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While the field of artificial intelligence (AI) has been around for some 60 years, it’s now finally a part of our daily lives — including how we work, bank, shop, interact, invest, drive and get insured. The term AI means different things to different people, but at PwC we think about it on a continuum, moving from assisted to augmented and, finally, autonomous intelligence.
Here, I am primarily focusing on assisted intelligence — applications that help us better perform tasks we’re already doing today. This includes things like email filtering, automated processing of insurance claims and customer service chatbots, just to name a few applications.
Will AI and Robotics Replace Our Jobs?
Of course when you’re talking about AI, the question of automation and its potential to replace human jobs isn’t far behind. There have been many sobering predictions, including one by PwC’s own economic analysts, which suggests that around 38 percent of U.S. jobs could potentially be at high risk of automation by the early 2030s, followed by Germany (35 percent), the U.K. (30 percent) and Japan (21 percent). The automation appears highest in the transportation (56 percent), manufacturing (46 percent) and wholesale/retail (44 percent) sectors, but lower in healthcare and social work (17 percent).
But is this the entire story? No. In reality, not all of these jobs will actually be automated, for a variety of economic, legal and regulatory reasons. Furthermore, new automation technologies will create new types of jobs in the robotics, software and decision support domains. Additionally, productivity gains will generate added wealth and spending that will support an ever-increasing amount of service jobs. Similarly, history has proven the same alongside the automation of the agriculture and manufacturing industries over the last century.
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The net long-term impact of AI and automation on total employment isn’t a given — it could be either positive or negative. It will be a balance between an evolving workforce and the pace of technology advancement. Average pre-tax incomes should rise due to the productivity gains, but these benefits may not be evenly spread across income groups. For instance, the U.S. high school graduation rate reaching 83.2 percent (as shared by the White House in 2016), up from around only 40 percent post-World War II, may put pressure on the availability of unskilled labor.
How Will Automation Impact Workers?
While automation replaced plenty of agriculture and manufacturing worker’s arms and legs in the earlier industrial revolutions, the fourth revolution will see smart machines with the potential to replace our thinking with a combination of advanced sensors and machine learning algorithms. This is happening now and will continue with more impact into the near-term future.
Already, robotic process automation (rules-based software) is rapidly advancing from handling traditional applications for repetitive tasks to handling continuously changing tasks. Enterprises are also beginning to tap into the incredible amount of data made available by the Internet of Things (IoT) and APIs by applying machine learning technologies and training algorithms to simulate intelligent behavior and make well-informed decisions with little or no human intervention.
Over the coming years, these ongoing advances in AI will have profound impacts on jobs, skills and HR strategies in almost every industry, underlined by the fact that companies don’t have the time or resources to map out their plans for an AI-enabled world. Already, integrating AI into IoT networks is becoming a prerequisite for success in today’s IoT-based digital ecosystems.
What Should Workers Do?
So, where does that leave workers? PwC recently surveyed over 5,000 of them across 22 countries and 79 percent said they believe technology will cause job losses over the next five years. This is not surprising given that AI is trending on social media and headlining in the mainstream media. And, in fact, AI will gradually replace humans in some functions like customer service, personal assistants and document processing. But it won’t be a straightforward matter, as challenges will persist because of concerns around privacy, trust, lack of trained staff and regulations, among others.
We’ll also see the partnering of man and machine, which will create new roles for workers. The idea of humans working with automation more broadly, better understanding software and developing soft skills will prove increasingly important in the future of work. Knowledgeable workers who understand AI (and robotics) and can find ways to automate the redundant tasks associated with their roles will become more productive and valuable.
What Should Business Leaders Do?
At the same time, CEOs seem to see the value of humans amidst this increasing potential of automation. The most recent PwC CEO Survey found that only 16 percent of nearly 1,400 CEOs globally interviewed plan to cut headcount in 2017, and only a quarter say it’s largely due to technology/automation. Conversely, 52 percent plan to increase overall hiring.
Additionally, 77 percent of CEOs worry that skills shortages could impair their company’s growth. And they say soft skills are the most valuable to the enterprise and the hardest to find. Creative leaders with a high emotional intelligence are in very short supply and are needed to deliver the innovation in demand by today’s business climate. Indeed, they’re even thinner on the ground than they were in 2008 when, answering a similar question, CEOs indicated people with technological skills are more plentiful today than ever before.
It’s a complex picture, to be sure. But one thing’s clear: business leaders in all industries and functions must move rapidly to drive value from AI.
The Samsung Galaxy S8, which incorporates AI technology through its digital assistant Bixby, is another example of technology that’s changing the way that workers operate.