Impact of Automation (Part 2)
Danilo McGarry is head of Automation and AI & Key note speaker who experienced Automation on all layers: Personal, Company, Government. In the episode we discuss how Automation and AI will “take over the world”.
Important: This is the second part of the discussion with Danilo. The first part can be found here: https://automationimpact.io/ai9_automation-impact-part-1/ The video below contains both parts recorded together.
The Script of the Episode:
00:41 Automation as a lifestyle
05:10 Scaling ability
10:41 Technical changes vs changes in mindset
17:34 How can government prepare for the changes?
27:15 Differences between changes in automation and finance sector
33:01 Why we are more efficient, but our work week is still the same?
37:57 TOP 3 challenges associated with automation and AI and how to address them
About the Guest: Danilo McGarry, Head of Automation & AI @ Alter Domus, London Area, UiPath MVP
There was a big shift in early 2000s with Kaizen, Six Sigma and reengineering. New version is happening now and the end of this year / beginning of next year will be a movement of continuous automation, according to Danilo. But it all takes time, some companies take two-three years to come to that.
What is going to happen soon, is that the company will mature in its automation journey and they workforce will no longer consist of operation people, they are going to become operation / IT people where they are going to have the tools around them for automation. For those non-technical some low-code solutions, for the tech ones a bit more sophisticated solution. It will come very soon – it is already happening with some companies – a hybrid or a fusion between operations and IT. Here, the normal worker will be a “new version”, “operation 2.0.”.
The current version of operations, when they see something inefficient, they focus on different tasks and take the pay-check. The new version – the person comes to work, see something inefficient, automates it. If it is too big for them, they get in touch with CoE and they’ll do it, they will get it out of the way and move on: “They will not settle for a job that is inefficient. Their job is to iron out the inefficiencies.” That is the future worker we will see everywhere in couple of years.
The ability to scale is another huge added value to automation which is now quite visible due to the last year’s COVID pandemic start when the workers were not able to come to work from one day to another. Some aspects to consider:
- The average cost of human labor doubled by 2018 (since late 1990s, the EIU study)
- The average cost of robot license went down more than eight-times (since 1990s)
- More vendors offering automation
- More talent in automation skills (more widespread knowledge)
- Cheaper Automation skills (as more people have them)
- Technology improvement (tools for automation easier to use)
- The maturity of vendors (consultancies to help with implementation)
- Amount of use cases has grown exponentially
- Competitive relevance (if they do it, you have to as well, if you want to survive)
- Regulatory acceptance
Technology vs mindset
Even though the technology is improving fast, it still takes time for companies to adopt changes and change mindset to understand the power of these technologies. Also, the government will be playing catch-up with unemployment rates at 15-18% (Danilo’s prediction), majority of those because of automation as the companies will go after profit in the beginning rather than being ethical and re-skill their employees.
The big player will be the government imposing taxes on companies with such behavior. The best thing here would be to use those money for re-skilling the unemployed with hope that schools and universities will be caught up by then with courses and lectures on automation, AI, etc. Another option is adopting quotas on companies to re-skill people.
“This is always the fear that comes with any innovation” – we expect that the worst will happen. Still, Danilo thinks that it might be bad for short time, but new jobs and challenges always come with new technology. The shift will also happen with employment – many institutes predict that there will be a majority of freelancers by 2030 as the companies will no longer be able to pay the cost for human labor (which will continue to rise). It is safe to assume that the whole labor market will change and while automation will play a big role it is not the only constant causing change.
Government and changes in the market
Working with government (even when using same technologies) is quite different because of the people’s mindset. People in companies are valued by their extra work or implementing changes by bonus, promotion but this is never the case for the state service and administration. The salary is calculated exactly by your education and skills and cannot fluctuate based on your actual approach to the job. Losing a job is also much harder in government set-up as each position requires a lot of procedures not only to be created but also removed. Inserting the mindset of continuous improvement is much harder here.
Still, the government will be pushed to adapt not only because of automation or AI but also with blockchain and cryptocurrencies which will probably substitute currencies of today. Some governments are already adapting (such as China) but the change will be mostly driven by public.
Differences between changes in automation and finance sector
There are always certain cycles in the history after which the change comes – horses to cars, means of transport between countries, currencies. “It is time for new cycle, new world order, new way of working, new way to think about life.” The new generations (Y, Z) have new mindsets than just pursue working more and faster. This will pose a question of “Are we really here to be robots, to pose for a job that we hate or are we here to do creative things, solve bigger problems… There are more interesting things coming than just people sitting in the office and copy-pasting stuff.”
Efficiency vs changes in the work hours
Some countries are already testing and implementing 3-day weekends. This is because we as humans are exhausted and not able to perform as machines even though we are behaving like them. Why do companies come with enhancements in the workspace as free coffees by barista, PlayStation, bean bags? We are sick of being robotic every day without having emotions. “While the generation X, our parents, worked extremely hard, many times physically building stuff with their own hands, the new generations (millennials, gen Z) see the things completely different and are not afraid to be radical.”
The 30-hour week will become normal because more people will be able to work which is a good way of keeping the employment rates steady. Still, such change cannot be implemented over and over and there will come a new world order to make sense of things again. Hopefully, we will be able to put new system together as countries.
TOP 3 Challenges with automation & AI and how to address them
- INSECURITY – don’t be afraid of the robots and let the change come (individual level)
- IMPACT ON SOCIETY – be conscious about your decisions (company level)
- LAG – wake up and catch up, be more strategic (government level)
Danilo’s message: “Try to think rationally about all of this. You cannot control everything; you can only control how you react to all of it. This is coming. There are some big changes along the way in the next ten years, or even less. Try to enjoy the process. Don’t fight it, be part of it. Try to be embedded into it. Take this time to ask some life questions: Why are you really here? Why are you really in your job? Is it for a paycheck or do you enjoy what you are doing? Cause if you do not enjoy what you are doing, you are losing the most precious thing – time. If you look at the wealthiest, most privileged people on Earth, the one thing no one can buy is time. And if you are wasting it doing robotic work – you can only blame yourself. You are a fool for doing that. So, go out, and find something you are meant to do, find something what your brain is built for and try to build memories you will be proud of when it comes to your last days. And along the way with these technological changes happening, just learn and grow as an individual and don’t be so insecure!“