Future of work: will AI change the workplace forever?

While all-powerful computers and killer robots may be some time off, new technologies – including AI – are already shaking up the workplace. In the next five to ten years, it’s likely that your workplace will look radically different.

Many people think of AI as near omnipotent machines, yet the biggest disruption being realised now is automation. With computers and robotic devices now capable of performing complex – and extremely mundane – tasks with speed and precision, automation is taking hold in areas as diverse as agriculture, logistics (robotization), unmanned machinery, and admin and back office support (through Big Data).

Consider the maddening self-checkout machines at your local supermarket, or the algorithms subjecting your social media feeds. Both are examples of AI and automation.

Companies of all stripes are waking up to the power of AI. As well as greater productivity, fewer mistakes and better client service, some claim there’s a clear link between AI adoption and revenue growth, too.

According to an Insofys study, for instance, there is “a clear link between an organisations revenue growth and its AI maturity: organisations who report faster growth in revenue… were also more likely to be further ahead when it comes to AI maturity”.³

Increasingly, AI is being viewed as a long-term strategic priority that firms can ill-afford to slip behind on. It’s little wonder that virtually all supermarkets have adopted self-service checkouts, for instance, or that factories and even shipping ports are racing to automate as much as possible.

Just as the pandemic sparked a working from home revolution, it’s also kickstarted a once in a generation investment boom in AI investment and transformation. Digital plans that were scheduled to take years were brought forward in a matter of months, as companies embraced new digital and data-driven initiatives that would see them become more flexible and robust.

More than half of companies surveyed, for instance, accelerated their AI adoption plans during the Covid crisis, a recent study by PWC found.4 Almost all said that AI is now a “mainstream technology” for them going forward. And 55% of companies accelerated their AI strategy in 2020 due to Covid and two-thirds said they were going to accelerate that strategy in 2021.⁵

Not surprisingly, total investment in AI, which had stood steady through 2019 and 2020, boomed in 2021, and it is expected to remain strong in the coming years.

Just as the pandemic sparked a working from home revolution, it’s also kickstarted a once in a generation investment boom in AI investment and transformation. Digital plans that were scheduled to take years were brought forward in a matter of months, as companies embraced new digital and data-driven initiatives that would see them become more flexible and robust.

More than half of companies surveyed, for instance, accelerated their AI adoption plans during the Covid crisis, a recent study by PWC found.4 Almost all said that AI is now a “mainstream technology” for them going forward. And 55% of companies accelerated their AI strategy in 2020 due to Covid and two-thirds said they were going to accelerate that strategy in 2021.⁵

Not surprisingly, total investment in AI, which had stood steady through 2019 and 2020, boomed in 2021, and it is expected to remain strong in the coming years.

Some have warned that AI and automation could radically upend the jobs of millions. “The disruption scenario predicts de-industrialisation and therefore a decreasing demand for production workers employed in manufacturing”, Credit Suisse notes. “Structural changes in the labour market should mainly affect the weakest areas – both in terms of educational level and geographical setting.”⁸

Invariably, this means a negative impact for lower skilled workers in the developing world, with countries like China, India and Bangladesh likely to be hit hardest.

How many jobs could be lost? Estimates vary wildly. McKinsey, for instance, believes that around 15% of the global workforce, or around 400 million workers, will be displaced by automation by 2030, a figure that could rise to 30% under their fastest scenario modelled. Yet their slowest scenario would see just 10 million people displaced, which would have a negligible impact on the global workforce.⁹

New technologies could also generate new job opportunities. And those countries with the highest levels off AI adoption and automation – such as Switzerland, Singapore and the UK – haven’t experienced widespread job losses yet. So, the big disruption that many fear may not necessarily materialise – particularly if workers can be re-skilled to work alongside automated machines, rather than being entirely displaced by them.

Still, the workplace is likely to look radically different by the end of this decade, and policymakers, employers, workers and investors must prepare. Opportunities await, but it undoubtably won’t be smooth sailing for everyone.