More and more research organizations are producing reports on the future impact that technology and artificial intelligence will have on the automation of existing work. For example, the Brookings Institute, a Washington think tank, predicted that about 36 million Americans currently hold jobs with a “high exposure” to automation. In other words, they indicate that at least 70 percent of their tasks could be performed by machines using current technology.
Another recent study by Deloitte, the large accounting firm, found that 53 percent of companies had already started to use machines to perform tasks previously done by humans. They expected this number to increase to over 70 percent in the coming years.
At an economic conference in Davos, Switzerland, executives from major global companies admitted that if they don’t automate jobs as quickly as possible, their competitors will. It’s a fact that CEOs are under enormous pressure from their shareholders and boards to maximize short-term profits and the rapid shift to automation is the inevitable result.
This is evidenced by what has happened with the recent reduction in company taxation by 20 percent. The assumption was that companies would take these savings and invest them in expanding their operations and hiring new employees. I wondered, “Why CEOs would do that?” What actually happened was that CEOs took those savings in taxes and invested the money in automating their operations to eliminate employees, not add them.
Additionally, they took some of the money and also bought back the stock in their firms to increase the valuation.
All over the world, executives are spending billions of dollars to transform their businesses into lean, digitized, highly automated operations and reap the profitability that automation delivers.
The explanations in “corporate speak” are statements like, “We are undergoing a digital transformation, not laying off employees.” Or, “Workers aren’t being replaced by machines, they’re being released from onerous repetitive tasks.” And lastly, “We are adopting machine learning and other advanced technologies to improve efficiency.”
IBM’s “cognitive solutions” business unit, which uses AI to help businesses increase efficiency, has become the company’s second largest operating division, posting $5.5 billion in revenue in a recent quarter. UBS, the investment bank, projects that the artificial intelligence industry could be worth as much a $180 billion shortly.
Many argue that those being displaced by technology can be “reskilled.” I find this to be highly unlikely and a recent report by the World Economic Forum estimated that of the 1.37 million workers who are projected to be fully displaced by automation in the next decade, only one in four can be reskilled by private-sector programs.
This is a wide ranging disruption of jobs and the advances in artificial intelligence is just not restricted to industrial and warehouse robots that will alter the American workforce. Other activities like self-checkout kiosks, computerized hotel services, automated supermarkets and a host of other routine processes will be affected.
For example, Walmart and other retailers are preparing to open cashier-less stores powered by in-store sensors and cameras with facial recognition technology. QuickChek, the convenience store chain, just opened a new store with completely automated check-out machines that can also sort coins.