5 October

Automation of UK Services

The Impact of Automation on the UK’s Service Sector.

The participation of smart machines in the tertiary sector is no longer a futuristic dream – it’s becoming common place. Uber’s self-driving truck, for example, delivered a cargo to Budweiser by travelling 200km interstate in the US in 2016. Or Amazon Go, the shop operating checkout-free in Seattle since January 2018. These are admirable technological achievements, no doubt. But in the UK, the service sector plays an enormous role in the economy –it comprises nearly 80% of the UK’s GDP and 70% of its entire workforce (Economics Help). So it must be asked: how might the automation of services affect this rainy island that is home to 66 million people?

Automation and AI

Automation is a term often coupled with AI. That hasn’t always been the case, and they are far from being the same thing. IBM’s Vice President Elli Hurst explains: “In its simplest form, automation is creating an automatic process to complete a transaction or job”(IBM). Setting an alarm on your phone is an example. With automation, humans are involved in the front-end of the process, deciding what the device or robot should do next.

AI, on the other hand, is about the device or robot being able to make decisions. AI “has the capacity to understand all forms of data – including unstructured text, images, audio and video”, Elli continues. This means that AI can “reason”- such as by analyzing users’ personalities, tones and emotions to provide personalized recommendations. AI can also grow its own subject matter expertise and even interact in natural language, explains Elli referring to IBM’s artificial intelligence platform Watson as an example.

When coupled, automation and AI can provide smart and efficient services. This possibility of integrating technologies is relatively new – differentiating the Fourth Industrial Revolution from the Third – and is dramatically transforming the way businesses operate. We’ve heard plenty about automation in manufacturing. Now, with ‘smart automation’, it is time to talk about services.

Consequences of automation for the tertiary workforce

A PwC 2017 report found that up to 30% of existing jobs in the UK could be impacted by automation within the next 10-15 years. But in many cases, this impact will be felt in the nature of tasks, rather than in the number of jobs in demand. John Hawksworth, chief economist at PwC, explains that “manual and routine tasks are more susceptible to automation, while social skills are relatively less automatable. That said, no industry is entirely immune from future advances in robotics and AI” (PwC).

On a more comforting note, John also observes that employment rates in the UK are now at its highest since records began in 1971. This shows that, so far, advances in digital and other “labor-saving technologies” have not rendered human workers irrelevant, but the opposite. Unfortunately, this is no guarantee of what is to come. But we can expect AI and automation to boost the economy, escalate productivity, improve consumer’s experience, and, as a result, increase GDP.

Meanwhile, a Deloitte study has shown that the UK’s tertiary sector, specifically, will be heavily affected by automation in the next 20 years, with transportation and storage services accounting for 74% of displacements (Deloitte). Understandably, some resistance against automation can be expected from workers and those concerned with the ‘political correctness’ of this shift.

Another concern points at the increasing loss of human interaction, as expressed by The Guardian: “such connections, fleeting as they are, can be life-saving for the chronically lonely and good for others too, reminding us that polite interaction matters as much as getting what we want this second”. So, how good is too much efficiency?

But although many might resist against terms like automation and AI, they most likely use these technologies already –and even favor them over traditional services at times. One example: banking. Online banking and ATM machines are irresistibly convenient automated services. They decrease the time spent commuting to banks and waiting in line, and allow transactions to be made even while banks are closed. This is to say that, although conversations regarding automation’s impact on workforce transitions are usually framed in the future tense, smart automation is very much a part of our daily lives already.

Steady and gradual transformation

20 years ago, there were no smart phones in the world. Can you name one adult in the UK who doesn’t own one today? Even children as young as 5 are walking around with their connected iPads. This represents a massive shift in how we socialize, communicate, and work. Yet, it can be hard to notice and analyze these changes while they are happening. Similarly, the workforce transitions that automation and AI are causing “will not displace employees overnight; its impact is gradual and manageable and there could well be social or political resistance to the full deployment of technology in place of people” (Deloitte).

With this in mind, Jon Andrews, head of technology and investments at PwC, recommends that employers “encourage flexibility and adaptability in their people so we are all ready for change”. He also explains that “it’s impossible to predict what jobs there will even be in the future, so life-long learning and a positive attitude to embracing change needs to be a fundamental aspect of the UK’s future success”.

It is important to remember that AI and automation are still in their early days. As explained by journalist David Rotman, “driverless vehicles are fine on sunny days but struggle in the fog or the snow, and they still can’t be trusted in emergency situations. AI systems can spot complex patterns in massive data sets but still lack the common sense of a child, or the innate language skills of a two-year-old. There are still very difficult technical challenges ahead. But if AI is going to achieve its full economic potential, we’ll need to pay as much attention to the social and employment challenges as we do to the technical ones” (Technology Review).

It is clear that AI can dramatically improve the economy and convenience of everyday life. What remains to be understood, however, are their social implications. Are the economic benefits going to be widespread and fair? Justifying the replacement of automatable jobs with the creation of new ones is simplistic and doesn’t present a solution to the problem -there is no guarantee that displaced workers will be integrated into the markets of the future. It’s time to think of strategies to ensure that everyone benefits from this digital, connected, and ‘smart’ transformation.

If humans have the capacity to create and fabricate ‘reasoning machines’, surely we must have the capacity to solve the problems we create. The question is: is this concern in your agenda?

Research sources:

IBM
WEF
PwC
EconomicsHelp
Deloitte
Raconteur
SalesForce Report
Adweek
Pegasystems
Technology Review

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