The End of the Job

Article originally posted on LinkedIn.

I recently sat down with a number of highly successful business executives to talk about the future. They spoke openly about the risks of disruption to their business models, and some even expressed doubt as to their company’s ability to respond to rapid change in the market, brought about by new entrants riding the wave of innovation.

The topic of the future of work came up often, particularly with regards to automation, machine learning, and artificial intelligence. In this article I will be reflecting on these discussions. This is evidently a topic that generates big ideas and bold statements. As one put it, “it’s clear, it’s the end of the job, and if you’re worried about your job being automated, then it most likely will be”. One executive believes that a major challenge for companies heading into the future is taking people with them. These are clearly not ordinary times, and we’re yet to fully understand whether changes will be incremental or sudden.

In discussing the next 20 years, I identified three possible scenarios:

Scenario 1: That automation will continue to simply enhance job productivity by taking ownership of certain tasks, rather than entire roles. This scenario is popular in many McKinsey studies. Business processes will be run entirely in the cloud, and new collaborative tools will further push employee decentralisation. In developed countries initially, work-life balance will improve. Due to societal frustration, political intervention may even limit the use of technology and automation in order to manage growth; think demagogue leaders who focus heavily on the ‘jobs displacement’ narrative. Nevertheless, change will still occur in most roles, at least to some degree.

Scenario 2: That many jobs will be automated in their entirety, however new skilled jobs will be created to replace them, and that there’s no need to panic – there will be a change in type rather than a major reduction. In many cases, a staff-on-demand model can be beneficial, and productivity will soar. The nature of an organisation will be redefined, but technology will continually complement work. One executive bluntly cautioned however, that these new jobs “are for smart people… and most people aren’t smart”. Middle management and back office jobs will be reduced significantly, however it’s believed that humans will still provide value at the front of the house, and also in core innovation, implementation, and business ownership roles.

Scenario 3: That it’s a disaster – a very serious issue. Automation and artificial intelligence will significantly reduce the need for people in jobs. This is exacerbated by high population growth in many parts of the world. Sweeping change is on the horizon, and this is not just in manufacturing, but across the many professional services industries as well. In theory, complex decision-making and expert advice can be automated by way of intelligent systems. The concept of freelancing may serve as a way forward in the face of automation, where businesses would use limited human resources efficiently. Even with existing technology, up to 45 percent of tasks can be automated today (according to a McKinsey study). Machine learning is already considered “spooky”, and it was stated that “by 2025 we could be at a point where computation power has the power of 8 billion brains”. In such a scenario, there would be an explosion of entrepreneurs, and ideas would be brought into reality and scaled up by efficient global systems. Nevertheless, the uncertainty in this scenario is unprecedented. For instance, how will people afford to live? How does this scenario fit in with our current economic system?

There is naturally more certainty in the short term, and it’s clear that roles are changing. In many cases, more specialist roles are being created at the front-end, while back-end processes are slowly being automated. In marketing for instance, it is commonplace to find data scientists enjoying the fruits of Big Data by tinkering with algorithms, and jobs are becoming increasingly data-centric in this field. During a recent workshop I attended, it was stated that marketing is a balance between art and science, and the speaker firmly believed that it will remain like this for the foreseeable future. Roles are becoming higher value, and there would likely be more communicating and collaborating rather than so much doing. In essence, there will be more knowledge workers. Furthermore, digital natives in the workplace are having to teach themselves relevant skills as universities struggle to keep up.

In the airline industry, there is a belief that within 30 years, planes could be managed by people on the ground with no need for a pilot on board. This is already happening in the automobile industry with self-driving cars. An airline executive I spoke to admitted that it’s actually people who complicate the industry and negatively affect customer experience; the more that can be automated, the better. In the airport itself, I’m sure most of you have utilised both automated check-in and immigration kiosks. Healthcare will be transformed immeasurably with the development of the “robot nurse” and sophisticated in-home healthcare systems, not to mention what’s eventually possible with nanotechnology. In IT, an executive believed that most of the donkey work and plumbing that we take for granted today will be gone in 10-15 years. In the banking and financial services sectors, major decreases in employment are expected. In fact, the number in Australasia has already halved in the last two decades, and this is expected to soon halve again given current projects in digitisation and automation. It is clear that here in New Zealand, branches are already well and truly on the chopping block. There is a view that manual (human) processes need to be eliminated as much as possible, otherwise you’ll be perceived as being too slow.

Decision-making can be transformed – replaced by algorithms that make far smarter decisions. For example, a legal system could easily take advantage of artificial intelligence in dispensing justice. Nevertheless, it’s difficult to know what will happen to skilled jobs that are based on human interaction. Will doctors, lawyers, engineers, and teachers face massive job losses due to intelligent systems and advances in science? In my view it’s possible, despite the centuries of relative stability and security in these areas.

For management today, building a resilient business is key, with a willingness to invest in automation early. New entrants will arrive sooner rather than later, bringing with them a high level of agility. While incumbency has a great deal of embedded value, it certainly doesn’t guarantee survival. The economics (and politics) of automation may not make sense for all at this stage, however that determination is up to each individual business. Nevertheless, if one takes a view of what’s possible at present, they simply need to multiply this out across society and other industries to see the likely changes in the coming years. It’s time to get ready. 

 

© 2016 James McDowall. Views are my own.

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