The consensus which emerged from the 2017 Davos Conference seems to be that Artificial Intelligence will fundamentally change our economy and society, and that this will happen much sooner than most of us think. The question that remains, however, is how businesses, governments and individuals should deal with this inevitable disruption.
Microsoft CEO Satya Nadella believes the disruptions businesses face today are more about speed to market than automation per se. In order to survive, therefore, enterprises must undertake a radical shift in strategy. As IBM Watson Chief David Kenny explained, in order to stay competitive, businesses must grasp the fact that AI is not merely an extension of their IT or Digital strategy, but rather a fundamental part of every decision they make.
Adam Elster, President of Global Field Operations at CA Technologies agrees that companies must adapt their business models to drive new areas of revenue and growth. “With digital transformation, the biggest factor is time: how fast can companies transform and bring new products to market.”
Many of the world’s current and future problems identified by the event’s agenda – which included themes such as “Decision by algorithm” and “AI and advanced robotics” – had their roots in this rapid pace of technological change. “Trade is not to blame for job losses.” The real problem, according to John Kerry’s keynote, was automation.
Statistics point to the fact that roughly four out of every five job losses in the US has been the result of technological change, and Salesforce CEO Mark Benioff warned of “digital refugees” created by the faster-than expected pace of AI advances. Yet many speakers at Davos struck a more positive tone, saying that AI will generally augment rather than replace humans, and that over time it would create more jobs than it eliminates. “Advances in artificial intelligence will lead to job losses, but new forms of employment will take their place,” said IBM CEO Ginni Rometty. “There will be more employment, just different,” agreed Dow CEO Andrew Liveris. The real challenge we face, however, is to educate and train our workforce to not only cope, but take full advantage of this change, ensuring that the benefits in productivity are shared more equally across society.
The populist trends which materialized dramatically last year with Brexit and the US election of Donald Trump illustrate the unease and resentment around the disruption caused by globalization and automation. The UK Chancellor of the Exchequer Philip Hammond said in a recent article for the Washington Postthat automation represents a particular challenge for lower-skilled and older workers, who feel less able to embrace technology and learn new skills.
The WEF’s Global Risks 2017 report warns that, as a result of AI and other disruptive technologies, long-term jobs are giving way to self-employment in the “gig” economy, leaving individuals to shoulder more responsibility for the costs of sickness, unemployment, and old age. This has – the report claims – been the major catalysis for anti-establishment voting.
Nadella agrees that the benefits of technology have gone mostly towards highly skilled workers and capital owners, and argued for the need to redress this balance. As President Obama said in one of his last interviews before leaving office, we should devise a “new social compact” which protects people from sliding into poverty as a result of technological progress.
“…At some point, when the problem is not just Uber but driverless Uber, when radiologists are losing their jobs to A.I., then we’re going to have to figure out how do we maintain a cohesive society and a cohesive democracy in which productivity and wealth generation are not automatically linked to how many hours you put in,” he said.
This fundamental shift from a scarcity-driven economy to one that thrives on surplus requires us to rethink the structures around which our businesses operate, allowing for more inclusive growth and better distribution of that surplus. Which is why we’re seeing the concept of universal basic income (the idea that the state automatically pays people the minimum they need to live) gaining traction not only in Europe, but amongst Silicon Valley companies as well. Both Nadella and Benioff have voiced their support for it, as has Vishal Sikka, chief executive of IT services group Infosys.
In order to start building this brighter, more inclusive future, however, the technology industry must first address its credibility crisis. Hewlett Packard’s Meg Whitman said that there is a general sense of distrust of institutions and the changes brought about by technological change. And as part of this we’ve seen moves in Davos such as IBM setting out its principles for transparency and trust in the cognitive era.
Building Skills for the Future
Cecilia Reyes, chief risk officer of Zurich Insurance Group, however, warns that the anti-establishment narrative will continue to gain traction unless there is proper governance and reskilling of workers to counter the immediate effects of automation on jobs.
This reskilling requires a shift towards creative skills which – as PwC CEO Bob Moritz pointed out – will remain in demand because they can’t be easily coded. “Robotics and computers and coding gives you a very straight and narrow path to go down a fine course, but the world we live in today is a lot more zig zag, and people are going to be important to that equation to solve for those problems,” he said.
Yet MIT Media Lab Director Joichi Ito believes the biggest obstacle in achieving this is an antiquated education system that is not dynamic enough to cope with the pace of change. He says traditionally valued skills such as the ability to follow instructions and memorize facts are ripe for automation, and reliance on these leaves us extremely vulnerable to AI disruption: “If a computer could answer what you’re teaching a kid, you have to ask why you are teaching it,” he said. This view was echoed by venture capitalist Kai-fu Lee, who pointed out that “anything that requires ten seconds of thinking or less can soon be done by AI or other algorithms.”
This, argues Cylance President Felix Marquardt makes a complete overhaul of the education system an imperative:
“Our schools are still primarily churning out job seekers, when what we need is for them to churn out job creators. Entrepreneurship needs to be much more seriously taught,” he said.
As the Davos Economic Forum came to a close, there were perhaps more questions than answers, but there is no doubt that the technology community must collaborate with policy makers and the public to find solutions that work for everyone. As Nadella concluded: “We need tech break-throughs; we need AI. “If we don’t get it right, we are going to go into a vicious cycle.