Features | News
10 Jun 2018
AI and the rise of employment opportunities
Evidence shows us that if technology really destroyed jobs, today there would be no work for anyone.
Technology has created more jobs than it has destroyed. That’s according to 140 years of data presented in the Deloitte economic survey of census results in England and Wales. Yes, jobs have become obsolete in that period. But the technological advances that killed them have also boosted spending power to create new demand and new jobs.
Our employment fears are not a product of the modern age. Every generation has shared our worries, from the time our ancestors first clapped eyes on the horse collar in the 12th century. But the McKinsey Global Institute report Jobs lost, jobs gained: Workforce transitions in a time of automation demonstrates that, in spite of constantly recurring concerns that new technology will destroy jobs, the opposite is true.
Specific jobs will go, there is no doubt about that. The Oxford University study, The Future of Employment, shows that almost half of today’s jobs could potentially be replaced by automation in the next 20 years. But this doesn’t mean that almost half of the population will be out of work, as the new working environment in its turn creates new employment.
Learning from history
“Think back to the start of the Industrial Revolution when we made the discovery that if we combined efforts we could make things more efficiently than if we were all working individually at home,” says Parry Malm, CEO of Phrasee, a marketing technology company that is revolutionising the sector with its AI advancements. “Back then you had the Luddites who were taking hammers to machinery to stop these machines taking away jobs. What happened since is the greatest economic growth and job creation ever seen.”
He’s not arguing that Phrasee’s technology of choice – Artificial Intelligence – won’t reduce the number of jobs and job categories available. It will. Because, as he explains, “there are certain jobs that intelligent technology can complete better than humans”. Like, for example, the Phrasee software that uses AI to write email subject lines better than humans can, optimising the lines to grab the reader’s attention and increase email response rates for customers. So far the technology has increased revenues for Virgin Holidays to the tune of several million pounds.
“But will AI create new jobs?”, he asks. “Absolutely, and we don’t even know what these jobs are yet.”
Employment in this brave new world
One new job category created by Phrasee is that of language technician, which offers linguistics graduates and post-graduates a whole new employment route. Molly Elisha-Lambert is one of them – the Language Technical Lead at Phrasee who graduated two years ago with a BA Hons degree in English Language and Linguistics. Her job involves supervising the use of the company’s grammar-building tools and training new team members in this rapidly-growing organisation.
“When you study linguistics, you assume you won’t be working directly in that field afterward unless you go into traditional areas like teaching or academia,” she explains. “The job I do now didn’t even exist until three years ago.”
AI has given her, she explains, a very unexpected opportunity. “In school, I was really interested in both science and English and because I’d always liked that combination of language and analytics, my ideal job would have been something that combined both. I never dreamt it would happen though.”
It’s proof that the brave new world of technology will not be the exclusive preserve of the techies. Parry Malm points out that less than half of Phrasee’s entire workforce are technical people, with the remainder employed in sales, marketing, accounting, HR and management. The rising technological tide lifts many boats.
What about the robots?
So far, so reassuring. But what about the robots that are coming for our jobs? There is a worry that today’s advanced technologies will have a much more profound impact on jobs and society than the technologies of the past.
Not according to Susan Lund, a partner at the McKinsey Global Institute and co-author of the Jobs lost, jobs gained report. “We tallied up all the jobs destroyed in the US since 1980 as a result of the rise of personal computing and the internet, and it’s about 3.5 million. But when we add up all the jobs created, we find that over 19 million jobs have been created as a result.”
What is needed therefore, is large-scale employment transition because globally, according to Lund, up to 375 million people may need to learn a new occupation. And this will present huge challenges in terms of skills and training.
Building the right skillsets
“We don’t know what skills are going to be needed for the future,” stresses Parry Malm. “What people need is a broad education.” Which, unfortunately, appears to be the opposite of what education is currently providing.
“Higher education is becoming very functional and focused on hard skills, with less emphasis on softer things like history and language skills,” he explains. “What we need is a generation of people who are not driven by specific skills but who can adapt and be agile and learn how to learn. Because of the way our technology is progressing, if you’re an expert in one specific technical skill today, by tomorrow it might very well be obsolete.”
And while setting the educational agenda may be the preserve of government, enterprise has its own part to play in identifying broad skillsets and creating environments in which talent can flourish.
Finding the ‘hidden Einsteins’
“At Phrasee, our goal is to unearth ‘hidden Einsteins’, people who are hardworking and adaptable, who may not have directly relevant experience but who do have transferable skills. We don’t judge people on where they’ve studied or worked, we judge them on what they can do.”
But when it comes to finding those ‘hidden Einsteins’, the UK has a very big problem – its fundamental lack of social mobility, claims Parry. Research by The Economist shows that the correlation between a father’s and son’s earnings is higher in the UK than anywhere else in the world. “So, if your parents can afford to send you to a good school and give you access to higher education, you have a much higher probability of being successful.” The end result, he says, is to perpetuate inequality and prevent the ‘hidden Einsteins’ from rising to the top where they could provide additional value for the economy of the future.
Government intervention: help or hindrance?
And how will that economy be shaped by future technologies? A recent report from the House of Lords Select Committee, AI in the UK: ready, willing and able? calls for the UK to lead on AI ethics, and recommends creating an SME growth fund to build a viable future for AI, boosting the economy and employment. Parry sounds a note of caution however, claiming there is a danger that public policy may inadvertently hamper progress and growth through regulation, bureaucracy and “missing the point”.
“It’s great to be an ethical leader but unfortunately being an ethical leader doesn’t provide tax revenues in the government’s coffers and it’s important to ensure the nation’s wealth. Instead, we need to encompass the ethical approach with a strong economic arm.” And while grants may be good, the danger is that the bureaucracy needed to implement the system may slow companies down.
The economy may also be weakened by a lack of relevant skillsets in the labour market, he warns. Immigration from the EU will stop at the same time that increasing numbers of the UK workforce are set to retire. A reduced labour market will inflate salaries and allow, says Parry, “large tech firms with seemingly unlimited budgets, whose profits return overseas, to create labour monopolies by outbidding small companies who drive value to the UK”.
Instead, he believes that government can best help the economy and the employment market by providing incentives to growth with initiatives such as the current R&D tax credit system where, for every pound invested, the government makes three pounds back in tax revenues.
Where are we going?
Revolutionary technology is nothing new of course. While sci-fi scenarios often inspire panic, transformative tech has been naturally evolving to become part of our world for many decades. And we don’t necessarily understand where it will lead us. Professor Nader Tavassoli, London Business School and advisor and consultant and coach to over 100 businesses, from start-ups to global Fortune 500 companies, gives an example.
“In the 1970s barcodes and barcode scanners began to revolutionise the retail industry and distribution. The value of the new technology was estimated in terms of time-savings and the benefits of increased accuracy.” Back then, it would have been impossible to predict where this would lead but today 50% of smartphones have a barcode scanner app that can link consumers to interactive content via an advert.
The same is true for AI, he believes, only this time the value shift and value creation will be vastly more far-reaching. “We naturally start to think about it in terms of what it can replace but we cannot imagine its effect on things not yet present. AI will be able to process vastly more data and do so far more quickly than any human, and in ways that our brains cannot.”
With the correct approach, the future is bright even though the challenges are substantial, and more debate is needed, for example, around topics such as ethics, privacy, and trust. While it’s difficult to imagine the exact shape of our next industrial and employment revolution, what’s clear is this. Technology won’t blindly replace jobs. But the people who understand the new technologies will replace those who don’t.