Smart Machines Could Cost Tech Industry Millions of IT Jobs

End-of-year reports from Gartner suggest that, over the next five years, smart machines could replace human workers in a plethora of industries, from manufacturing to warehousing to transportation. Is it a 'futuristic fantasy,' as a majority of CEOs tell the analyst firm, or a harsh reality?

By J.D. Sartain
Thu, January 02, 2014

CIO — A recent forecast from Gartner suggests that IT organizations in most vertical industries face "accelerated pressure for fundamental transformation." Put another way: An organization's survival and competitive edge depends on its ability to embrace digitalization.

"The necessity to adopt digital business models transcends all industry verticals, and its diverse impacts are creating business opportunities that were not possible in the past," says Gartner Vice President and Distinguished Analyst Kimberly Harris-Ferrante. "Enterprises must respond immediately in order to build the right business and IT road map for future market demands."

Digital solutions, including smart machines, will have a huge impact on the employment market, replacing millions of jobs across all industries throughout the next decade. However, Gartner notes that most CEOs — 60 percent, at least — largely underestimate this real threat and believe that "the emergence of smart machines capable of absorbing millions of middle-class jobs within 15 years is a 'futurist fantasy.'"

In a statement, Gartner Research Director Kenneth Brant says that many CEOs are missing out on what could become "the most significant technology shift of this decade," adding that there's already a digital workforce fostered by the chief players on both sides of supply and demand.

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"This marketplace comprises intelligent agents, virtual reality assistants, expert systems and embedded software to make traditional machines 'smart' in a specialized way, plus a new generation of low-cost and easy-to-train robots and purpose-built automated machines that could significantly devalue and/or displace millions of humans in the workforce," Brant says.

Will Smart Machines Really Replace Workers?

In a separate report, Gartner mentions more than a dozen areas where smart machines will replace human workers within the next five years. These include utilities with smart metering solutions, 3D printing, cloud-based big data analytics and various software-controlled devices, products and appliances in fields such as fleet and facility management, transportation, warehousing, manufacturing, industrial and commercial management and surveillance.

For example, Gartner predicts that $100 billion a year in intellectual property will be lost to 3-D printing in less than four years, with the technology used to generate custom stock orders by seven out of 10 top multichannel retailers.

Other types of investments will present different challenges to IT organizations, Gartner says.

  • Eighty percent of life science organizations "will be crushed by elements of big data," resulting in shoddy returns on IT investments.
  • Meanwhile, 60 percent of financial institutions worldwide will process the bulk of their transactions in the cloud, and the transition to the cloud may not be easy for IT staff.
  • In addition, the report notes, "more than 60 percent of government organizations with a chief information officer and a chief digital officer will eliminate one of these roles." This prediction from Gartner comes amid separate reports suggesting that government agencies aren't ready for cloud or big data technologies but also expect larger IT budgets in the coming years.

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