The labor market always seeks to remove inefficiencies, and it is true that whatever can be automated will be. This has been true since the 1770s, when textile factories became the first to succeed with mechanization, ushering in the industrial revolution and delivering advances across industries, building great fortunes and elevating the life of the average worker.
Artificial intelligence (AI) will define the next industrial revolution, delivering similarly game-changing benefits to companies and workers through efficiency and improved human capital allocation. Investors recognize this, and the record-breaking capital flows into the AI market underscore the awaiting opportunity.
However, with revolution comes uncertainty, and the consensus is that AI will lead to job loss. A recent Harvard Business Review article stated that 82 percent of people fear that AI will create job losses, and an Oxford University study cited by the Economist says that 47 percent of American jobs could be “substituted by computer capital.” Recent research from McKinsey suggests that AI “could automate 45 percent of work activities and that 60 percent of occupations could see 30 percent or more of their constituent activities automated.”
So, with these sobering statistics about AI taking over jobs, why would anyone feel upbeat? The reason is that efficiency gains from new technologies almost always provide more benefits than downsides.
Automating blue-collar jobs
While it’s true that some jobs are likely at risk, especially ones where the complete task can potentially be automated with AI (things like replacing taxi drivers with self-driving cars), AI will free up workers for high-value activities versus tedious, repetitive tasks.
Jobs like retail sales respond well to partial automation, which can lead to job growth. For example, McKinsey shows that deployment of bar-code scanners and point-of-sale systems in the 1980s reduced U.S. per-store labor costs by an estimated 4.5 percent and the cost of groceries by 1.4 percent — yet cashiers were still needed. Their employment grew at an average of more than 2 percent between 1980 and 2013, illustrating that even when occupations are partly automated, overall demand for remaining activities will likely continue to grow.
Many jobs still require the decision-making, creativity, communication, and social skills that only humans can provide. And when humans are freed from the drudgery in their jobs, they can actually accomplish more and are thus more valuable.
In the white-collar world, jobs are not as easy to automate, but AI technology will make those jobs more efficient and productive, too. For example, large amounts of the repetitive work in industries like health care and banking consists of simply accumulating and processing data. Collecting patient medical data and gathering financial reports can be easily accomplished by AI, and emerging technologies like natural language processing (NLP) and machine learning (ML) will make the process more seamless, natural, and automated.
In these industries and others, AI will handle routine tasks that were once only doable by humans, such as reading and interpreting emails and reports. This will enable employees to focus on higher-value tasks. For example, instead of a customer service expert responding to yet another request to reset a password, he or she can let the AI respond to that request and focus on more complex troubleshooting. Bankers and financial analysts can concentrate on revenue-generating activities rather than sorting through reams of data and compiling spreadsheets.
In a similar way, leveraging AI for sales and marketing gives companies the ability to drive topline revenue. Automating the interaction between leads and salespeople frees up human capital, meaning that each salesperson can spend more time closing deals, rather than prospecting to create those deals. Automation offers a way to generate more revenue through an overall higher volume of inbound leads, and with greater revenue comes more hiring and greater investment in marketing to generate those leads. AI also enables creation of high-performance sales teams that task AI with “daily grind” prospecting and take all of the rejection, passing only the best leads to salespeople. Sales can then be more consultative, focusing on delivering the most appropriate solutions to customers rather than focusing on potentially outdated metrics.
With routine tasks automated, energy can be applied to tasks that require the judgment and emotional intelligence that robots simply cannot provide. Workers can be confident of a place at the table, because human-centric cognitive and social skills will always remain key to success, especially in high-value functions. McKinsey further suggests that “understanding activities most susceptible to automation could provide a unique opportunity to rethink how workers engage with their jobs and how digital labor platforms can better connect individuals, teams, and projects.”
The emergence of AI presents leaders with an opportunity to challenge ourselves and to think about how many of our own activities can be more efficiently executed with help from machines. This will provide us with the freedom and time to focus on core competencies that can’t be replaced by a robot or algorithm. At least not yet.