As companies automate, yes, there will be blood, says Benjamin Pring, Co-Director at Centre for the Future of Work, Cognizant, and Co-Author of “What to Do When Machines Do Everything: How to Get Ahead in a World of AI, Algorithms, Bots, and Big Data”. But this is not a time for pessimism, he argues in this email interview with Chitra Narayanan, describing how AI-first companies are racing ahead financially.
In the book you talk about the great productivity stagnation between 2000 and 2005 and how things are set to change now. What were the factors behind the low productivity growth despite so much tech?
As with any set of new technologies, there is a lag between adoption and results; this is particularly true with technologies that are fundamentally changing the nature of economic competition. For example, the meteoric rise of Google and Facebook has clearly been a boon to consumers, but a major deflationary force for media and publishing companies, as their historic revenue cash cow — advertising — has migrated online. As a number of financial analysts have noted, much new technology is eroding the pricing power of incumbents and is thus having a net deflationary affect. There is correspondingly a heated ongoing debate in academic economic circles about the need to measure — more accurately — the “real” impact of technology on productivity and growth. There is no doubt that the vast majority of modern workers are far more productive than they’ve ever been (think about your own work day and output), but the fact that this productivity doesn’t show up in statistics suggests there is something amiss with the statistics.
By when will we see the impact of robots on productivity? And any estimates by how much will be the gains?
It may be some time before the impact of AI and robotics is fully recognised in “official statistics”. However, their impact can be seen quite clearly on the financial performance of many leading technology companies; Google, Facebook, Amazon, etc. are all already “AI-first” enterprises and their results speak for themselves. To deny this reality simply because “official statistics” are struggling to keep up with the profound changes happening around us in real-time now would be a short-sighted and misguided approach.
Which are the areas/industries where we will see automation bringing in maximum productivity gains? And within organisations, which work functions?
There are two areas where robotics and automation are currently having the greatest impact, and then three others that over time will be become equally important; currently, financial services, and media and entertainment, have already seen AI/automation completely change the nature of the service/product and how the service/product is created. For example, large trading banks are replacing traders with software and the recommendation engines at the heart of Facebook and Netflix have upended the traditional media landscape. In the near future, the healthcare industry will transition from a “sick-ness” industry to a “well-ness” industry through the “quantified self” move toward bio-sensors and predictive healthcare maintenance. Similarly, education will move from a “one-to-many”, still quasi-“industrial” approach (1-teacher-to-30-kids and so forth) to a “one-to-one” approach based on tailored and targeted “next-best-action” recommendations for an individual student. Lastly, autonomous driving will change the nature of transportation fundamentally in the next 20-30 years. Self-driving vehicles will not only generate huge safety benefits, but will also entirely reshape cities and how we use physical space.
When you talk of areas where organisations can automate, you mention customer experience management. Isn’t that a high touch area rather than a high tech area?
The automation (through AI) will reduce the need for humans to be involved in “rote”, low-level interactions with customers and will free humans up to spend more time talking with and helping (and up-selling with) other humans. Counter-intuitively, the infusion of more automation into a process will end up with the process becoming more human.
Is there a danger in embracing digital transformation too fast? What is the right timing? In India, for instance, with smartphone penetration still low, the data fuel may be inadequate.
Digital transformation, of course, needs to be managed. AI/automation/robotics are simply tools, and like any tool, need to be mastered. There are many inhibiting factors that will prevent, or slow, the pace of transformation in any given company or society (social, legislative, commercial, etc.), but we firmly believe that the power of the new generation of technologies will provide long-term sustainable competitive advantages to those that adopt and master them. Missing the change to seize these advantages in the next 36 months will leave “laggards” so far behind in the competitive race that they may never be able to catch up.
While your book wonderfully explains all that organisations need to do in terms of architecture, processes etc, what about the people aspect? Is there a painless way of changing the workforce to fit in with the new jobs?
It would be very hard to argue that a major change ever comes without some pain. Yes, there will be blood. The first step for companies/societies to take is to accept that the growth of AI is the great story of our time; it is real, it is happening and there is not a moment to lose to understand what is going on and take action against this backdrop. Denial, inaction, and pessimism are not the foundations for good business models.