It’s been a minute. If there’s one phrase that perfectly sums up 2020, that could be it. A year that has seemed both endless and fleeting. We’ve drifted through it in a blur of groundhog days punctuated by fear and uncertainty. For those of us fortunate enough to have kept our jobs, or found new ones, and have been able to work from home (WFH), the last vestiges of work-life balance have probably disappeared.
As we celebrate the fifth anniversary of the United Nations Framework Convention on Climate Change’s (UNFCCC) Paris Agreement that seeks to ‘limit the temperature increase to 1.5°C above pre-industrial levels’ against a backdrop of what, in an ordinary year, would be a headline grabbing list of climate disasters, our reaction to the pandemic has demonstrated what can be done with an abundance of political capital and public will. Millions of people around the world have agreed to – temporary – suspensions of many of their ordinary civil liberties. National and regional governments have mandated new operating requirements for businesses and regulated our access to and conduct in public spaces.
Cooperative international efforts have helped to speed and coordinate vaccine developments and trials and rush them through new drug approvals procedures. Cities around the world have reported rising air quality levels as economic activity and travel have decreased. The demand for plant-based foods is increasing exponentially, propelled in part by consumers’ health and hygiene doubts after COVID outbreaks at some meat processing plants, but also because working from home has allowed us to take a different approach to our diets, one that is less based around grab-and-go preprepared foods close to workplaces.
Preoccupied with navigating COVID-19 operating procedures, juggling work and childcare, home education, shopping, cooking and dealing with daily bureaucratic hurdles, most people could be forgiven for not noticing that 2020 has also been a year of radical experimentation in business methodologies. Risk averse companies, whose leaders are understandably wary of incurring the disruption and cost – and risk – of radically altering business practises that have delivered profits to owners and shareholders, have witnessed the weaknesses of concentrating people and resources in centralised locations.
They’ve adopted or accelerated long-delayed technology transformation plans. Introduced cloud based collaboration tools that allow staff to work remotely while beefing up security to prevent proprietary information and financial operations being exposed to malicious hacking attempts and industrial espionage. Designed as short-term measures to keep their businesses open and functioning, it’s their adoption of a non-human workforce that has the greater potential to reshape the business methods of the future.
When we talk about robots we often get fixated on the idea of the humanoid machines in TVs and movies, or the giant crane-like machines we see in car and aviation production plants. And while manufacturing and distribution companies are certainly investing more heavily than ever in robots, drones and other automated technologies, it’s the encroachment of robotics into the world of white-collar work that’s likely to have greater impact in the long-term.
Chatbots and business automation services, often assisted by artificial intelligence technologies, are part of this incoming wave of business innovation. Advances in natural language processing are making it increasingly hard to discern between human and machine customer service operators in our first-line contacts with many brands, and they never need to sleep. If a customer chooses to go online to buy at 10pm, few businesses can afford to risk losing those sales. At a time where businesses are worrying about servicing existing overheads and debts, they’re looking for more cost-effective ways of responding to new consumer habits without increasing headcount.
Chatbots, automated customer servicing, inventory management, ordering, dispatch and accounting services are meeting those needs. IBM reported a 40% jump in demand for the Watson Assistant supercomputing software that underpins many of these chat systems. And, with many of its staff confined to home, financial payments giant Paypal was reportedly using software to field 65% of its message based customer queries as of March this year. And they are affordable enough that small and medium enterprises can afford to add them to their operations toolkit.
In a recent podcast I referred to this phenomenon, the mainstreaming of automation, as endsourcing. Over the last 20 years, the business landscape has been marked by the use of outsourcing – third party companies and contractors – to provide services that would once have been delivered in-house. More recently we’ve seen a wave of insourcing, such as Procter & Gamble’s moves to bring back billions of dollars of media buying from external agencies. This process, endsourcing, can contain elements of outsourcing or insourcing, but it’s essentially a technological fix. If companies can save enough money through their use business automation tools without affecting their sales and profits, those tools only need to be nearly as good as the people they replace. And that’s probably the end of the line for those human workers.
While COVID-19 has not created these conditions and trends, it has accelerated them. Changes that might have taken five or more years have been rushed through in this first year of the decade. Hospitals that have spent hundreds of dollars on diagnostic assisting machines like India’s Mitra or robot cleaners that sterilise rooms with ultraviolet light will not put them in a cupboard once everyone has been vaccinated and hire back the workers they displaced.
Machines aren’t perfect but they don’t get sick. And they don’t land companies with damage to their reputations if working conditions contribute to future outbreaks amongst staff. Businesses have also figured out that if they can run their teams remotely they can reduce their overheads. They can downsize their premises and pass on part of their operating costs to employees who are now paying for their own Internet, electricity, printing and other work-related expenditure. Remote working offers companies the ability to hire foreign talent without the need for expensive visas and relocation costs. Or the need to draw talent to urban centres and pay salaries weighted towards their elevated living costs.
We’ve seen a lot of economic interventions this year in the forms of short term stimulus packages. There have been direct payments to people and businesses. Tax credits, bank lending programmes, debt forgiveness and delayed repayment of debt. A lot of creative solutions to keep economies moving. What we haven’t seen has been a commitment to address the longer term structural changes that the pandemic is likely to result in.
With economies expected to bounce back in 2021, many workers will return to their offices and cubicles full-time. But we can no longer wait to have the conversations about what will replace the jobs lost to automation. If we are to reorient towards new industries and economic sectors we need the infrastructure to do it. Green New Deal-type investments are one solution: public investment and government intervention fuelled the so-called Golden Age of Capitalism that led to rising prosperity and falling poverty in much of the world from the 1950s to the mid-1970s. Ongoing, progressive retraining schemes, expansions of the public sector and basic income schemes are all options that can be explored.
Beyond that, we may need to look at a fundamental reorientation of the way think about work. In the same way we no longer regard cars as symbols of our identity, we may have to come to the same realisation about the jobs we do. Above all, I think we may have to accept that the uncertainty we’ve felt this year is going to be a part of the new normal. 2020. It’s been a minute.
The Futurist is a regular column by Matt Armitage for The Citymaker.