The truth about artificial intelligence and the hype of job losses ⁰

Much of the current focus of the debate about the impact of artificial intelligence has been on how the ‘rise of the robots’ will spend the end for many job roles. Yet that mischaracterises the true effects according to a new report from Infosys, released today, to coincide with the World Economic Forum in Davos. The report, Amplifying Human Potential: Towards Purposeful Artificial Intelligence, concludes that the implementation of AI doesn’t necessarily mean job losses. In fact, 80 percent of businesses adopting AI which have replaced, or plan to replace, workers with technology, will be far more likely to retain, retrain and upskill those employees impacted. The study also claims that the adoption of AI will mean a number of other important benefits for organisations including a predicted 39 percent revenue rise by 2020 as a result of the implementation.

However, UK firms are least prepared to take advantage of this opportunity – only a quarter report their industry has been disrupted by artificial intelligence – the lowest out of seven markets surveyed. However there is growing awareness in the UK of the potential of AI and the resources needed to get the most from it. UK businesses who took part in the study believe they will need the following skills to help implement AI projects: development skills (58 percent), security skills (54 percent) and implementation skills (55 percent). Around two thirds (65 percent) believe AI will bring out the best in their people, 70 percent feel it can deliver positive societal and economic (76 percent) change.

The report polled 1,600 senior business decision makers at large organisations across the world. It claims there is a clear link between an organisation’s revenue growth and its artificial intelligence maturity: Organisations who report faster growth in revenue over the past three years were also more likely to be further ahead when it comes to AI maturity. AI is perceived as a long-term strategic priority for innovation, with 76 percent of the respondents citing AI as fundamental to the success of their organisation’s strategy, and 64 per cent believing that their organisation’s future growth is dependent on large-scale AI adoption. While there are ethical and job related concerns – 62 percent believe that stringent ethical standards are needed to ensure the success of AI – most respondents seem optimistic about redeploying displaced employees with higher value work. The majority, 85 percent, plan to train employees about the benefits and use of AI, and 80 per cent of companies replacing roles with AI technologies will retrain or redeploy displaced employees.

Sandeep Dadlani, President & Head of Americas, Infosys, said, “Artificial Intelligence (AI) adoption is on the rise and we are excited to see the investments in AI that businesses are gradually making to derive meaningful and creative change. The achievements are remarkable and the opportunities AI is bringing forth are vast. As we are seeing AI mature and gain momentum, our research shows that the next four years will witness further spikes in interest, and general bullishness about the significant value and benefits that can be obtained through AI adoption. As an industry therefore, we must take necessary steps to ensure AI is developed morally and ethically across every part of society and that employees are actively engaged and provided with the necessary training to be central to this journey.”

Key research findings:

• Businesses expect noticeable AI adoption and growth by 2020: Organisations that have already deployed or have plans to deploy AI technologies expect to see a 39 percent average increase in revenue by 2020, alongside a 37 percent reduction in costs. 76 percent of IT and business decision makers see AI as pivotal to the success of their organisation.
• Businesses plan to invest in skills development: In 80 percent of cases where companies are replacing roles with AI, organisations are redeploying or retraining staff to retain them in the business. Furthermore, 53 percent are specifically investing in skills development. Organisations that have fewer AI related skills are more likely to re-deploy workers impacted by AI adoption, whereas those with more AI-related skills are more likely to re-train employees, according to the study. The leading industries that plan to retain and retrain their workers are: fast-moving consumer goods (94 percent); aerospace and automotive (87 percent); energy, oil and gas (80 percent); and pharmaceutical and life sciences (78 percent). The research reveals AI will cause greater investment in workforces, specifically China (95 percent), France (90 percent), Germany (89 percent), the UK (82 percent), and the US (76 percent).
• Addressing ethical concerns is essential for AI success: Two-thirds of those surveyed have not fully considered the ethical issues related to AI, such as employee concerns about handing over control, and industry regulations. Further, 90 percent say their organisation’s employees face challenges or concerns with AI adoption, and 88 per cent report challenges or concerns from customers and suppliers. In total, 53 percent agree that ethical concerns are a significant obstacle to effective application of AI technology.
• Market and Industry results show differences: Based on the responses, companies in India and China are much more likely to state that they are ahead of their industry competitors when it comes to AI use, followed by Germany, the US, UK, France. Fast moving consumer goods (57 percent) and telecoms (48 percent) are much more likely to report that they have already felt AI disrupting their sector. Pharmaceuticals and life sciences reported the widest usage of AI technologies that are working according to their expectations, leading to the highest AI Maturity Index scores by industry.
• Businesses are at the start of their AI journey: Only one in ten respondents that have deployed AI technologies believe that their organisation is fully maximising the current available benefits and capabilities of AI. The majority (90 percent) report that their organisation’s employees face challenges or concerns relating to the adoption of AI. Around four in ten respondents believe that the time to implement, ease of use and the interoperability with other systems and platforms are areas of AI that require the most improvement before it can be effective in their organisation. There are also areas of AI adoption that need to be addressed with training, education and transparency in the workplace. Safety of data (43 percent), job security (40 percent) and pay rates (30 percent) are the foremost areas of workforce concern despite the broadly positive outlook for AI adoption.
• AI in action: Big data automation (65 percent) and predictive/prescriptive analytics (54 percent) are the primary AI applications today. On average, the companies surveyed have invested $6.7 million in AI in the last year, and have been actively using AI for an average of two years. The IT department is the leading adopter (69 percent), followed by operations (34 percent), business development (33 percent), marketing (29 percent) and commercial, sales and customer services (28 percent).
• Risk and reward: 71 percent agree the rise of AI in the workplace is inevitable, citing positive change for business prospects, employees and society. However, over half (51 percent) admit that cost reduction is an area of AI that requires the most improvement before it can be effective for their organisation.
• Deployment: 88 per cent also report that their organisation’s customers and suppliers face challenges and concerns relating to the adoption of AI. Four in ten point to a lack of understanding of the benefits and intended uses for it, while 38 percent flag a general mistrust of the technology. A similar number (37 percent) indicated their preference to work alongside and interact with human workers rather than machines.
• Overall, the study demonstrates the role AI can play in business growth, create opportunities for people to do more than what their current job and education enables, and drive long term macro environment benefits. Decision makers believe AI will bring out the best in their organisation’s people (65 percent), and feel it can deliver positive societal (70 percent) and economic (76 percent) change.