Artificial Intelligence may only replace 19% of the jobs it takes

31 July 2017 Consultancy.uk

Artificial Intelligence is often forecast to create more jobs than it replaces, however a new analysis suggests that at current growth rates, AI will only cover 19% of the jobs lost after its implementation. The realignment of labour may not be confined to blue-collar work meanwhile, with AI increasingly being leveraged by consulting firms and companies to find solutions without less need for costly human input.

The continued march of innovative new Artificial Intelligence (AI) has brought with it the potential for improved efficiency of resources, heightened productivity in manufacturing, and even the potential for low-cost medical care in the developing world. However, not all the effects of the new AI revolution are thought of in positive lights.

The rise of global hacking phenomena such as the WannaCry ransomware event have undoubtedly led some to question whether entrusting machinery with large levels of control in human life is especially sensible, however far more commonly, the chief concern is that the role out of AI in workplaces will mean mass job losses.

The Office of National Statistics’ (ONS) Annual Population Survey recently estimated the UK has seen the number of manufacturing jobs nosedive by 17% over the past decade. The possible loss of 620,000 jobs was attributed by some to the advancement of cheap machinery, which enabled employers to cut costs by laying off large numbers of staff, something recent research from McKinsey & Company further supported, forecasting that even white-collar industries such as finance, insurance and information and communications, which rely on rigid systems of routine, could easily be replicated by digital technology. The consulting firm projected that while less than 5% of jobs could be entirely replaced by technology, over 60% of all work activities could be in some manner automated by 2055.

This was something also suggested by a recent report by Big Four consultancy PwC, who calculated that as many as 30% of jobs in Britain and 38% in America could be automated by 2030. However, in line with projections from top professional services rival Deloitte, which stated as of 2016 automation had created more jobs than it ended, PwC’s estimations went on to suggest that automation would continue to create work elsewhere, as the economy goes through a realignment, rather than a reduction of employment.

AI Job Analysis

However, according to new analysis from Joblift, into the UK's artificial intelligence job market, the jobs created by artificial intelligence will fall drastically short of the level required to fulfil the needs of a growing labour market adequately. The web-based providers of a meta search-engine for job-seekers used PwC’s data as a base-line for their estimations, expanding them with data gathered from their global data-base of vacancies to analyse the potential impact of AI on employment.

The analysis showed that 136,939 jobs dealing directly with AI and automation had been posted in the last 12 months, a median increase of 0.06% each month. Working on the assumption that this remains consistent with the current period of uncertainty regarding investment, particularly in manufacturing, Joblift calculated that over the next 15 years the field of AI, automation and robotics would likely create 2,535,009 new jobs in total.

With 30% of existing roles in the UK projected by PwC as being at risk of being replaced by robotics in the next 15 years. If the UK labour market continues its median rate of increase of 1.49%, until 2031, that means 13,375,363 jobs will at risk from automation. Therefore, the forecast 2.5+ million newly created roles would most likely only replace 19% of the jobs lost to automation and robotics.

Of the positions created by AI to date meanwhile, Information and Communication Technology (ICT) is perhaps predictably the most active job category, with 47% of all positions posted on Joblift in the last 12 months (64,495 vacancies) being in the sector. While ICT roles dominated, the Engineering category also understandably ranked in second place with 17,843 roles in the last year, followed by Installation, Repair and Maintenance with 5,965 positions, as manufacturing companies employed large numbers of staff to operate and maintain their new robotic workforce.

Job categories

While the most in-demand specific positions were meanwhile System Developers and Analysts (30,087 roles) which account for 22% of all vacancies advertised since July 2016, the consulting industry also saw a spike in AI-related positions being created, with Consultants and Specialists seeing 6,799 new job postings on the platform. While according to PwC’s analysis, the categories which will be most at risk to replacement by automation are Transportation and Storage, Manufacturing, and, Wholesale and Retail, there is also increasing potential for an increasing encroachment of digital disruption into more white-collar work however.

Robo-Consultancy

Consulting firms themselves have increasingly been leveraging AI themselves meanwhile, as the new technology presents the industry with the potential for low-cost, rapid and reliable analytics to better meet client demand. Most top firms have taken to investing heavily in the technology, with Accenture, among others, working with start-ups to bring cutting edge technology to clients. The consultancy aim to develop more intelligent tools while to integrating innovative technology into their pre-existing offerings, including the recent acquisition of IDefense cybersecurity platform from Verisign, part of a $1.8 billion M&A plan for the firm to boost its digital services. Accenture have already put AI to use to help their clients to improving insurance claims processing, enhanced pharmacovigilance for a pharmaceutical company and helping clients with more powerful fraud detection.

Likewise, KPMG launched Solution 49 initiative in 2016, which sees about 1,000 experts with expertise in fields as varied as cognitive artificial intelligence and robotics within the United States, Germany and the United Kingdom working to bring the advanced technology of cognitive computing to their clients to enable them to find new ways of making profit.

Most posted job roles

However, according to recent reports, Swiss global financial services company, UBS Group AG, have partnered with Amazon to leverage their innovative Alexa AI interface in a new manner that may give a few consultants cause for concern. In addition to the synthetic intelligence’s other 15,000 skills, Alexa has now been developed to the point of being able to answer economic questions for UBS clients.

While the partnership is in its early stages, the alliance between Amazon and UBS currently allows a selection of UBS’s European wealth-management clients to ask Alexa certain financial and economic questions, which the AI then answers with information provided by UBS’s chief investment office automatically. While Alexa is currently utilised to parrot advice from human beings however, AI and machine learning applications already analyse massive amounts of structured and unstructured data, before producing insights in a fraction of the time and at a fraction of the cost of consultants in the financial markets.

The worldwide market for management consulting services is estimated to be worth more than $130 billion. In the past years, expenditures on management consultancy grew on average with more than 4% per year, with the percentages picking up further have in line with the economic recovery of mature markets worldwide, meaning premiums for CEOs seeking external advice have continuously ramped up contrary to their common aim, to maximise profit by finding ways of cutting expenditure.

Corporations and governments coming under increasing scrutiny for their average consulting spend meanwhile, with the UK’s executive alone coming under fire for spending up to £600 million since 2013 on external advisory services. The development of AI in this area meanwhile could hypothetically see the consulting industry the victim of the same realignment that is already displacing manual labourers from their old jobs.

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