Review of the Economist Special Report on Artificial Intelligence
Review of the Economist Special Report on Artificial Intelligence:
Written by William Petryk
This is a review for anyone in management to let them know why reading the April 6th edition of The Economist is a good idea. This is the issue that includes a special report on “Artificial Intelligence in the Workplace”. It should be read by anyone who needs to be aware of technological changes and how all of us will be affected by them.
In my own lifetime I have been subjected to three disruptive workplace influences. The first was the introduction of computers. These completely changed the focus of accountants. Before then bookkeeping skills were what mattered most. Everything had to balance. Afterwards everything balanced automatically. Many unskilled jobs disappeared, more advanced positions became essential as the focus shifted to analysis, and new jobs such as data entry were created. In the end we became more productive as a result.
The second major change came with the introduction of personal computers. These huge towers kept next to the desk again revolutionized the way work was done. Often in ways no one predicted. New programs were created for accounting, for spreadsheets, and for word processing. Again unskilled jobs were lost, more advanced jobs such as costing became important, and new jobs were created. And again productivity increased as costs decreased.
The third great disruption was the creation of the internet. At first it facilitated the sending of messages and little more. Later it became possible to reserve a flight, to check a bank statement, to order products and then much more. Entrepreneurs saw new possibilities and developed Facebook, eBay, Amazon, and many more applications. Once again, in ways unforeseen, we became more productive. Unskilled jobs were lost, the entrepreneurs became very rich, and new jobs were created.
Now another disruption is on its way. This one is Artificial Intelligence (AI) and it too will change the way we work, often in ways unimagined. Here are some examples of what has happened thus far. Ping An is a Chinese insurance company. It developed an app that allows customers to apply for loans visually. Their algorithm looks for 50 different facial expressions to determine if the applicant is lying. Johnson & Johnson and Accenture use AI to scan job applications. Their algorithm does the job more thoroughly and quickly than humans are able to. It allows their HR staff to concentrate their efforts on the people with the right qualifications. Amazon uses AI extensively. Anyone who has ordered from Amazon is aware of the purchase suggestions that follow. Few people know that their system also predicts demand and is useful for stocking decisions.
So what is AI and why is it becoming so popular. By definition, AI involves computers crunching vast quantities of data to find patterns and make predictions without being explicitly programmed to do so. It is possible because computer power has expanded to the point where it can do this cheaply and quickly. All that is needed is a vast database. These are generated by government agencies and large corporations. But the largest are compiled by three companies: Google, Amazon, and Microsoft.
However, no organization will invest in AI unless there is a profitable application. Some have already been developed. HireVue is a startup that uses videos of job applicants answering a set of a set of questions. It assesses the responses to predict their suitability. General Electric and the Boston Red Sox are two of their customers. Another startup called Pymetrics gives job candidates a set of games to play. On this basis it assess them on 80 traits such a memory and attitude towards risk.
In the workplace a company called Humanyze is promoting what it calls people analytics. Employees wear credit card size badges that monitor their activities. This does have legitimate applications such as workflow design and monitoring customers’ interactions. However, it can be misused. So the privacy of employees will become important and what a company has a right to know must be determined. As well as what will be done with all the data generated. Already Facebook has lost share value for its indiscrete use of data entrusted to them. In the future data security and the rights of privacy will become more important.
Looking at my own work history I can tell that, although I am at a senior level, there are thing I do that an algorithm can process much more quickly. Things like fact checking, comparing past statements with current ones and determining what caused the difference, or looking for obvious errors such as expense entries in asset accounts. Ensuring that the algorithm is working properly and updating it so that new conditions are taken into account will become more important and will likely be one of the new workplace tasks created.
As stated before, the values of Google, Amazon, and Microsoft will increase. They will become the most valuable companies in the 21st century. All three of them now sell pre-trained models that clients can use to build AI enabled systems. This market will grow and those who can develop useful applications will become very rich. In the end many low skilled workers will lose their jobs, new jobs such in data analysis will be created. Productivity will increase, companies will become more profitable, and the way we work will change again.