Johannesburg, 02 Aug 2017
While many South Africans find it too depressing to follow local politics, the unique nature of the current American political situation makes it fascinating to watch. In observing the ongoing trials and tribulations of the Trump administration, one thing is clear - the president has repeatedly stated his desire to bring back jobs to America by reintroducing manufacturing, says Jannie Strydom, CEO: LarcAI.
The real question, of course, is how is he planning on implementing this? More crucially, what sort of impact will the burgeoning field of automation through robotics and artificial intelligence (AI) have on such an approach?
To understand, we must first look back to the mid-80s, when American giants such as AT&T, United Technologies, and General Motors moved manufacturing to developing countries with cheap labour costs, starting a trend that saw high-cost countries follow suit for decades to come, in an attempt to obtain a competitive advantage. It didn't take long for the services industry to jump on the bandwagon, as an increasing number of businesses began moving their back-office functions, call centres and IT support to countries like India and Indonesia.
When one considers that today, many of the world's more industrialised nations - such as those in Europe, along with China, Japan, and the US - have already shown fertility rates of less than two births per woman, we are facing a population implosion in the countries where the bulk of the world's intellectual capital and economic activity is concentrated. These countries have aging populations, with some relying solely on immigration to sustain economic growth. In a recent interview (https://www.youtube.com/watch?v=MP5Z14X-moM), SA-born entrepreneur Elon Musk also predicted that this will become a major issue in the next few decades.
Extrapolating from here, we can expect the rest of the world to follow suit, which means that in the not too distant future, we will start to see a worldwide decline in young people entering the labour market. This will lead to a decline in consumption and economic activity. Should this happen, the future growth prospects of companies will be demolished, resulting in the collapse of share prices and the pension funds on which the massive elderly population relies.
So, what can we expect robotics and AI to do to prevent this dystopian future from occurring? In fact, these will both play a very important part in preventing this from happening, by assisting the shrinking population to become more productive - producing and consuming goods and services that will boost the economy. A good example is the creation of a self-driving car that could bill customers per trip, while also scheduling and paying for its own services and fuel.
According to research conducted by Accenture, it is estimated that AI has the potential to double the economic growth rates annually by 2035, through the fostering a relationship between humans and machines.
Ultimately AI technologies will enable people to create, imagine and innovate new things, making them more efficient and timeous. Artificial intelligence, being free of human biases, would certainly benefit workers by taking over the most mundane and repetitive parts of various processes. These are the kind of tasks that humans generally find boring and thus hate undertaking. Using artificial intelligence to perform these tasks instead would not only eliminate the potential for human error but more critically would free up skilled workers to focus on more business-critical tasks.
Automation is not a new concept either. If you think about it, the first industrial revolution in the late 1700s was built around automation, with mechanical production driven by steam and water. The second such revolution began around 1870, with the division of labour and the use of electrical energy, whilst the third industrial revolution started in 1969, based on the use of IT and electronics. Each of these eras played out over decades, and every time resulted in more jobs and higher living standards than before. Artificial intelligence and robotics in the office and home environment is part of what is now described as the fourth industrial revolution. As before, we can expect it to take place over decades and it will surely also result in an abundance of new and rewarding jobs for everyone.
The rise of this new generation of technology - which includes robotics, artificial intelligence, and 3D printing - means that the labour component of the cost to deliver goods and services is rapidly diminishing. As a result, it will become more attractive to move the production of these goods and services closer to their consumer markets, as this will cut down on logistics costs. In other words, artificial intelligence and robotics could well be a key driver in bringing outsourced American factories back within their borders.
And it will not only be factories, but contact centres, back offices, and even entire supply chains, all of which will require fewer floor-level workers, but will at the same time employ more talented and skilled people with higher salaries to perform other functions. These would include specialist jobs like the organisation's accounting function, as well as the people required to build and maintain the software necessary to keep the robotics and artificial intelligence functioning effectively.
One of US President Donald Trump's key election promises was to bring back factories and jobs to America, even though he may not have known exactly how he is going to achieve this. It is interesting to consider that it may well be advances in technology and American innovation that ultimately serendipitously play a critical role in making his promises a reality, without him even having to lift a finger.
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