In Part 1 of this series, we discussed how the rate of human displacement by automation robots is gradual and slower than attrition in most workplaces. In this installment, the topic is how this displacement will take effect in different industry sectors and why this is beneficial.
Automation and robotics saw their origins in the manufacturing sector, with physical robots building products and improving productivity in factories. The first digitally operated and programmable robot was invented in 1954 and went to work for General Motors in 1961. Since then, robots have been a prominent fixture in manufacturing, and there is no evidence that this will change any time soon. With more recent robotic contributions to the business side, the digital workforce can be broken down into two groups: the “blue-collar” physical robots that build products and the “white-collar” software robots, or automations, that support business processes. Expect to see complete displacement in the two shaded areas of this diagram. The white areas are roles which will continue to be filled by humans.
An interesting trend that has started to emerge is less dependence on outsourced overseas factory workers and business process outsourcing (BPO).
In manufacturing, humans will remain irreplaceable in two main roles, factory administration and business management. These higher-cognitive roles are better suited for human abilities and provide the leadership and culture that drive companies to success. Adding digital workers increases the capability of manufacturing firms and increases the quality of products they produce.
Other industries are not quite as simple. Companies focused on services, such as healthcare, IT, finance, government, retail, and logistics, have more complex organizational structures and will evolve differently.
The financial sector, including banks, insurance companies, and financial services, will grow similarly to retail companies because they have a similar dependence on automation to handle customer service and back office financial work. Gartner predicts that by 2023, there will be a 30% increase in the use of RPA for sales and customer experience.
Some of the larger online retailers, as well as logistics companies, will continue to use physical robots to process orders inside warehouses and to ship sold items using automated vehicles and drones. AI is already a big part of the shipping process, as drivers are routed to delivery locations using traffic-enabled smart applications and virtual proof of delivery software. Online retailers will continue to become more dependent on shipping companies and we should expect to see many opportunities for mergers throughout these two sectors.
In healthcare over the next 10 years, patient services, such as billing and scheduling, will be impacted the most and almost entirely replaced with AI chatbots. Human resources and hospital administration, including health insurance processing, will be the next to go, with half of the work now performed by humans delegated to digital workers. Complex medical procedures will be performed by a single physician alongside a clinical robot, alleviating the need for human nurses, medical assistants, and additional doctors in the procedure room. Hopefully, combined with healthcare reforms, many procedures and treatments will be accomplished at lower cost than is possible with today’s requirements.
Another side effect of increased automation is the decrease of outsourced labor overseas. The current practice of leveraging offshore services in India, China, and Malaysia will recede for three reasons:
- The 24/7 digital worker trumps the inexpensive human worker and saves companies > 40%.
- Salaries in Asian countries are on the rise, as are quality of life expectations.
- Business process outsourcing companies will be less necessary as RPA, DPA, and AI move to the cloud; turnkey solutions for all industries will be readily available from any location and to companies of any size.
As noted in Part 1 of this series, the future is not to be feared. The business landscape is changing and improving. It is predicted that by 2024, organizations will lower operational costs by 30% through automation, and this is a good thing. Most of us can barely imagine a world before the internet and mobile phones because the world is better now. Automation is a methodology to improve civilization, but also one that requires responsible actions by technology industry leaders, architects, developers, and even users. Part 3 will explore the roles we play in automating the world and the ethical choices we will encounter.