The Hidden Automation Agenda of the Davos Elite - Where public positions on automation’s impact private views
The Hidden Automation Agenda of the Davos Elite
This year’s World Economic Forum in Davos, Switzerland,
where business leaders’ public positions on automation’s impact on workers did
not match the views they shared privately.
By Kevin Roose Jan. 25, 2019
DAVOS, Switzerland — They’ll never admit it in public,
but many of your bosses want machines to replace you as soon as possible.
I know this because, for the past week, I’ve been
mingling with corporate executives at the World Economic Forum’s annual meeting
in Davos. And I’ve noticed that their answers to questions about automation
depend very much on who is listening.
In public, many executives wring their hands over the
negative consequences that artificial intelligence and automation could have
for workers. They take part in panel discussions about building “human-centered
A.I.” for the “Fourth Industrial Revolution” — Davos-speak for the corporate
adoption of machine learning and other advanced technology — and talk about the
need to provide a safety net for people who lose their jobs as a result of
automation.
But in private settings, including meetings with the
leaders of the many consulting and technology firms whose pop-up storefronts
line the Davos Promenade, these executives tell a different story: They are
racing to automate their own work forces to stay ahead of the competition, with
little regard for the impact on workers.
All over the world, executives are spending billions of
dollars to transform their businesses into lean, digitized, highly automated
operations. They crave the fat profit margins automation can deliver, and they
see A.I. as a golden ticket to savings, perhaps by letting them whittle departments
with thousands of workers down to just a few dozen.
“People are looking to achieve very big numbers,” said
Mohit Joshi, the president of Infosys, a technology and consulting firm that
helps other businesses automate their operations. “Earlier they had
incremental, 5 to 10 percent goals in reducing their work force. Now they’re
saying, ‘Why can’t we do it with 1 percent of the people we have?’”
Few American executives will admit wanting to get rid of
human workers, a taboo in today’s age of inequality. So they’ve come up with a
long list of buzzwords and euphemisms to disguise their intent. Workers aren’t
being replaced by machines, they’re being “released” from onerous, repetitive
tasks. Companies aren’t laying off workers, they’re “undergoing digital transformation.”
A 2017 survey by Deloitte found that 53 percent of
companies had already started to use machines to perform tasks previously done
by humans. The figure is expected to climb to 72 percent by next year.
The corporate elite’s A.I. obsession has been lucrative
for firms that specialize in “robotic process automation,” or R.P.A. Infosys,
which is based in India, reported a 33 percent increase in year-over-year
revenue in its digital division. IBM’s “cognitive solutions” unit, which uses
A.I. to help businesses increase efficiency, has become the company’s
second-largest division, posting $5.5 billion in revenue last quarter. The
investment bank UBS projects that the artificial intelligence industry could be
worth as much as $180 billion by next year.
Kai-Fu Lee, the author of “AI Superpowers” and a longtime
technology executive, predicts that artificial intelligence will eliminate 40
percent of the world’s jobs within 15 years. In an interview, he said that
chief executives were under enormous pressure from shareholders and boards to
maximize short-term profits, and that the rapid shift toward automation was the
inevitable result.
“They always say it’s more than the stock price,” he
said. “But in the end, if you screw up, you get fired.”
Other experts have predicted that A.I. will create more
new jobs than it destroys, and that job losses caused by automation will
probably not be catastrophic. They point out that some automation helps workers
by improving productivity and freeing them to focus on creative tasks over
routine ones.
But at a time of political unrest and anti-elite
movements on the progressive left and the nationalist right, it’s probably not
surprising that all of this automation is happening quietly, out of public
view. In Davos this week, several executives declined to say how much money
they had saved by automating jobs previously done by humans. And none were
willing to say publicly that replacing human workers is their ultimate goal.
“That’s the great dichotomy,” said Ben Pring, the director
of the Center for the Future of Work at Cognizant, a technology services firm.
“On one hand,” he said, profit-minded executives “absolutely want to automate
as much as they can.”
“On the other hand,” he added, “they’re facing a backlash
in civic society.”
For an unvarnished view of how some American leaders talk
about automation in private, you have to listen to their counterparts in Asia,
who often make no attempt to hide their aims. Terry Gou, the chairman of the
Taiwanese electronics manufacturer Foxconn, has said the company plans to
replace 80 percent of its workers with robots in the next five to 10 years.
Richard Liu, the founder of the Chinese e-commerce company JD.com, said at a
business conference last year that “I hope my company would be 100 percent
automation someday.”
One common argument made by executives is that workers
whose jobs are eliminated by automation can be “reskilled” to perform other
jobs in an organization. They offer examples like Accenture, which claimed in
2017 to have replaced 17,000 back-office processing jobs without layoffs, by
training employees to work elsewhere in the company. In a letter to
shareholders last year, Jeff Bezos, Amazon’s chief executive, said that more
than 16,000 Amazon warehouse workers had received training in high-demand
fields like nursing and aircraft mechanics, with the company covering 95
percent of their expenses.
But these programs may be the exception that proves the
rule. There are plenty of stories of successful reskilling — optimists often cite
a program in Kentucky that trained a small group of former coal miners to
become computer programmers — but there is little evidence that it works at
scale. A report by the World Economic Forum this month estimated that of the
1.37 million workers who are projected to be fully displaced by automation in
the next decade, only one in four can be profitably reskilled by private-sector
programs. The rest, presumably, will need to fend for themselves or rely on
government assistance.
In Davos, executives tend to speak about automation as a
natural phenomenon over which they have no control, like hurricanes or heat
waves. They claim that if they don’t automate jobs as quickly as possible,
their competitors will.
“They will be disrupted if they don’t,” said Katy George,
a senior partner at the consulting firm McKinsey & Company.
Automating work is a choice, of course, one made harder
by the demands of shareholders, but it is still a choice. And even if some
degree of unemployment caused by automation is inevitable, these executives can
choose how the gains from automation and A.I. are distributed, and whether to
give the excess profits they reap as a result to workers, or hoard it for
themselves and their shareholders.
The choices made by the Davos elite — and the pressure
applied on them to act in workers’ interests rather than their own — will
determine whether A.I. is used as a tool for increasing productivity or for
inflicting pain.
“The choice isn’t between automation and non-automation,”
said Erik Brynjolfsson, the director of M.I.T.’s Initiative on the Digital
Economy. “It’s between whether you use the technology in a way that creates
shared prosperity, or more concentration of wealth.”
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