A.I. Impact on Business: Good, Bad, or Both?

A.I. Impact on Business: Good, Bad, or Both?

Will artificial intelligence (A.I.) spur economic growth and create new wealth? Will machines that process information like humans help us cure cancer or avert climate change? Possibly. Those are the upsides of the newest generation of “thinking” or “smart” machines. But the downside is that millions of human workers will need to be retrained, as robots make their existing jobs redundant.

The World Economic Forum (WEF), on the heels of its most recent conference in Davos, Switzerland, has published an analysis on the technological and sociological drivers of employment. The report, titled “The Future of Jobs,” validates the accelerating impact of technology on global employment trends, and also highlights serious concerns that job growth in certain industries is still very much outpaced by large scale declines in other industries.

According to a study released by the WEF, increased automation and A.I. in the workforce will lead to the loss of 7.1 million jobs over the next five years in 15 leading economies, including huge losses in China and India. Why? Because the economies of those populous countries rely more heavily on low-skilled work that can easily be replicated by “thinking” robots.

Meanwhile, these new technologies will create or help create just two million new jobs over the same period. And they will create the need for employees to change jobs more often. In the United States, in 2012, figures from Department of Labor statistics show the average job tenure of 4.6 years to be shrinking.

The WEF summarizes current and future trends with:

“According to many industry observers, we are today on the cusp of a Fourth Industrial Revolution. Developments in previously disjointed fields such as artificial intelligence and machine learning, robotics, nanotechnology, 3-D printing and genetics and biotechnology are all building on and amplifying one another. Smart systems — homes, factories, farms, grids or entire cities — will help tackle problems ranging from supply chain management to climate change. Concurrent to this technological revolution are a set of broader socio-economic, geopolitical and demographic developments, each interacting in multiple directions and intensifying each other.”

The WEF report also stresses that socioeconomic drivers such as changes in work environment (more flexibility, on-demand work, remote work), a growing middle class, and urbanization in emerging markets contribute as much to the changes in employment trends as technology.

In those cases, two job types will become critically important by the year 2020. The first are data analysts, which companies expect will help them make sense and derive insights from the torrent of data generated by technological disruptions. The second are specialized sales representatives, as practically every industry will need to become skilled in commercializing and explaining their offerings to business or government clients and consumers, either due to the innovative technical nature of the products themselves or due to new client targets with which the company is not yet familiar, or both.

“Given the overall disruption industries are experiencing, competition for talent will be fierce, and finding efficient ways of securing a solid talent pipeline a priority for virtually every industry. The situation is expected to worsen significantly over the 2015-2020 period.”

So yes, there’s great reason for Silicon Valley’s optimism in the future, as technologies have the potential to make enormous advances in productivity and solve challenging and previously intractable problems in every industry from healthcare to transportation. But even taking the WEF survey’s estimation of 5.1M lost jobs by 2020 with a grain of salt, it’s clear that the shift in employable skills will be a challenge.

“We’re moving to a world where there will be vastly more wealth and vastly less work,” says Erik Brynjolfsson of the Massachusetts Institute of Technology. “That shouldn’t be a bad thing, and shame on us if we turn it into a bad thing.”

—More info: www.weforum.org/reports/the-future-of-jobs

Leave a reply