PA Consulting: Robots are coming, are we really ready?

13 January 2016 4 min. read
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The second machine age may already be distorting the modern human economy as AI and robotics start to compete more effectively with human labour, research by PA Consulting Group highlights. AI is now able to perform a number of tasks better than humans, and with lacklustre job growth in the US, those capabilities may already be having a disruptive effect. According to the firm, serious questions about the role of humanity and a vision for the future need to be considered and discussed.

The industrial revolution was transformative of both labour requirements, as well as levels of productivity. One major change related to high-skilled jobs, such as artisans work, losing out to high efficiency methods, but often lower quality (aesthetic or otherwise) products. Another change was that lower-skilled production workers moved from the countryside to the cities to find factory work that replaced their traditional jobs. As a consequence, the revolution created a high degree of economic inequality, as productivity required considerably fewer workers, resulting in mass unemployment and poor wages.

Whereas in the longer term – once legislation came in to protect workers and new jobs were created – industrialisation resulted in more jobs and more prosperity, the initial revolution created considerable disparity. Today, another industrial scale revolution might already be underway as computers and AI (artificial intelligence) systems and technologies become more and more efficient, competing for human positions. In manufacturing for instance, 25% of jobs in four primary sectors are projected to be replaced by robotic workers, while Robotic Process Automation (RPA) has already started to replace human beings, and is projected to do away with a large number of manual back-office functions in the years ahead. 

AI high level capabilities

In a recent report, titled ‘The Robots are Coming! Are you ready?’, PA Consulting considers the development of the machine age and the existential and economic threats that come with its rapid destruction of traditional jobs that many people actually enjoy doing.

Robotic masters
One of the coming changes is the development of AI, which has in recent years become considerably better at traditionally human capabilities. Image recognition is now on par with most humans, even while the number of images recognised can far outstrip human capabilities. Voice recognition and text analysis however, remain lower than human capability. In terms of ‘thinking’, AI has a stronger memory (although only particular types), and similar structured reasoning capabilities. Unstructured reasoning remains below par. Creating new ideas also remains below human capabilities, and is in many ways also fundamentally different. Communication and other modes of interacting are either similar in capability of far outstrip human capabilities, when, for instance, communication with other machines is involved.

Robotic masters

New industries
The combination of a number of AI capabilities means that these machines are capable of taking over a large number of tasks, and questions arise about the effects of it creating new economic dynamics and incentives. Capital owners for instance, driven by the demand for profit, are likely to choose for automation over human needs – even if the end result is a shrinking pool of moving consumer power as now poorly paid employees have less to spend.

According to PA Consulting, automation may already be affecting the employment market. Between 2000 and 2010 there was, for first since the end of the Great Depression, a net loss in jobs in the US. This is despite the fact that per capita gross domestic product (GDP) is one-third higher than it was 20 years ago, and the country produces 75% more goods than it did at that time. Okun’s Law – an accepted rule of thumb describing the relationship between productivity and employment – is being violated by the changes, given that as the economy grows rapidly, unemployment should decline, often by 1% for every 3% increase in GDP. According to this formula, the US should have almost full employment by now.

Impact of automation on employment by industry

Human relevancy
Staying relevant in the machine age – not merely at the level of being paid and kept out of social welfare – may mean acquiring very specialised and high levels of skill, or becoming artistic. PA Consulting highlights that human beings need to find a niece where their performance is still better than that of machines. Alongside creativity, these include areas requiring leadership, motivation, intuition, empathy, abstract reasoning and lateral thinking; they also include the skills associated with craft.

There might be some irony in the conclusion that, what the first industrial revolution destroyed – the life of the artisan whose value lay in creating unique items through craft – may be one of the last remaining bastions of human productive endeavour.