The Robots versus the Humans – how AI will impact the economy ?

The UK Government issued a report on the threat of robots taking over our jobs as concerns in the increasingly rapid growth of Artificial Intelligence AI advances. How big a threat is it? What jobs will be taken or will it create, new jobs, new products, markets?

The issue of robots taking over humans has been “encoded” into the popular culture with the likes of the Terminator Sci-Fi films and more recently the rise of driverless cars and the creeping immergence of automated speech answering services and self-service through digitization of common tasks from banking to ordering food. The claims of 47% of low and semi-skilled human jobs replaced by computer algorithms in the next two decades (1) to the “master race of computers” of super intelligence dominating by Nick Bostrom (2) and perpetuated by Stephen Hawking, Elon Musk, and others is perhaps grounds for an early alarm bell.

It is about the new digital economics

The threats may be not immediate but the Whitehall enquiry is welcomed. This is relevant because if the digital economy continues to grow at the double digit rate the impact on the real economy to create human jobs will occur on three key areas. Firstly, Low and semi skilled work could be squeezed and reduced impacting on the less well-off of society; we are already seeing this with retail stores automating checkout tills and stock tracking with RIFD tags to self-service in ordering and sales enquiries. Perversely the likes of Uber and Airbnb are “making taxi drivers” and “hotel operators” of us all creating new jobs but in reality it is more a sign of the increasing zero hours contract workforce; the increase in overqualified graduates chasing the potential fall in opportunities of job income and security in part driven by “smarter” digital automation. This has a direct impact on tax generation ability from those who are still left the job market and the income governments can collect.

Restructured markets and job skills

Secondly, and less obvious, is the shift and relocation of “knowledge” that smart devices and automated intelligence is driving. I see a high profile example of this underlying reason in the recent Google restructured to Alphabet, while simplifying the corporate research portfolio it was also a focus on speeding up advanced in smart technology and robotics and cars as the new market for cyber intelligent products. Apart from the “brain drain” this creates in countries not able to compete with these huge R&D centric cloud companies, it is more the impact how wealth and skills will be distributed in the global economy and how governments must protect their economies and incomes.

To Be or not AI of Artificial intelligence

A final impact is the paradox of the new “arms race” for companies and governments to develop artificial intelligence empowering many industries from defense to financial and medical research while at the same time “removing the human from the equation” to create advanced analytics and superior design and performance. This can potentially evolve to replace complex expert jobs that were once thought untouchable by AI computing; we already see this emerging in creative mathematical research, advanced massive scale supercomputing to model human brain function in Bioscience research or accurate global warming predictions. So it’s not all negative and could expand human kind abilities beyond the physical.

Impact of AI Robotics on Business and SMEs

Overall long term could be bad for existing Enterprises who are human task centric, but could create new markets for SMEs and larger Enterprise in specialist AI skills.

The massive growth of the internet connections and explosion of data and internet of things will create large opportunities for specialist SMEs to development algorithms or resell Artificial Intelligence services to business. This will accelerate as more marketplaces for innovation become the “norm” for corporations seeking to get more ideas and solutions into their business. SMES that focus on AI such as natural language processing for smart workflow management to specialists in complex algorithms for unique analytics with success in this market.

The down side is that the cost of advance AI may increase and price SMEs out the market; examples like IBM Watson are massive investments to offer large scale AI services. But experience also shows that new AI solutions are coming on the market all the time by innovators that may target more cost effective offers.

The key issue is the replacement of the Enterprise tasks for order processing and managing work and content by AI automation is a real issue. Examples such as financial and administrative Outsourcing and Out-tasking that are heavily human resource centric will be impact. Areas such as product design services, health human contact in the community services to specialist engineers and medical doctors and clinician support and legal staff may cut into the freelance market with AI robotics that but this remains unclear today but possible. It is notable that the largest areas of academic research literature is in medical robotics, transport automation, Product design and 3D printing AI defense robotics, cyber security AI and finance AI sectors.

A new Human-Machine Ecosystem

It is not all doom and gloom, I think there are several generations of development yet before the physical world of humans is replaced with fast and cost effective cybernetics alternatives, but it is right to consider the ethical and economic repercussions of this inevitable technological scaling of computing. We need to start now to put in place controls and managing it for the creators, the humans benefit.

1. The future of employment how susceptible are jobs to computerization? , Carl Frey, Michael Osborne. The Oxford Martin Institute, UK, September 2013 http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

2. Superintelligence, Nick Bostrom, 2014http://www.nickbostrom.com/views/superintelligence.pdf

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