing
It is anticipated that support from AI will allow more junior workers to make informed decisions, thereby flattening traditional hierarchies by stripping out layers of middle management. At the same time, jobs created are likely to require people with skills which are less simple for machines to replicate such managing and leading other people, interacting with others, social and emotional sensing and reasoning, applying creativity and collaborative problem-solving. This in turn means that in the main, jobs created will require a higher level of education than those which are displaced by automation. It is likely that in advanced economies, high wage jobs will see the most growth and middle wage jobs decline the most.
So what can businesses do to embrace the new age of AI?
1 Get on the AI bandwagon!
Research indicates that businesses who get on the front foot with technological advance will see bigger dividends, whilst those which hang back are already suffering as competitors reap the rewards of increased productivity and accuracy coupled with reduced costs. The gap in performance between early adopters of digital technologies in general and AI in particular, is widening.
2 Review and adapt business processes and organisational design
Businesses which adapt automation piecemeal, will not see the true potential of their investment. A thorough review and reinvention of business processes and workflows to support organic implementation of automation is crucial. As you begin to adopt automation, you will also need to consider the structure of your business and its ability to adapt. Automation will not happen overnight, but through people working alongside machines, so an adaptive structure which supports machine-human environments will be essential to its success.
This has the potential to be a far more rewarding environment for your human workforce as they are freed from mundane tasks to focus on tasks which require greater use of their higher cognitive and creative abilities.
3 Talent Management Activities
You will need the right people with the skills to implement the business process changes and new technology. This might mean training existing employees or hiring new people but either way, you will need to ensure the right talent is in place to support the transition process.
Determining what skills and experience you need will be crucial to ensure money is not wasted. Retraining and redeployment of existing staff will almost certainly be cheaper, as long as they are capable of the required level of adaption. In addition, this will enable you to retain the historical knowledge they have of your business.
4 Implement Flexible Work Options
Creating more flexible work options may enhance reemployment of displaced workers and it is arguable that businesses who do not offer more flexible work options will lose out on the talent of the future. Research by MGI indicates that people working in the ‘gig’ economy currently make up 20-30% of the working age population in Europe and the United States — and that 70 percent of those say they do so out of preference, not because they cannot find a traditional job. Moreover, the number of people choosing to work outside traditional jobs is expected to rise.
5 Build digital and analytical capabilities
A strong digital base will be key for companies to successfully implement AI technologies with which AI may interact to gain information and inform its decisions. This means building supporting digital assets (such as patents, designs, databases etc.) and analytics capabilities.
6 Prepare for 24/7 working, dynamic pay and AI performance assessments
In this new digital age, consumer demand for instant access to products and services is increasing. With companies such as Amazon and Deliveroo providing rapid delivery of almost any product you could wish for; many customers are demonstrating that they would prefer to pay a premium than to wait. The ‘gig’ economy supports this way of working but it also turns traditional pay structures on their head with dynamic pay, based upon demand as seen in Uber.
According to Marketforce research, those surveyed expect to see online digital profiles for candidates looking for their next ‘gig’. These will contain details of their experience, alongside peer/management & customer feedback and real-time data driven performance analysis, provided by AI technology. This will make it simple for employers to select potential candidates at the swipe of a screen, in much the same way as we choose where to eat or stay using sites such as Tripadvisor and AirBnB.
This is likely to initiate a power shift between employers and employees however, as those with the highest ratings are in the highest demand and may therefore demand the highest pay.
The key message for business leaders now is that this is not a time to sit back and wait for events to unfold. It may sound like mumbo jumbo but the future is coming and we encourage you to embrace it!
- McKinsey Global Institute’s December 2017 report: JOBS LOST, JOBS GAINED: WORKFORCE TRANSITIONS IN A TIME OF AUTOMATION
- PwC Global’s 2017 report: WORKFORCE OF THE FUTURE, THE COMPETING FORCES SHAPING 2030
- Pega and Marketforce Autumn 2017 report: THE FUTURE OF WORK