The algorithms are coming, if not to your place, then to somewhere very near you. It’s happening faster than you, or probably anyone else imagined – and it doesn’t bode well for you or your job. Whatever that is.
Over Christmas, a White House report on automation and artificial intelligence suggested (among other things) that almost all delivery and driving jobs would in due course succumb to automation, with the loss (in the US) of more than 3m jobs. Right on cue, here’s a news item describing how Rio Tinto is already using robotic drills, house-sized autonomous trucks and driverless trains to boost productivity and slash the need for human employees at its Australian mines. The trucks are controlled by operators 750 miles away. The trains, also controlled remotely, will ultimately load and unload themselves. Going driverless is 15 per cent cheaper than using humans. 'We’re going to continue as aggressively as possible down this path,' says a company official.
White-collar jobs have so far been more resistant to automation (although software is already making inroads in the media and low-level legal work). But don’t count on it staying that way. One Japanese insurance company is this month replacing 34 claims assessment workers with an artificial intelligence system. This is one of the first (and certainly not the last) commercial applications of IBM’s celebrated Watson, a ‘cognitive technology’ that can make sense of unstructured material whether in text, audio or video form. The Watson-based system will check treatments against insurance contracts and decide payouts on the basis of medical histories, length of hospital stay and other data. The company is paying $1.7m for the system, plus maintenance, and expects to post a return on the investment in two years. Watson’s first and best-known application has been in medicine, but its analytic prowess is now also being brought to bear in finance, legal and retail fields.
We’re sort of used to the idea of couriers and Uber drivers being managed by algorithms. But in ‘When your boss is an algorithm’ the FT’s sharp Sarah O’Connor points to what many have missed: in the gig economy, it’s not the workers who are replaced (although they are engaged in a race to the bottom on pay) – it’s managers who would have done the scheduling and logistics. And as managers, algorithms are remorseless and impartial in a way that hasn’t been seen since the days of scientific management a century ago. ‘For Jeremias Prassl, a law professor at Oxford university, the algorithmic management techniques of Uber and Deliveroo are Taylorism 2.0,’ O’Connor writes. “Algorithms are providing a degree of control and oversight that even the most hardened Taylorists could never have dreamt of,” he says’.
Don’t think it’s just low- and middle-level logistics managers whose jobs are on the line. The world’s largest hedge-fund firm, Bridgewater, is busy trying to enshrine its unorthodox management system in software that would ‘dole out GPS-style directions for how staff members should spend every aspect of their days, down to whether an employee should make a particular phone call’, according to the Wall Street Journal. Bridgewater founder Ray Dalio, who is behind the project, believes that humans are like machines; successful managers, he has written, ‘design a “machine” consisting of the right people doing the right things to get what they want’.
Meanwhile, a Silicon Valley outfit (of course) has developed a ‘virtual management system’ called (of course) iCEO. iCEO automates complex tasks by breaking them down into chunks and assigning the micro-tasks to workers on platforms such as Mechanical Turk, Lyft or Uber. The company admitted at the time of writing that the programme was relatively crude – but that was a year ago, and a year is an eternity in AI and robotics. And although it was still considering what to do with it going forward, it’s not hard to imagine what the powers of iCEO and Watson might be if they could be harnessed together. There’s no doubt about the direction of travel, however. Warns futurist Devin Fidler: ‘It will not be possible to hide in the C-Suite for much longer. The same cost/benefit analyses performed by shareholders against line workers and office managers will soon be applied to executives and their generous salaries’.
Further out (but probably not very much), Fidler notes that corporations are themselves a technology, one that developed in the 18th century to maximize scale and minimize transaction costs. ‘Now that structure is being disrupted by the advent of technologies which can accomplish many (if not most) of the projects we associate with corporations. With traditional organizations no longer necessary to create many things at scale, they are likely to be challenged by a new generation of alternative technologies for getting things done’.
Such as that embodied in Work Market, perhaps. Work Market is a kind of amalgam of work platforms such as Task Rabbit, Uber, eLance and the like, and its boast is that using it large companies can compile and coordinate ‘labour clouds’ of all the skills – full-time workers, contractors, vendors – it needs to get things done just in time. It believes it has built a platform that enables just the kind of radical shift that Fidler envisages – from a world of traditional corporate employment to a one where every worker acts as ‘an enterprise of one’, competing for projects on skills, reputation and ability to generate good outcomes.
To emphasize, this is all happening, and it’s happening fast. Last year more was invested in robotics start-ups than ever before. This is terrible news for jobs and the billions of people who according to Gallup yearn more for good jobs than anything else in the world – more even than peace, security and family. It is true that, as the White House report emphasizes, technology is not destiny. It doesn’t happen in a vacuum, but rather within a framework of policies and institutions that influence the choices of entrepreneurs, workers and investors that together shape technology outcomes. Unfortunately, the paper doesn’t mention the factor that most directly conditions those choices: incentives that directly reward CEOs and others making resource-allocation decisions for cutting costs rather than innovating – that is, for not creating new jobs and for eliminating existing ones. Unless states summon up the courage to disarm these detonators of job destruction, the extraordinary technological revolution now under way could end up triggering another one, of an altogether more violently disruptive kind.