The Evolution of Work and the Workplace : RPA, AI & IA

16/01/2018 | News, Resources

The Evolution of Work and the Workplace : RPA, AI & IA

The future of work and the workplace is especially important at the moment because of an economic enigma that experts call ‘the productivity puzzle’. Figures from the Office for National Statistics (ONS) show the rate at which human labour is transformed into goods and services in the UK has barely risen since 2007, after decades (and some would argue centuries) of almost unbroken improvement. “This is unprecedented in the post-war era,” it warned.

Why is this important?

Put simply, if the productivity puzzle can be solved, we all benefit. Because labour costs are high, better productivity from people increases profits for a business and lowers prices, so most of us end up better off, and the economy grows faster. When productivity gets stuck, so does growth. This puzzle is global, but is especially severe in the UK. Italy, France, Germany and the US are all more productive than the UK, although all of them are having problems increasing that productivity.

How far has productivity risen?

Economic growth transforms the way we live. According to historian Eve Fisher, before the Industrial Revolution, the creation of a single shirt would require 579 hours of manual labour, which means at the current UK National Minimum Wage, every shirt would cost at least £3,242.40 to make. Maybe we didn’t worry about productivity back then, but there was a reason why most people only owned one shirt. Accenture’s Emma McGuigan argued that new technology and innovation has the potential to boost economic growth and improve lives in ways we can’t yet comprehend. It’s hard to conceive of the benefits of innovation, she said, but no one wants to go backwards. “There is nobody who thinks: ‘Actually, we’d like to go back to a time when life expectancy was 45 and we were dying from diseases we can simply cure today,’” she said.

Why has productivity stopped rising?

There are many factors that affect productivity and notall economists agree on them. One important factor is that we may be nearing the end of the wave of industrial automation that began with the Industrial Revolution and went on to give us the first robots in the late 20th century. Today, manufacturing production only accounts for about 15% of what the UK economy creates. Services, which represent 80% of the economy, are less automated but more labour-intensive because they need skills that are hard to programme into a computer. Unlike manufacturing production, no two tasks in services are alike, and learning and judgement are part of a job. So it’s harder to improve the service industry using robots.

Can the puzzle be solved?

“Humans are inherently inefficient,” explained Thoughtonomy’s Terry Walby. “They are hampered by the systems they use, and people are organised into operational siloes.” But while some service activity requires judgement, Walby said we’re on the verge of a revolution, one in which robots can automate elements of office-based service work that are tedious and repetitive. Using cloud technology (so it can scale cheaply), and AI (so the technology can keep learning to do a better job), Walby offered a vision with the potential to automate unstructured but rules-based processes.

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