Impact of Artificial Intelligence (AI)
Artificial intelligence, biological engineering and quantum computing, when combined, will impact life in the 21st century. Biological engineering will increase, and possibly double, life spans. Half or more of today’s jobs will be eliminated by artificial intelligence (AI) and changes will occur faster due to quantum computing. This is the first in a series of columns on these subjects.
Beginning with the Industrial Revolution, there has been a continuing transition in the methods of producing goods and services and the jobs required to produce those goods and services. In 1900, 40% of Americans lived on farms. Today 2% live on farms and they produce five times as much food.
In 1987, General Motors employed 877,000 worldwide. At the end of 2017, GM employed 180,000 worldwide and GM produced more cars. This decline in employees is primarily due to the use of robots and other manufacturing technologies. (Source: GM’s Annual Reports.)
Several university research studies have found that 82% to 87% of job losses in the US from 2000 to 2017 were due to automation. The pace of this change is continuing and may even increase as automation becomes more intelligent.
McDonald’s has announced plans to install digital ordering kiosks in place of cashiers at 14,000 of its American restaurants in the next two years, according to Business Insider.
Bank of America has opened three completely automated branches, which do not employ any humans. These branches provide mortgages, credit cards and auto loans. Customers can also use ATMs. For situations requiring a bank employee, customers can have video conferences with employees at other locations.
In some tech firms, administrative assistants are computers that communicate verbally using AI. In Georgetown’s Washington Harbour, a security robot named, Steve, works 24 hours per day, replacing humans.
In Chicago, the law firm, Baker & Hosterler LLP, utilizes IBM’s AI-based legal assistant, ROSS, that can read and understand language, postulate hypotheses, research and then generate responses, along with references and citations to back up its conclusion.
In the investment world, computers use artificial intelligence and algorithms to read, process and trade on news before humans have time to read it. Major investment advisory services, including Schwab, Morgan Stanley, Vanguard, Fidelity and Chase, have introduced or announced AI-based robot investment services. According to Money magazine (August 2018), these services charge about one-third the cost of human investment advisory services.
AI-driven automation is impacting manufacturing jobs. Computers work 24 hours per day with no breaks and no health insurance and perform many tasks more consistently producing better quality. A Chinese company making cell phone components replaced 650 employees with 60 robots using AI. They increased annual volume from 8,000 to 21,000 units and reduced defects from 25% to 5%.
In tradable industries, like manufacturing, companies can produce products in one part of the world and sell these products in another part of the world. Global competition has driven these companies to utilize technology to reduce costs and increase quality. Non-tradable industries, like education and healthcare, have not been pressured by competition in the same way to adopt new technologies to improve outcomes. They have been the least disrupted by productivity-enhancing technologies, but this is starting to change.
In Plato’s Academy (387 BC), students learned by listening to lectures from teachers. Now, 2,500 years later, this remains the primary form of teaching.
On-line education, including massive open online courses (MOOCs), are where automobiles were in 1920. In 1920, horses were more reliable, but eventually automobiles dominated personal transportation.
Darrell West’s excellent book, “The Future of Work,” describes some technology innovations in education: “Video designers are incorporating math or science puzzles into instructional games. Players are required to answer substantive questions in order to advance through the video game. Those who are successful earn points and win the game. This combination of video gaming and education represents a potent form of digital learning.” Technology will allow each individual student to learn at his or her optimal speed.
In medicine, at the 2018 World Medical Innovation Forum on artificial intelligence, Health Analytics reported on a dozen technologies using AI that are likely to impact on healthcare in the next decade. These included diagnostic tools, analytics for pathology images and wearable health monitoring devices.
At the World Economic Forum, in 2017, researchers in AI at Oxford and Yale predicted that AI will outperform humans in (1) transcribing speech by 2023, (2) driving trucks by 2027 and (3) working as surgeons by 2053. There is a 50% chance of AI outperforming humans in all tasks in 45 years.
Existing jobs will likely be eliminated by technology faster than new ones are created and the people losing the old jobs will likely lack the skills to perform the new ones. Jobs requiring only a high school education are declining in number. They will continue to be replaced by technology.
AI will significantly improve the productivity of professionals, including accountants, attorneys, diagnosticians, financial advisors, pharmacists and many others. Higher productivity means that fewer people will be required in these professions.
Pricewaterhouse Coopers predicted that AI could contribute up to $16 trillion to the global economy in 2030. This is more than the combined GDP of China and India in 2017
Lifetime learning will necessary to maintain employment. Extraordinary improvements in our education systems will be essential.
In fairness, opinions of AI differ. Elon Musk (Tesla) said that automation driven by AI “is the biggest risk that we face as a civilization.” Steve Mnuchin, Treasury Secretary, stated, “In terms of artificial intelligence (AI) taking over American jobs, I think we’re so far away from that that it’s not even on my radar screen. . . I think it’s 50 to 100 years away.” This implies that the U.S. is not currently preparing for future disruptions and the requirement for life-long learning associated with AI.
