by Nathan Brown

Cyborg supply chain – how AI and humans will revolutionize labor

Dec 18, 2017
Artificial IntelligenceIT LeadershipIT Skills

For as long as labor has existed, there has been a fear that technology will kill jobs. Scribes were pissed at the printing press. Lumberjacks and weavers thought life was over after the creation of mechanical axes and looms. Yet, life and labor have gone on.

Not only has life continued, it’s thrived. By all measures – life expectancy, child mortality, basic education and access to information, food security, etc. – life for humans is better than ever. This is a direct result of technological innovation.

But for many, artificial intelligence (AI) presents a threat humankind has never faced before. As they see it, for the first time the human reasoning and decision making can actually be replaced and improved upon by this new technology. They argue that the promise of AI thinking and problem solving like humans removes the need for humans to be a part of the labor process. It will be the collapse of human labor production as we know it.

Without question, how work gets done is changing. However, the overall impact of this change will be the exact opposite of doom and gloom. Based on all indications, AI will spur the largest economic growth since the Industrial Revolution. By supporting this growth, human labor will benefit in three key ways. 

More pie

AI will “grow the pie” with a two-prong economic growth effect.

First, and most specifically related to the supply chain, AI will increase the velocity of trade. Goods will be moving more and sitting less, with their path from raw materials to consumers streamlined and more precise. With AI’s help, the supply chain can move more products to more customers and at a lower cost by removing the waste from production and distribution. By removing friction from the supply chain, the entire ecosystem is more adaptive and can adjust to accommodate market or consumption changes faster. This stabilizes markets and will moderate the effects of traditional downturns to support further growth.

Secondly, AI will create new categories that not only stimulate consumption, but facilitate ancillary markets. While many of the new categories and markets will remain a mystery until AI has reached a certain level of maturity (who predicted GPS-guided smartphone-enabled ride sharing in 1980?), we can look at a recent example of innovation that had a comparative effect.

For decades, the thermostat market remained relatively unchanged. People either purchased a thermostat for a new HVAC system or to replace the broken thermostat they already had. Then came Nest.  

Nest’s smart thermostat changed what a thermostat could do, how operators interacted with it and the value potential for an entire category of products. The Nest thermostat looked cool and was functional, but it was smart and created a new way for users to save money. A disruptor in the true sense of the word, this completely changed the market for thermostats. People who had a perfectly functioning thermostat – and would never have previously been in the market for a replacement thermostat – went out and got a Nest because of the benefits. This created demand for design, production, delivery, marketing, integration with 3rd party devices, and more. And this is all just surrounding thermostats.

The “Smartening” of the world around us – the process of taking everything today that is dumb and transitioning it to an intelligent counterpart – will cause this kind of market disruption to happen on a grand scale. In the warehouse, replacing a functioning forklift that hasn’t reached the end of its life cycle when the AI-embedded forklifts come out will be easily cost justified. We are already seeing AI added to security systems and electronics components of all kinds. Creating the Internet of Things is going to generate a lot of prosperity. All the support needed for such a complete paradigm revolution will be huge for economic and labor growth.  

A massive change in production combined with new (and increased) consumer demand means the overall pie will grow. Every participant in the economy will see their slice grow, but if there are fewer participants then that’s still bad news, right? Of course. But human labor provides some real value that cannot be replicated by AI and machines.  

The next generation of labor is VERY human

Some really smart tech executives have argued that the scale of which automated robots can replace human workers is so large that it will be catastrophic for the human labor market. It’s true that a single automated AI robot can replace dozens of human workers, but the overall effect on the workforce will be more of an evolution than an annihilation. The net effect is that the average human will have access to more and cheaper goods than before. This was the effect of every prior productivity revolution.

We know that AI will exponentially increase the demand for programmers and engineers. Data scientists, people that run the application infrastructure and code writers are all very human roles that are necessary to realize the value of AI. Another real win is connecting AI outputs and production back into the human sphere. With an increase in data insights, there will be an increased demand for designers who can present these results in a way that’s interesting and appealing. Growth in UX and UI designing is directly tied to the increase in advanced intelligence devices.

But more than just a demand for “humanizing” the outputs of AI, the shift in production that creates increased profits also shifts how companies leverage and deploy human labor.

As production efficiency improves, more emphasis is going to be put on the customer experience of a product or service than the actual creation of it. By automating the assembly of the latest widget, more effort will be put on understanding and improving the packaging design to amplify the unboxing experience. Naturally, improving the consumer experience will raise expectations surrounding service and support. This creates a new labor problem.

What’s the first thing you do when you have a simple question and you call a hotline only to be connected to an automated phone tree? Hit “0” as fast as you can, right? That’s because people expect and prefer to interact with a human when resolving issues, voicing feedback, asking questions, and for customer support generally. Meaning, as a business expands and expectations are heightened, more human workers than ever will be needed to serve important customer support positions.

Humans’ ability to emotionally connect with one another has labor application that does not stop at customer service. Some problem solving necessitates an emotional understanding that bots and algorithms can’t solve. For example, a travel agency might use AI to deal with routine tasks – booking flights, analyzing transportation schedules, comparing costs – but more complicated tasks such as crafting a customized experience would be best done by humans. While AI could analyze some inputs to formulate a schedule, a travel agent is able to read body language and see that what a person really means is different from what they actually say. When someone says they like adventure, a person would be able to understand whether they really mean they want to take a sightseeing tour or run with the bulls.

By taking care of the grunt work and allowing businesses to focus on the human experience, AI is creating a demand for new types of labor and changing how labor is valued.

More jobs, more money, more [happiness]

One of the most important benefits that AI will bring to the human workforce is fulfillment. AI will lead to the loss of time consuming, mundane labor jobs. Looking at labor through the lens of Maslow’s hierarchy of needs theory, the elimination of roles at the bottom of the self-actualization spectrum means human workers will only have roles that are more gratifying.

In the supply chain, AI enabled machines can handle scanning and counting packages faster and more accurately than humans. Human workers in these roles will be transitioned to helping customers have a better experience, translate insights that will alter an organization’s market strategy or otherwise be in a position that allows for an enhanced sense of achievement on a daily basis.

A happy side effect of this is that an individual’s work is now more valuable. In the near term, people who work side-by-side with AI systems can be more productive than they would be on their own. A more productive person is more valuable. In the long term, with AI fully matured, only positions that have proven to be better suited for human labor will remain.

More fulfilling work with higher pay is a perfect recipe for improved quality of life.

Hakuna Matata

While we look into our crystal ball to see what the future of AI and the workforce holds, it’s encouraging that positive outcomes have already been noticed. A recently released study analyzing companies identified as early adopters of AI and cognitive technologies shows that the innovations are not only helping business, but helping the human workforce as well. Almost 70 percent of those analyzed said the technology has not and will not create job loss within the next three years and in fact, about 30 percent said the addition of new jobs will be taking place. A peek into how AI value is perceived, the benefit of AI and cognitive technologies that was ranked last was workforce reduction.

Now in the early stages of AI-supported labor, a discussion surrounding how we can prepare for and embrace the labor change spearheaded by this technology is needed. To fully understand the scope of the evolution and its impact, we must not think of AI as a standalone labor replacement. Instead we have to envision all the ways in which AI will serve humanity. After all, technology only exists to serve the people. Part of how AI serves humanity is by serving the supply chain. 

If we embrace this idea and realize the benefits of taking this approach, we’ll be able to create more jobs and allow each person to have a more fulfilling existence.