The future of the workforce is one of the biggest problems CEOs are facing today. It's clear that artificial intelligence, big data and modern robot technologies all help machines perform tasks that humans do. How can companies plan strategies to thrive in this world?
There are many different perspectives on what is waiting for us. Figures show that nearly half of all jobs in the US economy may disappear. Others have described how smart machines will actually create jobs - including entirely new types of jobs. Some even talk about a world of wealth where work is your passion rather than something you have to do to make ends meet.
It is important for companies to understand a wide range of opinions on this issue because it will affect the way business leaders create the future workforce. And while there will be a lot of problems in the coming years, this is the central problem. The decisions companies make today have a huge impact on their future competitiveness.
Most companies have shifted rapidly to gain new capabilities. 75% of executives around the world in a recent survey are currently strongly investing in AI and other smart technologies. And 72% say they are responding to the request of competitiveness - they recognize the need for new tools to keep up with rivals by improving productivity and finding new sources of growth. Some companies are transforming themselves into "smart businesses," in which all processes are digitized, decisions are made based on data and machines that perform heavy work - both physically and mentally.
So there is a big problem in the debate about productivity and employment. Leaders must understand the debate and prepare to address difficult questions: What new skills do we need? How should we organize? How to define a job? How can we bring people with us, in a way that benefits everyone?
These are 5 divergent opinions on this problem.
Viewpoint: There will be a Darwinian fight between humans and machines in which machines win. The AI system will undertake the core tasks of the jobs that require intermediate and high-level skills while robots will perform inferior jobs that only require low-skilled labour. As a result, there will be mass unemployment, reduced wages and economic decline. Decreased income will lead to serious consequences in places like the United States and Europe, where consumption accounts for more than half of GDP, requiring new social assistance such as basic income.
Viewpoint: Smart machines will continue to work more, but the result will be unprecedented wealth, not economic decline. AI and computing power will evolve in the next two decades to achieve a "singularity" (a hypothesis that one day machines will be more developed than humans, then we will have to change ourselves) - then machines will be able to simulate the entire operation of the human brain. The human brain will be "scanned" and "downloaded" into the computer and billions of copied human brains will do most of the cognitive work, while the robots will do all the manual work. Economic output can double every three months. The singularity could even lead to a world where few workers are required, there is a global income programme for basic needs, and people use their talents for meaningful purposes.
Viewpoint: A productivity boom has started but hasn't been collected in official data because companies are still learning how smart technologies can change the way they operate. When companies take full advantage of smart technologies, a leap in productivity will create digital rewards - creating both economic growth and improving living standards which are not included in GDP such as consumer surplus (from better and cheaper products) and values of applications and information. However, based on current trends, the rewards will not be distributed evenly, and many jobs will be replaced. To avoid negative income and unemployment effects, it's important to invest in education and training along with technology.
The Productivity Skeptics
Viewpoint: Despite the power of smart technology, national productivity growth will still be low. Combine that with obstacles from the ageing population, income inequality, the costs to cope with climate change, the United States will have nearly zero GDP growth. In the end, there's not much to do except accepting stagnation in developed economies.
The Optimistic Realists
Viewpoint: Digitization and intelligent machines can boost productivity in line with the previous wave of technology. Productivity will increase rapidly in particular sectors companies with high performance. New jobs will be created, but smart technologies can exacerbate the trends of the recent past, in which there will be a demanding increase for both high and low skilled workers. There is no simple solution, so we need to have more research on the actual relationship between productivity, employment and wages to find an effective response.
The debate on technology and employment will continue. Business leaders must follow this debate and get involved. And more research needs to be conducted to fully understand the meaning of smart technologies at work. In the meantime, companies need to take initiative to take control of what can be done to prepare themselves to thrive in this new age.