The Rise and Rise of Automation

In-DepthThe Rise and Rise of Automation

The Rise and Rise of Automation

People around the globe are worried about their jobs. A new study from Pew Research Center has found that large majorities from the US to Brazil believe it highly likely that automation and artificial intelligence will replace many jobs currently done by humans within the next 50 years.
The Washington-based firm, which surveyed respondents in 10 countries across the developed and developing world, said average citizens see a revolution coming in the workplace. In countries such as Greece, Argentina, South Africa and Canada, at least 80 percent believe that automation will make it harder for ordinary people to find work.
With vast swathes of research and forecasts from McKinsey Global Institute to Oxford University predicting job losses anywhere from the tens of millions to the hundreds of millions and in some cases billions, those fears seem well placed. They have also caught the attention of governments and policymakers around the globe.
“The numbers aren’t pretty,’’ according to Chris Gardner, a senior analyst at Forrester Research, who spoke in an interview from New York. “We are on the verge of an incredibly more significant revolution right now. It’s a perfect storm of technology, political movements and changing skillsets going on.’’
His firm predicted that automation will eliminate 9% of US jobs in 2018 alone, driven by  companies looking to “squeeze out performance” and get an edge over their competitors. That loss, it says, will only partially be offset by a 2% growth in jobs that are tipped to be created from the technology.

Fears overdone?

Looking further out, Forrester predicts that by 2027, jobs worldwide will shrink by 17%. To give you an idea of the scale of possible losses, the World Bank estimates that the total labour force in 2017 globally was at 3.5 billion.

Bank of England (BOE) Governor Mark Carney said in September that such fears about mass unemployment were overdone. Speaking somewhat optimistically at an event in Dublin, he said that new jobs would eventually emerge to replace those that were lost from automation. The central banker cited research that estimated that just 10% of jobs were at risk of automation in the UK, the world’s fifth largest economy.
His chief economist at the BOE, Andy Haldane, however, warned the previous month that artificial intelligence, or AI, threatened greater long-term unemployment in Britain than previous industrial revolutions. In an interview with the BBC, he said it was an “open question” whether the UK would see mass long-term “technological” joblessness.

Percentage of workers in jobs at risk from new technologies by country (source: REUTERS)
Percentage of workers in jobs at risk from new technologies by country (source: REUTERS)

What is Automation and artificial inteligence?

While automation and AI are often used interchangeably, automation refers to the use of technology, or robots, to make a process or a system operate automatically without human intervention. The technology in one form or another has be in use since the 1960s, particularly in manufacturing.
Artificial intelligence, on the other hand, is considered a subset of automation. First coined in the 1950s by American scientist John McCarthy, it’s a field of computer science that seeks to develop systems that can help machines to perform tasks that would normally require human intelligence, such as speech recognition or visual perception. It’s this type of “intelligent” technology that makes the headlines of newspapers and has billionaire and co-founder of Tesla, Elon Musk, warning that it could bring an end to mankind.
Then there is machine learning. While definitions vary widely, in a nutshell it uses algorithms to give computer systems the ability to “learn” from the data without being explicated programmed. Machine learning is the current application of AI.
So, how far away are we from seeing this technology make a huge impact on the global economy?

On the cusp

US research firm CB Insights say the world is on the precipice of what they describe as the world’s fifth industrial revolution. With the emergence of industry-specific AI, automation is sweeping across industries including in transport, retail, restaurants, e-commerce, marketing and software development to name but a few.
In a report published in October, the research company said that the next phase in the technological evolution was already underway, where advanced neural networks are able to “learn, adapt, and respond” to certain situations.
Michael Osborne, a Dyson Associate Professor in machine learning at the University of Oxford, says while everyone is talking about AI and robotics, businesses were still in the very early stages of adoption, with the technology yet to be really “economically valuable.”
“Today it’s more about augmentation and creating complementary activities in the workplace rather than replacing jobs,” he said in a phone interview from Oxford, England. “This is not really direct automation yet.”
Even so it was a report that he wrote with fellow Oxford University professor Carl Frey, titled The Future of Employment, that sent shockwaves around the world when it was first published in 2013. They estimated that almost half of the US workers have a high probability of seeing their jobs automated over the next 20 years.
Osborne has since said that the study did not take into account the extended lag times in seeing these technologies implemented, nor did it factor in social acceptance of humans working alongside a robot. He also added that businesses don’t yet know enough about AI and machine learning.
“There is lots of stuff happening that no one really thought was possible,’’ Osborne said. But we are “fairly early in on seeing these technologies have any meaningful impact on jobs, even in the longer term.”
He cited technological breakthroughs such as AlphaGo, a computer program developed by Google’s DeepMind unit that made headlines in 2015 after beating a human professional Go player. And Google Duplex, the tech company’s latest development in AI, which can conduct natural conversations with humans to carry out “real world” tasks.
McKinsey Global Institute also concludes that while the AI revolution is not in its infancy, most of its economic impact is yet to come.

So hot right now

Forrester Research’s Gardner said one of the biggest trends today is Robotic Process Automation (RPA), where an existing business process such as data entry or typing, is automated by a computer programme, or robot. “RPA is the hottest area in automation,’’  he said. The tasks “are automated in such a way that they almost emulate what a human will do and improve on it marginally.’’
Forrester predicted that RPA would this year add 500,000 so-called “digital workers” in the US alone, freeing up workers for other tasks. In the same report, it forecast RPA software market would double in value by the end of this year to more than $1 billion.
So it’s not all doom and gloom for automation.
McKinsey estimates that the technology could raise productivity growth on a global basis by as much as 1.4% annually. They also estimated that almost half the activities that people are paid almost $16 trillion in wages globally to do have the potential to be automated, while  less than 5% of all occupations could be fully automated. Their estimates, however, are based on the assumption that displaced workers will eventually find other employment as in previous waves of industrial change.

Bright spots

Smart agriculture robotic farmers
A study commissioned by recruitment firm Pearson, in collaboration with researchers from the Oxford Martin School, estimated that while one in five workers in the UK and the US are currently in an occupation that will shrink by 2030, one in 10 people are also highly likely to experience a rise in demand for their job.
It found that education, healthcare and the wider public sector will see an expansion in jobs, along with those in creative, digital, design, engineering and knowledge-based industries. Jobs in transport and traditional manufacturing, however, were given a less rosy outlook.
CB Insights says that 10 million service and warehouse jobs in the US are at high risk of displacement from automation within the next five to 10 years. This includes jobs like cooks, servers, and even cleaners and warehouse workers. It found that 4.6 million retail jobs were at medium risk of being disrupted while truck drivers, construction workers and nurse and other health professional were at low risk.
Oxford University’s Michael Osbourne, says the desire by companies to scale up their business is the main driver behind the rush for automation. He says they are seeking to emulate the success of the tech giants in Silicon Valley, who “started in corner of California and quickly spread to the rest of the world.”
So who is doing what? Here’s a snapshot of just a few of the industries that are investing.

Aerospace automation:

US aircraft manufacturer Boeing has partnered with AI firm SparkCognition to “help shape the future of travel and transport.” The collaboration will focus on next-generation airspace management and the safe integration of autonomous vehicles. The company has also set up a new organisation Boeing NeXT, to help develop and invest in areas such as autonomous flights.
Boeing’s chief technology officer Greg Hyslop told a conference in September that helping pilots to deal with complexity of their jobs was where aerospace and AI converge.

Automobiles automation:

Autonomous vehicles are already on the roads, albeit with humans still sitting behind the wheel of many, and you’d be hard pressed to find a carmaker that hasn’t at the very least dipped a toe in. They’re teaming up with the likes of Google, Uber and others to develop these next-generation vehicles. While fully-automated vehicles dominate the headlines, carmakers are investing in varying degrees of self-driving capabilities.
Sweden’s Volvo has become the latest carmaker to unveil their concept car, saying it could replace short haul flights between cities as people opt to be driven instead. The 360c is fully autonomous, electric, requires no driver input at all and can even be converted into a bedroom. Sweden’s transport authority has already granted Volvo permission to start testing its self-driving cars on the country’s road.

Mining automation:

A remotely controlled autonomous loader works in the mine. (image: REUTERS/Ints Kalnins)
A remotely controlled autonomous loader works in the mine. (image: REUTERS/Ints Kalnins)

From robotic drills to self-driving trucks, this is an industry that has made headway in automation and is already started to reap the benefits.
BHP Billiton, the world’s largest mining company, has rolled out autonomous drills across its Western Australian iron ore sites. They’ve also deployed so-called autonomous hauling, where driverless trucks deliver iron ore from the mines, reducing costs by around 20%. In a country as vast as Australia, they’re also investing in rail automation by building a new 4G communication system. Competitor Rio Tinto claims to have the largest fleet of autonomous trucks in the industry, which are remotely controlled from an operations centre 1,500 km away in the Australian city of Perth.

Fast Food automation:

America’s fast-food giants are also heavily investing in automation-related technology to increase efficiency and reduce labour costs.
Domino’s says its committed to being at the forefront of innovation. In addition to app development and using different payment systems, the pizza chain has invested in AI-powered virtual assistants and they’ve developed DRU (Domino’s Robotic Unit),  an autonomous four-wheeled pizza delivery vehicle. While these won’t be rolled out anytime soon, Domino says it’s a big step forward in the future commercialisation of the technology.
McDonald’s last year made digital enhancement and technology a top priority in its 2017 growth plan. In addition to developing its own user apps, it’s also upgraded restaurants across America by installing new digital ordering kiosks that will replace cashiers.

Oncology automation:

The use of robotic process automation to reduce the pressure on cash-strapped healthcare systems has already been well flagged. KPMG in a report last year, for example, said the use of this technology could see costs reduced by up to 50%.
Perhaps less well know is how automation and AI can be used in the treatment of diseases such as cancer. IBM’s Watson unit has been developing AI methodologies that digest huge amounts of healthcare data to provide insights to doctors to help treat patients effectively. Despite reports earlier in the year that doctors who used Watson were given erroneous cancer treatment advice, commentators maintain that the use of AI still holds promise.

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The future

Sophia the emotional robot. Trying to achieve Artificial General Intelligence - AGI. (
Sophia the emotional robot. Trying to achieve Artificial General Intelligence – AGI. (

While opinions differ on just how much of an impact automation and AI will have on the global economy, investment in this area is not slowing down. KPMG estimates that spending in so-called intelligent automation (including AI, machine learning and RPA)  is expected to surge to almost $232bn by 2025 compared to an estimated $12.4bn today.
As for when these systemic changes are expected to occur, the answer is still unknown but it’s a safe bet to assume it will happen at a much faster pace than previous technological waves. As CB Insights points out, it took almost a century for the shift from traditional manufacturing techniques to a computer-enabled industry and just a couple of decades for the shift from personal computers to the widespread use of smartphones, massive networks and Internet of Things, or IOT.
Commentators say the speed of automation will only further accelerate if computers can finally surpass human intelligence,  the point known as the singularity, which has been predicted by the likes of Musk and Ray Kurzweil, Google’s director engineering, who expects this to occur by 2045. For now though, it’s still relatively early days.
“Society is on the cusp of starting to experience the benefits of some of these great technologies,’’ said Amadeo Alentorn, a fund manager at Old Mutual Global Investors in London, who has an engineering degree in robotics and automated systems and a masters of computer science. “But one of the challenges the tech industry faced 20 years ago and still exists today is the large disconnect between what society expects from technology and what can be implemented.’’
Should You Fear Machine Learning? Infographic
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