[first published on November 7th 2017 at http://www.thecsuite.co.uk https://www.thecsuite.co.uk/cfo/information-technology-cfo/dont-smash-the-looms-five-reasons-why-artificial-intelligence-is-nothing-to-fear/%5D
Predictions have been rife this year about the threat to jobs from Artificial Intelligence. We are warned that AI will learn how to do our jobs, thus rendering us superfluous. Should we be worried, or do fears about AI demonstrate a failure to learn from history?
The history of technological impacts shows us that fears of job losses from the automation of weaving in the 18th and 19th centuries were unfounded. The Luddites famously smashed automated looms to protest that their craft-based skills were being made redundant and that unemployment and hardship would result. The Luddites believed that technological advancement generates inevitable structural unemployment and is consequently injurious to the macro-economy. The counter-argument is that if a technological innovation results in a reduction of necessary labour inputs in a given sector, then the industry-wide cost of production falls. This, in turn, lowers the competitive price and increases the equilibrium supply point which, theoretically, will require an increase in aggregate labour inputs (Jerome, 1934). Ie the product will become cheaper and more widely available and new demand will be created. This in fact is what happened with woven goods once production was automated. The sale of rugs and carpets and a myriad of other woven products expanded enormously and a cottage industry that employed a few thousand craft people weaving by hand was joined by a huge industry employing hundreds of thousands of people in producing, storing, transporting, and selling similar goods produced by machines. Though the immediate fears of the Luddites were understandable, so incorrect were their predictions that economists coined the phrase ‘Luddite Phallacy’ to belittle any further claims that new technology would result in net job losses. And note that the craft-based industry of the Luddites was not replaced by the automated industry. Their work continued to this day where it is treated as the luxury product that it is.
By now, we 21st century people should be confident that any new technology will not create mass unemployment but will instead create jobs and boost economies. And yet, our fears remain. Fears that are stoked by the media (whose interest is not in the welfare of workers but in their ability to sell newspapers, subscriptions and advertising in print, online, and on TV.).
Five reasons we shouldn’t fear AI:
1. AI does not do the work that people do; it does the work that people cannot do
One mistake that people make when debating AI is to assume that it does work currently being done by humans. By and large, it does not. Instead, it does work that people cannot do at all, or cannot do easily, or cannot do sufficiently well in a reasonable timescale. Or it does work that is being done by machines already, but it does it much better than existing machines.
Previously, people have used digital calculators, spreadsheets and computer modeling techniques to do many of the things that they could now (or in the future) use AI to do faster and better. Those same people can now use AI techniques such as pattern recognition to meta-analyse Big Data from an infinite number of sources. An example of a machine driven process being replaced by a better (AI) machine is robo-advisory investment management services for retail customers. Current algorithm driven methods via online services have a reputation for being clunky and simplistic. AI transforms this service with a level of sophistication that exceeds enormously what algorithms can do. Result: no human replaced, but many happy humans as result.
AI is an additive technology that opens up a whole new world of possibility to government, science, medicine, technology, logistics, education, and commerce. Through AI techniques of natural language processing, machine learning, deep learning, and cognitive computing, people and organisations can better automate processes, gain non-intuitive insights into data, and manufacture ‘better things better’. Non-intuitive insights from data can generate and validate new economic, business and investment strategies. In capital and commodity markets, the more efficient use of capital afforded by using AI tools can provide huge stimuli to economies through increased capital for investment.
2. AI does not destroy jobs; it creates a huge number of jobs
Rather than causing unemployment, factories created millions of jobs in the 18th and 19th centuries. AI unleashes human potential to do more, bigger, faster and better. It allows us the ability to do the things we always wanted to do, plus a lot more things we haven’t yet considered. That is how jobs are created. Already, AI has created many more jobs than it has ever replaced. Constellation Research predicts that the market for AI will be worth $100 billion by 2020. Many of the jobs being created by AI are jobs that (could) never existed before.
3. AI creates jobs not just in its own development, but in every industry that uses it
As well as ‘pure AI’ roles there are many more jobs available in industries that are using AI to do new things, or do old things better — and in the process creating increased demand and increased job numbers. One example is cyber-security. Cyber security uses a wide range of AI approaches and techniques to keep our data, identities and money safe. These include machine learning, pattern recognition, and fuzzy logic. And yet there is a huge skill gap such that firms struggle to fill open positions. The ISACA (a non-profit information security advocacy group), predicts there will be a global shortage of two million cyber security professionals by 2019. In financial services and capital markets, AI is the science behind anti-money laundering processes and technologies as well as many other forms of risk management including ‘Regtech’, the AI based technology used to assure regulatory compliance by making sense of multiple — often conflicting or incomplete — data sources.
4. AI will not kill us. AI will save us
Rather than worrying about something that will never happen (eg autonomous robots wiping us from the face of the earth) we should focus on how many lives are being saved right now by the use of AI in medicine and surgery. Or we should think about how many hungry mouths are being fed more cheaply by improved agriculture coming from AI techniques and technologies. Or how AI is protecting your online identity and the data in our banks.
5. We will never be ready
Were we ready for the internet — part of the third industrial revolution — and everything (good and bad) that it brought us? Of course not, because we couldn’t predict the new business models that would be facilitated by such a technology, having never seen its like.
Final thoughts: The irony of change management in many organisations is that it ensures that real change never happens, because real change cannot be ‘managed’. Real change is almost always a reaction to significant change in the environment — including opportunities and threats created by new business models enabled by new technologies. Who among us can really predict everything that a large number of new technologies arriving at once could generate? Technologies such as nanotechnology; atomically precise engineering; conscious technology; a hyper-connected (and thus arguably conscious) internet of humanity; mixed reality living; synthetic biology; human augmentation; brain uploading; internet of everything; and, AI, to name but a few. None of us can come close to fully imagining all the new business, social and environmental models and opportunities that will be created by these technologies, but we can be sure of one thing: they will create huge numbers of jobs and businesses world-wide. They always do. We should be grateful for that. Please don’t smash the looms — but more importantly, please don’t be scared of them.
Originally published at http://www.thecsuite.co.uk.