Almost half of company bosses in 45 countries are speeding up plans to automate their businesses as workers are forced to stay at home during the coronavirus outbreak.
Some 41% of respondents in a survey by the auditing firm EY said they were investing in accelerating automation as businesses prepared for a post-crisis world.PA Media, “Bosses speed up automation as virus keeps workers home” at The Guardian
Due to the massive disruption of business, a record 3.3 million Americans filed for unemployment for the week ending March 21, 2020. Analysts have noted that the key difference between the global coronavirus impact and past periods of economic distress is that “it is sudden and impacts virtually every industry and business model around” (CNN, March 26, 2020).
How will automation help if there is hardly any business to automate? And if there is business out there, would automation help?
Machines have a significant advantage over human workers: You can turn them off. And, when you do, no one complains and no one files for unemployment. In fact, a business would likely save money due to reduce power consumption and worker benefits. Machines, provided they perform as promised, can enable a rapid response to market changes.
The coronavirus disruption, for example, has caused a historic drop in business demand. The week before coronavirus really hit, only 300,000 Americans filed for unemployment— 90% fewer. Such rapid changes are hard for any business to absorb. Worse (from a strict dollars and cents perspective) ceasing to pay an employee does not mean that the expenses stop. Employees may have accrued vacation, sick leave, and other benefits owing. All these put a strain on a business’s cash flow just when the cash stops flowing.
So—again, from a strict dollars and cents perspective—increasing automation as a hedge against a huge, sudden drop in demand makes sense for businesses.
But, does it make sense overall and will it work? Over the last year, I’ve covered many occasions in which automation failed to live up to the hype. Here are a few:
- Star self-driving truck firm shuts; AI not safe enough soon enough (The CEO was blunt about the problems.)
- AI is not ready to moderate social media content! (Again, professionals admit that.)
- Can we outsource hiring decisions to AI and go for coffee now? (The history is not a promising one.)
- Pizza robots get the pink slip (They didn’t make good pizza.)
- Boeing’s sidelined fuselage robots: What went wrong? They created more problems than they solved.
The bottom line is, automation often works but it often fails too, often for unforeseen reasons. While it can help humans do better, it cannot replace them.
I understand the panic many business leaders experience as they try to stay solvent while customers evaporate. Panic, however, is a poor teacher: AI-based automation will not only not solve all their problems, it may very well add to them. AI is not a magic box into which we can stuff them and make them disappear.
We will get past SARS-Cov-2 (COVID-19) Life, and business, will return to something more normal (even if it is a new normal). And it may be that we, all together, will need to create safety measures to better protect local businesses and their employees from world class catastrophes.
Further reading: Robot-proofing your career, Peter Thiel’s way Jay Richards and Larry L. Linenschmidt continue their discussion of what has changed—and what won’t change—when AI disrupts the workplace.
We will never go back to the pre-Covid-19 workplace (Jonathan Bartlett)