by JD Sartain

Smart Machines Could Cost Tech Industry Millions of IT Jobs

News Analysis
Jan 02, 20145 mins
Computers and PeripheralsInternetIT 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?

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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Lost Jobs, Yes, But Also Better Opportunities

In a similar report, Forrester analysts Christopher Mines and Michele Pelino note that smart computing using “sensors, networks and analytics software to connect physical objects and infrastructure to computing systems will provide unprecedented visibility and control of the status, location and activities of products, assets and infrastructures.”

These so-called “connected world solutions” can link physical assets to analytics and control systems over the Internet, they continue, allowing firms to make decisions “based on comprehensive and real-time understanding of situations.”

Yes, smart machines have evolved beyond basic automation into HAL 9000-like, self-learning systems that can function much like the human brain when programmed to do so. Artificial intelligence and cognitive systems have progressed to such sophisticated levels. Many highly specialized professions will soon succumb to these technologies, leaving humans out of the equation, with job loss figures in these specialized areas over the next decade nothing short of astronomical.

According to Susan Etlinger, an industry analyst with the Altimeter Group, there have always been shifts in the perceptions of new technologies such as these. Some sectors are and will be more affected by smart machines than others. “We originally assumed that the most affected industries would be mining and farming, not the media and computer industries,” she says.

But for every negative study that screams, “Lost jobs,” another study replies, “Better opportunities,” Etlinger says. “We’ve become a more technology- and data-dependent economy with businesses and households full of smart machines that can do everything from regulating lights and thermostats to preparing meals and cleaning house.”

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People will have to accept the reality that science is continuing to advance — and that every step forward carries with it a corresponding ethical dilemma. “Technology is advancing much more quickly than our ability to build in safeguards,” Etlinger says. “Therefore, we must educate ourselves about these technologies, so we can manage them responsibly.”

According to Harris-Ferrante, transformation is key and remains critically significant across all sectors. Many industries will face intense challenges in 2014 and beyond, leaving no choices — except to radically change their established business models in order to keep pace with the competition and the ever-progressing environment.