Tech: Saint or Sinner?

Over the next decade, automation will bring about a business transformation. Developments within robotic technology and artificial intelligence (AI) are changing business models, economies of scale and the effects businesses have on the planet.

Let’s look at how these two technologies will help businesses automate processes, drive productivity and increase sustainability.

AI has the potential to solve problems that humans and current systems cannot. The technology’s capability to create new insight, learn and automate tasks on a large scale has enormous possibilities to transform industries and business operations. AI can improve the efficiency and speed of business models by taking on responsibility for more routine work at a lower cost.

Meanwhile, robotics is revolutionising business models in industries all over the world, from healthcare to agriculture, and is on the precipice of enabling economic growth on a global scale. Automating more and more tasks using robots improves efficiency and lowers production costs, in addition to reducing the number of human operators required. These automated production systems are becoming increasingly flexible and intelligent, continuously adapting their behaviour to maximise output and minimise cost per unit.

AI has been progressing at a rapid pace as software becomes more advanced. AI will enable a number of the disruptive business model levers, including: a more personalised product or service, based on deep customer insight from multiple datasets and learning preferences over time; a closed-loop process, allowing more effective and efficient production and consumption at a scale and complexity that is beyond existing approaches; and an agile and adaptive organisation able to effectively utilise customer, market and operations data, and to anticipate how best to adapt and respond to changing needs.

AI can also help us tackle some of the world’s biggest societal and environmental challenges. Artificially intelligent machines are able to sift through and interpret massive amounts of data from multiple sources. For example, the forest monitoring project Global Forest Watch and the tech nonprofit Rainforest Connection use machine learning to identify factors that contribute to forest losses in the Congo and the Amazon. Other examples include IBM’s Watson, which supports oncologists by providing analysis of a breadth of research that no human doctor could ever hope to read. Meanwhile, AI’s capabilities to analyse high-resolution images from satellites, drones or medical scans have the potential to beneficially affect responses to a wide range of global challenges, such as humanitarian emergencies, agricultural scarcity and climate impacts.

Robotics technology has also been evolving quickly, and the costs of incorporating it into a business are dropping. Once robotics is integrated into a business, it can instantly help to reduce running costs. Advances in technology such as distance, force and proximity sensors enable robots to recognise and respond to their environment, which in turn can be extremely beneficial to streamlining industrial processes and conserving resources. Robots can also use software and algorithms (including AI) to interpret the data collected and to further enhance processes. Automating more and more tasks using robots improves efficiency and lowers production costs, in addition to reducing the number of human operators required.

It’s becoming increasingly evident that robots are also key players in the move towards a more sustainable economy, particularly in the areas of climate change, recycling and energy use. Through improved recycling via robots, for example, more of the earth’s natural resources can be reused. The sorting robot at the Recon Services recycling plant in Austin, Texas, has two arms with ‘smart grippers’ and has increased the recycling rate by up to 70%.

Robots are also breaking through into the manufacturing sector in a big way by reducing waste and energy, while increasing productivity, efficiency and product quality. They also aid businesses with energy-saving because they don’t require as much energy to operate as humans do. We need facilities with sufficient lighting and heating, but robots can work in cold, dark conditions. This drastically reduces the amount of energy used in the manufacturing production process. In fact, it’s estimated that swapping humans for robots can save up to 20% in lighting energy alone.

AI has seen enormous growth in recent years. According to the United Nations’ Global Compact’s Project Breakthrough, as of 2020, the estimated AI market size is $6.1bn and estimated spending on AI technologies is $47bn. The global market saw a 283% increase in published patent applications involving AI from 2010 to 2016. By 2025, the market is expected to surge to USD $126bn.

The estimated market size of the robotics industry is $82.7bn, with estimated spending at $188bn. This is expected to grow at a rate of 25.38% from 2020 to 2025. The costs of robots are likely to drop even further as demand from emerging economies shifts the production of robots to lower-cost regions.

Automation will be a key way for businesses to drive productivity, efficiency and sustainability over the next decade. The good news is that these technologies are great for business and the planet. Businesses will need to adapt fast in order to thrive.

The world is currently in the throes of the Fourth Industrial Revolution – one fuelled by advanced technology. Like the three that preceded it, driven by steam, electricity and computerisation respectively, the age of automation is bringing transformative change that is redefining the way we live and work. From self-driving cars and smart devices that connect in the communicative hub known as the Internet of Things, to robot hotel staff that are immune to COVID-19 and intelligent virtual assistants, innovation is propelling us towards our future faster than at any other time in our history.

“The speed of current breakthroughs has no precedent,” wrote Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), in 2016. “When compared with previous industrial revolutions, this one is evolving at an exponential rather than a linear pace. It is disrupting almost every industry in every country and transforming entire systems of production, management and governance.”

The era of automation has brought the world bountiful benefits. However, for all that, there have been, and will continue to be, casualties – namely those who are denied access by age, poverty, poor education or geographical location, and those whose jobs have been or will be displaced by technology.

Jobs in sectors including manufacturing, retail, fast-food services and banking have already proved to be extremely susceptible. Statistics released by the Office of National Statistics in 2017 showed that, between 2011 and 2017, 25.3% of supermarket checkout jobs were lost to robots; 39% of jobs at risk were held by people whose educational attainment level was GCSE or below; and 1.5 million workers in Britain were likely to lose out to machines, with women and those in part-time work most affected.

More recently, WEF’s The Future of Jobs report, published in October 2020, estimated that 85 million jobs could be lost by 2025. And though the long-term forecasts anticipate job creation on an even greater scale (for example, in cloud computing, artificial intelligence (AI), the green economy and the care sector), the immediate impact on unskilled workers could be devastating – particularly when the effects of the pandemic are factored in.

In all likelihood, this will lead to greater inequality in the employment market, with lower-waged workers taking the hit. As the report says: in light of the pandemic, and with “businesses accelerating the digitalisation of work processes, learning, expansion of remote work, and the automation of tasks within their organisations”, job creation is starting to lag behind job destruction, and this is likely to affect disadvantaged workers with “particular ferocity”.

Labour MP and former Shadow Home Secretary Yvette Cooper raised concerns about how technological advances could change work for the worse when she chaired the Commission on Workers and Technology in 2018. “Manual or low-skilled workers could find themselves downgraded into increasingly insecure and worse-paid jobs, while new technology – such as the electronic wristbands patented by Amazon – could monitor how quickly staff work.” Far from relieving people of menial tasks, she said, “technology could be used to force them to work as if they were machines”.

Cooper’s comments on how humans could be enslaved by machines are tame compared with those made by Elon Musk, founder of SpaceX, CEO of Tesla and co-founder of OpenAI, who has described AI as the biggest “existential threat” to human civilisation. Musk has said that AI, which he believes will be vastly smarter than humans within five years, could subjugate rather than serve us, potentially turning us into “household pets”.

This, he warns, is one possible outcome if humans do not remain in control, by imposing stringent regulation to police the industry and developing brain-machine interfaces that could prevent AI from becoming artificial superintelligence. That, ultimately, is the biggest fear concerning AI. It is not that jobs will go – they will, and in time will be replaced by others – but that robots will outwit and then govern us.

How likely that is is in dispute, as the world’s greatest minds demonstrate. Professor Steven Pinker, experimental psychologist, disputes Musk’s assertions. Pinker doesn’t believe that highly intelligent robots will follow in our competitive, survival-of-the-fittest footsteps. “Unless we programme them with the goal of subjugating less intelligent beings, there is no reason to think they will evolve in that direction, particularly if, as with every gadget we invent, we build in safeguards,” he says.

Whatever the future holds, for now humans are still in control, as demonstrated by the Henn na Hotel in Nagasaki, Japan, which laid off half of its 243 robots for being annoying and unhelpful.

Malfunctions aside, WEF’s assessment of where the fourth revolution will lead seems a perfect summation. “The past decade of technological advancement has brought about the looming possibility of mass job displacement, untenable skills shortages and a competing claim to the unique nature of human intelligence now challenged by artificial intelligence … As the frontier between the work tasks performed by humans and those performed by machines and algorithms shifts, we have a short window of opportunity to ensure that these transformations lead to a new age of good work, good jobs and improved quality of life for all.”

The ICAEW Library & Information Service provides access to leading business, finance and management journals, as well as eBooks.

Further reading on the effects of robotics and automation on businesses and the workplace is available through the resources below.