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Leaders need to understand the changes artificial intelligence could bring at a deeper level, and identify how AI may impact their organizations.

AI and the Future of Work: Don’t Panic, But Be Prepared

Leaders need to understand the changes artificial intelligence could bring at a deeper level, says Dave Wegge, interim dean of the Schneider School of Business & Economics at St. Norbert College. Here, Wegge takes a look at the changes on the horizon and helps leaders identify how AI may impact their organizations.

If you keep even a light touch on the pulse of change in the tech world, you know that one of the most talked-about tech issues today is artificial intelligence, or AI. The MIT Technology Review dedicated its November/December 2017 issue to AI. Forrester Research recently released “A Year of Reckoning,” its annual predictions for 2018, and eight of its 13 predictions dealt with AI-related technologies. At a local level, a recent breakout session at the New North Summit led by Kurt Hahlbeck and Oliver Buechse gave an excellent overview of the key elements of AI and its impact. 

So what does the growth in AI mean for you and your organization? Is your organization ready for operating in an AI world? Are your leaders prepared to deal with AI?  

The impact of AI on jobs and work
A November 2017 McKinsey Global Institute study on the future of work suggests that at least 30 percent of the work activities in 60 percent of occupations could be automated. The greatest impact will be with jobs in which there are predictable repetitive activities. Many of these jobs fall into the manufacturing and data-processing sectors of the economy.

Here in the New North, a large share of our workforce is involved in manufacturing. There could be a significant decline in manufacturing jobs over the next several years, as AI and automation begin to weave their ways into our economic structure. The primary questions for business leaders are how soon will this happen, and what can we do to prepare for when AI is fully entrenched?

There is a tendency among many to have a “sky is falling” view of the impending AI revolution, a la Chicken Little. In the MIT Technology Review (November/December 2017), Rodney Brooks argues that there are several deadly sins regarding AI predictions. One is based on Roy Amara’s Law that we tend to overestimate the impact of technology in the short run, and underestimate its effects in the long run. The takeaway here is that we see a new technology being developed and think it will create an immediate impact in the short run. What we often fail to see is that before the technology has a significant impact, it needs refining and reworking. But once the bugs are worked out, it jettisons to a substantial longer-term impact. 

As an example, the Global Positioning System (GPS) was first developed for military use beginning in the late 1970s and first used in the Gulf War in 1991. It wasn’t until several years later that it became a mainstay in cars and phones, and today provides an important aspect of new businesses like Uber and Lyft.  

Exponentialism is another deadly sin identified by Brooks. Exponentialism in computing power grew out of Moore’s Law: that the number of components that could fit on a microchip would double every year. As Brooks points out, exponentials can collapse when there is no longer an economic rationale to produce them. The example he uses to illustrate this point is that in 2007, iPods had 160 gigabytes to store music. Under Moore’s Law, with a doubling of capacity every year, they would have 160,000 gigabytes today. That is well beyond the capacity anyone would need, and as a result, the economics of producing this level of capacity collapses.

The speed by which AI can be deployed is another factor that will impact the rate by which AI will become embedded in an economic sector. While we may have the software capable of engaging in AI today, shifting an entire manufacturing plant to an automated process may prove to be a long-term venture.  

In other words, Brooks is offering us a counterpoint to Chicken Little’s concern over the sky falling. 

What can leaders do in preparation for the disruption?
First of all, recognize that with AI there will be some winners and losers, as it will impact different sectors of the economy in unique ways. In terms of employment, some sectors will lose jobs and others will gain jobs. When the United States shifted from the agricultural age to the industrial age, employment shifted dramatically from the farm to the shop floor. The same will apply now, with the shift to what Erik Brynjolfsson and Andrew McAfee are calling The Second Machine Age.  

Leaders need to understand these changes at a deeper level, and identify how they may impact their organizations. Employing foresight analysis to help get a sense of the nature of the changes and the timeframe of those changes would be a practical step.

The most significant factor you need to pay attention to, though, is your investment in human capital. Understand that your human capital may need to be redeployed in other areas, with additional resources set aside for retraining efforts. Hire people who are strategic, creative, critical thinkers and problem-solvers over those who have narrow technical skills that can be replaced by AI. 

But most of all, don’t panic. A systematic study of how AI will impact your organization will pay significant dividends for you moving forward.

Jan. 30, 2018