Digital transformation is here and is set to sweep away jobs on a scale that we have not seen since the beginning of the Second World War. Over the past few years, many organisations have sought to transform their business processes and models in order to exploit the limitless opportunities that digital technologies have opened up. But many of those in senior management are yet to grasp the potential of digital innovations. Although digital transformation is a hot topic, most enterprise and government decision makers I meet around the world either underestimate the nature of the transformation or they are simply overwhelmed and almost paralysed as they do not know quite how to begin transforming their organisations.
Fundamentally, the digital revolution is no more than the fourth wave of the industrial revolution, which as we know started in the second half of the 19th Century. The first wave was about mechanising production. The second wave was about the ubiquitousness of energy thanks to the electricity fairy. The third wave was the apparition of an intellectual or service economy. The fourth wave will see the replacement of routine jobs by artificial intelligence (AI) and robots. Each wave has led millions of businesses and jobs to disappear in the immediate aftermath. But over the longer term, an even larger number of businesses have been created.
Humans are naturally afraid of change and do not like to challenge the status quo. But this is an irrational fear and it stands at odds with our extraordinary ability to innovate. In any case, change is unavoidable. Thanks to new technologies, the advance of AI, a ubiquitous internet, self-navigating drones, driverless cars and 3D printing are entering the mainstream. They are likely to lead to the loss of various jobs such as office clerks, drivers, factory workers, and even teachers and doctors. It may take 20 or 30 years, but it will happen, meaning the majority of us will be affected by AI.
Over a year ago, John Chambers, the charismatic Chairman of Cisco, warned that “40% of companies will be dead in 10 years”. While this may be one of the more extreme estimates there is evidence to support this claim. A short while ago, Foxconn announced that it was replacing 60,000 employees with robots. GE, the largest industrial conglomerate in the world, announced in 2015 that it is in the process of repositioning itself as a digital business. This is a calculated risk and marks the beginning of a trend that has now caught the attention of global leaders. To this end, in January 2016, the World Economic Forum in Davos centred on “The Future of Jobs.”
Today machine learning AI is still crude. It is the nature of technical disruption that a new technology is inferior to established technologies and to processes that have been refined over many years. But a new technology has the potential to surpass the old one, to the point of making the latter useless. I wear a Fitbit, and I am appalled at how little information I get from it. At the same time, I have no doubt that 20 years from now, we will all be wearing some health monitoring device and, in certain cases, we will get a call from our doctor even before we feel sick. That will decrease the financial burden of healthcare much more than any healthcare policy reform ever could. Already companies such as Entlitic are preparing for this version of the future, while some health unions are fighting against change. Similarly, educational establishments like Holberton School or 42, which teach coding, don’t have teachers in the traditional sense of the role. They have educators or coaches who guide the students through learning, but the students self-teach through reading and group project. These types of schools are in a minority today, but will, over time, become the norm.
Thousands of pages have been written on change management. The fundamentals can be summarised in two words: explain first. In many western countries we are witnessing the rise of populist political leaders. They appeal to the fear of change, the fear of globalisation, the fear of losing jobs, the fear of foreigners…. The alternative is courageous: it is to embrace change and, for political leaders, to explain the transformation and embrace much needed reforms. All this fear leads to apocalyptic visions: in a digital world people will stop communicating, jobs will disappear, AI may turn against humans, the cost of health will become prohibitive, the planet will not be able to feed everyone, big brother will be limiting our freedom, production will be further de-localised to low-cost countries, there will be no room for surprise anymore… I think such forecasts are underpinned by misinformation and misunderstanding. They are an undeniable symptoms of fear.
The digital age will usher in a new kind of society which will be superior to any that has that has existed before it because it will enable individuals to grow and it will allow them to realise their potential through creativity and freedom by focusing on their true areas of interest. In a digitally transformed world, jobs which involve creativity and caring for others, in the form of “service à la personne” or local service, will be the most rewarding, while those simply repeating routine tasks will be paid very little. To come back to the teacher example, simply repeating a lesson year after year will be worthless, while helping students overcome specific challenges will be of near infinite value.
In the digital world, there will be plenty of jobs because there is so much scope for creativity. Machine learning AI will essentially become an extension of who we are just as a car is an extension of how we move from A to B. The cost of health will decrease because we will be able to identify most illnesses in their early stages, the planet will deliver plenty of food because we will find new ways of producing proteins, either through growing protein-rich vegetables, or through cloning. Indeed, each of our activities will be recorded, but we as individuals will own the cryptographic key. Productivity will be partially re-localised because means of production will be more readily available thanks to advances in technology such as 3D printing.
The digital transformation is both driven by, and drives, major change in the IT infrastructure. The digital economy requires massive amounts of computing power and data storage. And the solution forms the basis of what we commonly refer to as “the cloud.” Software today is to become what mass production was to the 20th Century. In IT, as much as anywhere else, people are afraid of change; but change is inevitable and the sooner the new technology is embraced the better the chance for businesses to win in the new era.
The secret for success is to utilise new technologies to reduce the cost of routine tasks and embrace digital transformation. While this will lead to job losses in the short-term, it will eventually give way to a fairer and liberating society than the one we have today.
Jérôme Lecat, CEO at Scality
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