STOCKHOLM, SWEDEN – During the last century, the world shifted from manual labour to a situation where manufacturing is almost completely automated. Quality control by visual inspection is a task people are quite good at – at least, for a short period of time. It is difficult for people to stay focused for very long, and suddenly they drift off thinking of what to do in the weekend. Computers are quite the opposite. They never take a break, and can focus on the exact same task 24/7 without ever drifting away.
How will automation affect wages, and how will wages affect automation? The pace of automation depends on prices, not just technological feasibility. Just because a robot or algorithm can perform a task as competently as a human doesn't mean that human will be replaced. Automation depends on the cost of the technology relative to the cost of human labor. In today's tight labor market, for instance, rising wages and worker shortages might encourage automation and boost productivity.
Futurists and science fiction writers have always looked ahead to predict how machines could augment the way people live and work. Still, a future where technology fully replaces physical work is distant, but it's no surprise that Artificial Intelligence (AI) has become a bit of a buzzword among technology and business circles lately. The topic of AI often generates strong reactions, with proponents who note its boundless potential reach and others who see it as a nadir for the global workforce. However, industries across the board have noted the potential of AI and how it will impact enterprises at the core. According to Narrative Science, 44 per cent of executives believe artificial intelligence's most important benefit is'automated communications that provide data that can be used to make decisions'.
I think there are a few reasons for this lack of investment in digital transformation and workflow automation. First off, I would say that there actually has been a fair bit of investment in this space – it hasn't always translated into unmitigated success stories and is very much a work in progress. Having said that, I do think there has been an underinvestment to date. Part of this is due to how we measure success in the industry. Expense ratios can be held artificially low by remaining on legacy platforms one more year, because the cost to run these fully depreciated but outdated systems is simply the cost of electricity to keep the machines running.