The Future of Work: Implications for Boards

The Future of Work: Implications for Boards


In 1930, John Maynard Keynes predicted technological unemployment would be widespread by 2030, some feel it is more likely to be 2040, but he wasn’t far off!

Googling the Future of Work yields around 847,000,000 results in 0.41 seconds, so I guess a number of people are thinking about this! In a world of increasing information overload and overwhelm, this paper aims to summarise the key threads of several theories, and the studies they spawned, to draw some conclusions as to what Boards should be thinking about and actioning now.

First, let’s consider the advance of digital transformation and subsequent disruptions that have led us to today:

A vast array of publications on the impact of AI and robotics in the workplace points to a looming wide-scale change at a rate never seen before. On one hand, some commentators foresee a dystopian world of doom, gloom and revolution. On the other hand, technology specialists envisage a utopian world where, while machines work, people are freed up to live lives of meaning, purpose, elevated ideals and philosophical debate; all this leading to a golden age of even greater innovation. Taking Moore’s Law into account, the world of work in 2030 will be unrecognisable.

Many jobs that exist today will be vaporised, threatening the livelihood of millions of people.

Perhaps we will head to another planet, leaving Earth to the robots, as Stephen Hawking predicts. Or alternatively, we will face more of an Elysium scenario where the plutocracy, less than 1% of the world’s population, will go to an Eden created on another planet, leaving the mass poor to be dominated and eventually assimilated by the robots.

But a future less extreme, which would still impose enormous disruption on traditional business models, is more likely than those two scenarios. Writing in the Weekend Australian, Alan Kohler notes that the Parliamentary Library has produced a paper on this very subject. He debunks the myths that attempt to soften the impact of the industrial revolution. He writes, ‘the common line that those who were displaced by mechanical looms and steam power eventually got jobs is rubbish. They just died – poor and young, mostly from the lack of sanitary and medical knowledge’.

Digital Revolution 

The impact of the digital revolution will be far more severe and much faster. Medical technology will be available to keep those without jobs alive – at a huge cost. What response should governments and business be planning now to prevent up to 50% of those currently employed being, ‘thrown into idleness, poverty and rebellion’, to quote Alan Kohler again.

One thing is certain, AI, big data, cloud technology, virtual reality, robotics, sensors, accelerometers, and nanotechnology will have a catastrophic impact on the way we live, work, learn and survive. The impact will be:

  • Personal
  • Organisational
  • Societal

This paper touches on all three areas but it will focus on the likely organisational impacts and how Boards should be responding now.

In 2013, Carl Benedict Frey and Michael Osborne of Oxford University produced a report that estimates 47% of US total employment is vulnerable to automation within the next two decades.

Some, like Josh Bersin, Principal at Bersin by Deloitte, argue this is not a bad thing as the target jobs will eliminate routine, repetitive work, similar to occupations automated already, such as toll taker and street sweeper. And in many cases, experience shows that whenever jobs were automated, new jobs were created. For instance, the invention of ATMs (1980s) sent shivers through bank branch personnel globally, whereas nowadays there are almost four times as many branches and nearly 10% more bank tellers.

Rudy Karsan, founder of Kenexa, which he sold to IBM for $5bn, now at Karlani Capital and known for both his entrepreneurial and humanitarian achievements, is clearly on the optimistic side. He talks of liberating people from dull, meaningless work and foresees a world of collaboration through open sourcing and innovation.

Karsan argues that we can’t yet even conceive of what jobs we will do in the future as they are beyond our knowledge at this point; just as a farm labourer 50 years ago could not conceive of being a computer programmer. That sounds grand, but perhaps a little idealistic.

Are we all capable of this? Voltaire famously said, “Work keeps at bay three great evils; boredom, vice and need.”

Others, like Martin Ford, futurist and author of several books including “The Rise of the Robots, Technology and the Threat of a Jobless Future” claim the opposite, predicting that as machine learning and AI become more intuitive, an increasing number of white collar and management jobs will be under threat - even strategy development may become something a machine can tackle.

Kevin Kelly, founder of Wired, suggests we think of Artificial Smartness rather than AI. At present, most AI is very narrow; machines are taught to do one thing and do it well. From a slightly optimistic viewpoint, Kelly refers to “cognifying” things rather as if they were electrified (kettles or washing machines). Yet he acknowledges that the more AI is used the smarter it gets, leading to the more pessimistic views.

Andrew McAfee of MIT pointed out in “Race Against the Machines” (2012), that if Siri, Cortana and Watson improve according to Moore’s Law, in six years’ time they will be 16 times better.

While some think that humans will work alongside robots and people will be hired according to how well they can cope with AI, others believe all jobs will be done by robots, including some of those that require creativity and innovation.

Land was the raw material of the agricultural age. Data is the raw material of the Information Age. So, data manipulation and data protection are now key areas of work in the digital age. Our attention must therefore be focussed on Analytics, Cybersecurity, and Genomics.

Consider the following opinions and examples:

  • “Baxter”, the type of robot Tesla uses can learn by trial and error.
  • 3D printers can ‘print’ an entire house, and are working on printing human tissue and organs.
  • Construction Robotics, creator of the Semi-Automated Mason (SAM), has machines that outpace humans in building walls.
  • Machines from companies like John Deere use cameras and sensors to precisely plough fields, plant seedlings in the right place, and provide just enough water to keep each plant moist.
  • The first fully automated mine site is expected by 2020.
  • Insurance companies have software that can scan a photograph of your damaged car, identify the make and model, and compute the amount of the claim – while you still have the car.
  • Driverless cars will become normal by 2030.
  • Nissan has created the e-NV200 WORKSPACe, a van that comes equipped with a fold out desk, touch screen computer, wireless internet, smartphone controlled LED lights, wireless phone charging, Bluetooth audio system, mini fridge and even a coffee machine.
  • Domino’s Pizza CEO, Don Meij, is working on a world-leading drone. Having seen the first pizza delivery by drone in NZ, he expects this to be normal by the end of 2017. He also believes automation will make the world a much safer place, improving jobs, living standards, and health, so he’s optimistic!
  • Drones are commonplace in the military, distancing people from their targets, thus dehumanising killing, while saving the lives of people kept out of the front line.
  • Momentum Machines has invented robots that can make 360 burgers an hour. The quick service restaurant industry spends $9bn a year on people who make and sell burgers and they can’t produce them as quickly, uniformly, and hygienically as the robots.
  • Applebee and other restaurants in the US have replaced wait staff with table top tablets for ordering and paying.
  • In May 2016, Foxconn, the $100bn business and largest contract electronics manufacturer in the world, replaced 60,000 factory workers with robots.
  • Imagine if Walmart, the biggest US employer with over 2m employees’ switches to robots? Almost all job creation is in the service industry – restaurant and retail. Imagine how many people who rely on part-time and casual work will be affected by this?
  • In 1984, Kodak had 145,000 employees but was bankrupt, with debt of $1bn, by 2012. In contrast, Instagram had 13 employees in 2012 and Facebook paid $1bn to acquire it.
  • Narrative Sciences allows for vast numbers of articles, reports, and press releases to be generated by machine. It is estimated that within a few years, machines will write 90% of news articles.
  • Algorithms have been created that can grade high school essays more accurately than teachers.
  • Universal translator – in June 2013 Hugo Barra, Google’s top Android executive indicated universal translators would be available and usable either over the phone or in person in a few years – already they have a near perfect real time English/Portuguese translator

Ellie, a digital therapist, is capable of empathy by reading body language – and so far, studies show people open up to her more readily than they would to a human.

Extraordinary changes have happened, are happening, and will continue.

  • Healthcare
  • Machines can read radiographs more accurately than humans. They diagnose diabetic retinopathy by scanning the human eye. Surgery by robots is being trialled. Doctors, nurses, and dentists may have very different tasks in the future. The Fiona Stanley hospital in Perth has already automated its dispensary; robots deliver medications to the correct wards faster and more accurately (because they scan barcodes) than human porters.
  • Professional Services
  • Computers are increasingly capable of replacing paralegals, junior lawyers, accountants, and other professionals. IBM’s Watson is predicted to pass the bar exam this year. Discovery work and quantitative prediction are basic fodder for machine learning, so financial analysts are squarely in the sights too.
  • Even engineers are not immune given the advances in construction robotics and 3D printing. But as Richard and Daniel Susskind ask in their new book “The Future of the Professions”, do we want robots to declare a business bankrupt or to pass sentence on whether someone is guilty or not? Questions of moral ownership and accountability go hand in hand with discussions on AI. Will technology companies become the moral gatekeepers of the world?

What about Strategy?

“Recent research indicates that we are at an inflection point in how robots observe and process data, and therefore how they work with people. Roboticists are starting to reverse-engineer the human mind by translating the cognitive models that humans use intuitively into computational models that machines can use. With this approach, robots and humans working in pairs have been able to accomplish complex tasks as well or better than human teams.” Julie Shah, Interactive Robotics Group at MIT.

  • Ray Kurzweil, famous predictor of The Singularity and co-founder of Singularity University currently predicts that:
  • By the 2020s, most diseases will be eradicated as nanobots become smarter than current medical technology. Self-driving cars will begin to take over the roads, and people won’t be allowed to drive on highways.
  • By the 2030s, virtual reality will begin to feel 100% real. We will be able to upload our mind/consciousness by the end of the decade.
  • By the 2040s, non-biological intelligence will be a billion times more capable than humans. Nanotech foglets will be able to make food out of thin air and create any object in the physical world at a whim.
  • By 2045, we will multiply our intelligence a billionfold by wirelessly linking our neocortex to a synthetic neocortex in the cloud.

For many, the real question is: how do we develop AI without losing control of it? How do we adapt to a society where most tasks are executed by machines and very few humans are employed?

Even those most optimistic about new work agree that the old model of employment will die out quite rapidly, as flexibility is demanded by the Millennials and companies working to stay ahead of the game.

Furthering this, teams of talent will be contracted as needed; these companies will employ only a core handful of people.

Many agree that a Universal Basic Income will be essential in a world where most people are occasionally hired into teams. Despite soaring profits and increased productivity, the income levels of the clear majority of people in countries like the US, UK and much of Europe have dropped significantly. This is creating political reverberations and, if exacerbated by automation, will lead to a very small percentage of people able to consume the experiences, buy gadgets and drive growth, and the very real possibility of revolution. We may need to let go of the idea of continuous growth.

Scary? Perhaps, and not so far off. But what does that mean for us now?

This is where Boards come in.

  • To expand on ideas set out in a previous paper, we believe it is essential for all boards:
  • To have at least one director with strong and relevant technology knowledge and experience. This knowledge and experience is required to provide the board with a deep understanding of the relevant forces that produce significant new opportunities and major threats to the sustainability of the business.
  • To foster innovation, with a capability for truly diverse and creative thinking on the board. By inviting different perspectives and allowing time for creative thought (an inefficient process which is one of the obstacles to AI taking over many white-collar jobs, at least in the near term) great ideas and solutions are born.
  • To ensure they have access to the best talent and that they have great leadership to foster a culture that supports creativity and diverse teamwork to supercharge innovation
  • To ensure that teams are tasked to truly evaluate the cost of automation

– after all, a robot may make burgers quicker and more effectively than a human, but those humans are also some of the lowest paid, often casual workers. Do the economics make sense if you are a smaller franchise? And will customers still prefer the interaction with a human being in a bar? The CEO should have a budget and people and begin this work now, not in five years’ time.

  • To bring design thinking into the organisation – to get rid of complexity, to look at the organisation from an employee experience perspective and remove obstacles to flexible, cross-team creativity. Research shows that many employees are simply overwhelmed and thus neither creative nor particularly productive. The best companies are built around small, highly effective teams.
  • To realise that, in a truly innovative and competitive organisation made up of flexible, fit-for-purpose teams everyone must be capable of leading at some time.
“If every tool, when ordered or even of its own accord could do the work that befits it, then there would be no need either of apprentices for the master workers, or of slaves for the lords.” - Aristotle 322 BCE

Welcome to the Future of Work.


John Colvin

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