A number of recent reports have warned that automation and robotisation pose a serious threat to employment. So what are the risks and how can we prepare for them? Two experts gave their views on this at the recent South by Southwest (SXSW) event.
“Experts predict that within thirty years machines will take over from human beings in the world of work.”
It is hard to argue against strategy expert Melanie Cook, whose opinions reinforce the view set out in a number of reports that artificial intelligence, robotisation and task-automation are a threat to people’s jobs. But just how great is the risk? Who is at risk? And above all, what solutions do we need to implement in order to limit the damage and benefit to the maximum from the changes that are on the way? Melanie Cook, Head of Strategy & Content for the Asia region at consulting company SapientRazorfish, and John Hagel, Management Consultant and Co-Chairman of Deloitte’s ‘Centre for the Edge’ – which carries out original research into new corporate growth opportunities – provided answers to these questions during well-attended sessions at the South by Southwest (SXSW) Interactive festival in Austin, Texas on 10-14 March.
There is a coming global trend towards using robots in the workforce. According to a study by UK thinktank Reform, 90% of government administrators in the UK, plus tens of thousands of employees in the health sector, could be replaced by chatbots by the year 2030. The conclusions drawn by the World Economic Forum (WEF) last year are still resonating. Its research shows that there will be a net loss of over 5 million jobs in 15 major developed and emerging economies by 2020. On 24 March in San Francisco the WEF officially opened a Center for the Fourth Industrial Revolution, set up to study the ethical, legal and social problems posed by modern technology. Other reports, including a study by the McKinsey Global Institute, entitled ‘Technology, Jobs, and the Future of Work’, portray a future where most jobs will be at least partially automated. The report states that automation could come to affect 50% of the world’s economy, i.e. some 1.2 billion employees.
The figures vary depending on the hypothesis and the timeframe, but one thing is sure, change is underway. And it will impact most jobs. John Hagel points out that
“an increasing number of people believe that technology is going to steal their job. I think this fear is fully justified even though this will happen to varying degrees [...]. Some studies predict that 85% of jobs will be automated. I actually think that 100% of ‘jobs’ as they are thought of today will be affected, it’s just a question of time”.
Melanie Cook also believes that white collar and blue collar workers will all be faced with similar difficulties. She gave the SXSW audience the example of the Fukoku Mutual Life Insurance company in Japan, which is making 34 employees redundant and replacing them with IBM’s Watson Explorer. A robot has also been promoted to the post of artistic director in Japan.
So workers facing the effects of automation have two options. They can work alongside the machine in a spirit of intelligence augmentation, or seek to differentiate themselves and highlight their human qualities.
Human qualities the key differentiator?
The title of John Hagel’s session at SXSW was ‘Robots Can Restore Our Humanity’. He believes that their arrival on the work front could provide an opportunity to change our attitude to work. There are so many
“specific tasks, activities that have to be defined and standardised in order to get them done in the most efficient way possible.” The Co-President of Deloitte’s Centre for the Edge pointed out that “today, adding value is all about cutting costs, becoming more efficient, doing things faster. Now that’s exactly what we expect algorithms to do”.
And this is precisely why human beings ought now to be moving away from these tasks.
“Machines are more efficient at this type of work. People make errors, can be distracted, fall ill, and so on, not so machines,” he underlined.
So people ought to be focusing on tasks that can create greater value by getting the best out of the human characteristics that robots do not possess: imagination, creativity and emotional intelligence.
“Efficiency is for robots, not for us,”
Hagel told the audience.
Interaction, friction, opposing points of view, which some people might see as leading to loss of efficiency, could well turn out to be a key source of creativity, he argued, suggesting: “Robots and technology could be the catalysts we need to put an end to the kind of work that makes us act like machines, and could help us create a world which allows us to be more human.”
"Efficiency is for robots not for us. Human's value is in imagination, creativity, emotional intelligence" says @jhagel #futureofwork #sxsw pic.twitter.com/mb3ruO4BcZ — Atelier BNP Paribas (@atelier_us) March 11, 2017
Hagel believes that the two objections most often raised to his proposals do not hold water. The first assertion is that not everyone can be creative and imaginative. Hagel thinks this is false, that these qualities are actually inherent in human beings. And the current education system, especially in the US, are to blame for making us even doubt this truth.
“The state system in the United States was set up to teach children to follow rules, and it’s these institutions that have changed us. We need to get back to imagination, creation, emotional intelligence,”
especially as there is a clear demand for such qualities, with the growing popularity of unique, tailored, perhaps ‘home-made’ products that meet very special needs and desires.
The second most often stated objection to John Hagel’s solution is the fact that there will not be sufficient demand for creative skills. This idea is closely bound up with the current work model, where most necessary tasks are routine tasks in a world motivated by efficiency and the imperative to reproduce a standard product. Hagel is therefore quite sceptical about the supposed need to concentrate on studying scientific subjects, maths or engineering. However, SapientRazorfish strategist Melanie Cook did not share his view on this, arguing that it will be essential to be able to communicate with machines.
Intelligence Augmentation the key?
Melanie Cook’s solution seems a straightforward one and in a sense complementary to John Hagel’s approach. Man ought to collaborate with Machine in a spirit of ‘intelligence augmentation’,
“which takes the best of human intuition and imagination and combines them with the capacity of artificial intelligence”
– the idea being that human skills combined with robot skills will always be superior to the capabilities of a person acting alone or of a machine alone.
Cook explained her views with a rather chilling example:
“Machines are becoming more intelligent than us and could go further faster, but with limits. Imagine that the goal is for instance to eradicate cancer. The fact is that the fastest way of doing that is to kill the cancer carrier, which means killing the person that we’re trying to protect. A human being knows that; a machine won’t necessarily know.”
Intelligence Augmentation is now gaining ground in the business world. A Deloitte report published in February entitled ‘Rewriting the rules for the digital age’, cited by Melanie Cook during her SXSW session, states that some 75% of all companies have already integrated cognitive and artificial intelligence (AI) technologies or are currently testing out adoption with their employees. However, only 17% of the organisations polled said that they were ready, from a Human Resources point of view, to manage a workforce comprising people, robots and AI systems working together. So there is still a long way to go, but Melanie Cook believes that this approach is nevertheless taking shape.
“Everybody knows this to be true, but hardly anyone is reacting. It’s a bit like receiving an email from an artificial intelligence system which says ‘In a few years I shall take your place at work’. And you reply ‘Well, we’ll see about that’. But that’s not the right answer!” Melanie Cook thinks people should ask themselves whether there’s a startup that poses a serious threat to their business. And “if you can’t really beat them, see if you can go and join them!”
The other path of action is about legislation and laying down rights.
“Prepare the legislators for what’s coming. Get them to think about the workforce and the future workspace,”
she urged the audience.
So there appear to be many solutions. Melanie Cook’s final suggestion was about “employability loans” – something not too far away perhaps from the idea of a universal monthly payment, which is currently being much talked about in the media.
“People need to be able to borrow money to build up their skillsets and retrain and then pay off their debt as soon as they find work. These loans could even sometimes be granted by an employer rather than the bank to a future employee, who would then reimburse the loan at a low rate of interest.”
This might be a useful option for countries with a low level of social protection, such as the United States. At any rate, it is high time governments and companies began to think about undertaking the appropriate initiatives.
(Source : www.atelier.net)
Robovision: “Within five years artificial intelligence will have become omnipresent”
Robovision has emerged as the best-known AI player in the Benelux countries. However, this young firm has an even more extensive vision. “Healthcare, agriculture, the environment… within five years artificial intelligence will have become omnipresent,” foresees CEO Jonathan Berte. BNP Paribas Fortis is an important partner in their growth.
Jonathan Berte, who trained as a civil engineer, smiles as he thinks back to the pioneering years at Robovision. “In fact, when I was a kid I had a really analytical mindset. In the scouts and at school I used to keep note of absolutely everything. It was really important for me to collect information. I was a kind of ‘infoholic’. But just gathering information gets you nowhere. That also goes for information that’s just stored on hard disks. The added value comes from using that information efficiently.”
How exactly do you do that at Robovision?
“Technology is evolving at lightning speed. These days just about everybody has a smartphone in their trouser pocket. Apart from anything else, these devices create a great deal of information, so we need to keep up on the algorithmic front and artificial intelligence helps us with that. That’s how we can provide governments, institutions and companies large and small with a platform for automated decision-making on the basis of visual data. In addition we constantly ask ourselves how we can democratise artificial intelligence. So in a way we’re like the Airbnb of artificial intelligence.”
What might that visual data be for example?
“In May, in collaboration with the University of Antwerp and security firm Securitas, we set up a smart camera in a shopping street in order to measure to what extent people were complying with social distancing requirements. This is important information for the decision makers in this country. Of course we don’t have to look through the images ourselves. We get them analysed using a specific type of artificial intelligence – self-teaching algorithms or what are known as neural networks. They’re designed somewhat along the lines of our own brains, though not nearly as complex.”
Which brings us to the fashionable expression ‘deep learning’. Are machines eventually going to make themselves smarter than us humans?
“Oh, that’s already underway at this very moment – in radiology, among other fields, plus also in games. Remember the legendary Go match between South Korean grandmaster Lee Sedol and a computer, which was beautifully represented in the 2017 documentary film AlphaGo? We’re also focusing on deep learning, because neural networks are very efficient at dealing with visual data. However, it will be some time yet before AI can equal a human being in intuition for instance.”
You’ve now evolved from a startup to a scaleup. Where do you want to be in five years’ time?
“The society of tomorrow will be one in which everything will be properly measured and dealt with. For instance, we’re also working in the field of horticulture, where AI can be applied in quality control – to spot fruit with an abnormal shape or colour, say. Lots of agricultural and horticultural businesses have got into difficulties over the last few months because pickers from Eastern Europe weren’t able to enter this country. Those businesses will very probably be investing in AI and automation over the next few years. In these kinds of fields, the coronavirus has taken us to a digital society almost overnight.”
What sort of partners do you need in order to succeed in your aims?
“During our growth from startup to scaleup, BNP Paribas Fortis has always been an important partner. You have really taken a lot of trouble to understand our story. Of course you do need to grasp our plans from a banking standpoint in order to be able to assess the risks. But quite apart from that, I have the feeling that you’re particularly good when it comes to supporting the whole tech and startup scene.”
The conversation manager: essential and permanently online
Coordinating a company's social media strategy is a task in itself. Who will you use to handle this? And what about involved customers who suddenly get too involved?
Because of social media, the role of a traditional marketing manager is evolving more and more towards being a conversation manager: someone who facilitates consumer communication. This includes communication between customers themselves and communication between the customers and the company.
Some key tasks in the conversation manager's job description are:
- Uniting and activating ‘branded fans’, as they will recommend the brand to friends and family.
- Listening to what people are saying about your company and seeking their active contribution to your products and strategy.
- Creating content worth distributing in order to encourage discussions.
- Managing these discussions.
- Ensuring your work is very customer-oriented and customer-friendly through customer care, i.e.by responding faster and providing more than what the customer is expecting.
Some companies are big enough to hire a full-time conversation manager. In other cases another employee will take on this role part-time. A third possibility is using a specialised company.
Caroline Hombroukx, conversation manager at content marketing company Head Office:
“No matter which option you go for, communication in social media must come across as personal. There is definitely a reason why large companies such as Telenet and Belgacom have created a fictitious person to deal with their customers; Charlotte and Eva respectively. The conversation manager also has to know the company and its social media strategy very well. It may therefore be an advantage if someone in the company itself takes on that role. That person is right at the source and so can distribute information, take a quick picture and post it online, etc.
This task is not for everyone. A conversation manager must have experience with social media, have fluent communication and writing style and must be empathetic, positive and solution-oriented in his or her dealings with customers. Prior training is not a luxury, because the employee must be very aware of the company's content strategy. The audience is varied and unpredictable. You have to decide time and time again whether certain content is or is not suitable for your target group. It is also not a nine-to-five job: the online world keeps on turning even at night or at the weekend."
The advantage of hiring a conversation manager from an external company is that in principle the expertise is present. In that case the challenge is to know the company to such an extent that the customer has the impression that he or she is talking to a real employee.
Getting angry is out of the question
Traditional marketing and advertising are a one-way street. If they do not work, they are a waste of money. However, they are not likely to result in angry comments. A company venturing out on Facebook, Twitter or other social media, can be sure to receive comments and reactions. Including negative ones. Caroline Hombroukx:
“On social media the consumer is suddenly right next to you banging the table. It is important to respond well to that. Getting angry yourself is out of the question. You need to respond by showing that you understand and you are taking the question or complaint seriously. Everyone following the discussion must see that the company is providing a quick answer and is trying to find a solution. If a mistake has been made, you can acknowledge this openly and honestly. You can also show the problem as something positive: as an opportunity to improve your brand, product or service. Of course you must find a suitable solution in the end. If the person sharing the complaint becomes too negative, you have to try and divert him or her to a private channel: a private message on Facebook, a direct message on Twitter, an e-mail or a phone call."
An enthusiastic, understanding response also works well if the consumer is sharing something positive about your brand, company or service. Thanking the consumer strengthens the bond between the company and the customer. Caroline Hombroukx:
"The dialogue with the target group is an opportunity to improve your product or operations through constructive criticism. Make customers feel involved. It creates a strong relationship. If you are publishing a magazine or starting a poster campaign for instance, you can let customers choose the best layout or title from three options posted on Facebook, for example. Everything that engages customers can only strengthen their commitment."
Social media dos and don'ts
- The consumer is always right (even when this isn't the case).
- Be open, honest and friendly.
- Use a personal style.
- Respond quickly to any questions or reactions.
- Stay positive and be understanding.
- Do all you can to engage your customers.
- Come up with a free gift every now and then.
- As a brand, try to avoid political topics.
Social media and e-commerce: opportunities and risks
The huge popularity of social media brings new opportunities, but has resulted in some new stumbling blocks as well. What are the most recent trends? And how should you respond to them?
Social media such as Facebook, YouTube, Twitter, Instagram, etc. seem cutting edge, but the principle is as old as the hills: word of mouth, sometimes abbreviated as WOM in marketing. Even in the heyday of the mass media, positive recommendations from neighbours, family and friends remained important to a company's success. Newspapers, magazines and television advertising were the first channel introducing a new product to consumers, but word-of-mouth turned out to play a decisive role in what matters most: consumer behaviour. Consumers shared experiences and thereby affected the behaviour of their fellow consumers. Today, more than ever, they do so through social media.
Consumers persuading consumers
Social media are the contemporary, more sophisticated and super-fast successor of old-fashioned word-of-mouth advertising. They are a catalyst. Social networks allow people to exchange views, share experiences, express their dissatisfaction, etc. more quickly than ever.
In addition, more and more consumers are opting for a "social search" over search engines such as Google to find information. They consciously do not search the entire internet, but approach their friends on Facebook or contacts on LinkedIn or Twitter. It speeds up the search and makes the result more reliable. The idea is that if X thinks it is good/nice/beautiful, we will probably think it is good/nice/beautiful too. There is also the option to ask questions and really discuss the product or service you need information about.
Consumers talk about all sorts of products (offline and online), from new detergents to new car models. And it is not just young people who are sharing their experiences about products and brands. Young and old, male or female: everyone does it. All these recommendations between consumers are worth gold.
We can illustrate this with an example: computer manufacturer Dell assumes that 25% of its customers choose their brand after it has been recommended by another user. The average purchase value per customer is about 210 dollars. Based on this amount, the value of every recommendation is estimated at 42 dollars. The more consumers Dell can convince to buy its products, the more money it makes.
However, the reverse is equally true: bad word-of-mouth advertising can have devastating effects. Particularly in this age of social media, a bad reputation does not take long to spread.
Social media in 2014
Perhaps Facebook will no longer exist in ten years' time, but it will most certainly have been replaced by something else. Social media are here to stay. It is therefore important for companies to build a good social media strategy. They can start by thinking about which channel they want to use for which content and objective. What do you need to take into account?
- Content (the message to the consumer) is still the key part, but the importance of segmentation is increasing. The audience is varied, so not all content and every channel is suitable for everyone. As a company, it is best to divide your target audience into sub-target groups. You can then choose specific content and a channel per sub-target group.
- Create real-time content: define a number of key moments in the year in advance and use these wisely. The World Cup, back to school, the summer holidays, etc. are all events that happen regularly and companies can respond to in a clever way. The trick is to find a good link between the key moment and your product. Be creative in this respect. If a school bag brand presents its content at the end of August, it will have to use an original approach to avoid coming across as predictable.
- Social media are predominantly a mobile story: most consumers are switching to smartphones and tablets. It is no coincidence that the four best-known social networks are also in the list of most popular mobile apps: Facebook, YouTube, Instagram and Twitter. In any case, your content (both on the website and on social media) will have to be mobile-friendly.
- The importance of customer care is only increasing. Consumers will now use social media more than ever to find information, ask questions and make comments.
E-commerce: the 3 steps to success
Which stages should a company that is venturing into e-commerce go through? And how do you avoid customers and employees getting stressed and frustrated in the process?
Phase 1: managing the channel conflict
When a manufacturer, distributor or importer starts selling the products they previously only sold to shops online themselves, the shops may experience that as a channel conflict. Their supplier has now become a direct competitor benefiting from low start-up costs as well as more customer convenience. But does the supplier have a choice? If the supplier does not sell online, some customers will go to a seller who does. The solution? Benny Sintobin, Manager of e-commerce specialist Frucon²:
"The channel conflict is a perception debate that is more emotional than rational. E-commerce is unavoidable, so you had better adjust. The roughest edges of the channel conflict can be smoothed out by being a ‘friendly’ online store. With that I mean that you have to approach it correctly, with empathy for the party that may be at a disadvantage. You have to be bold enough to tell the customers of your distribution channel in advance what you are planning and which rules you are going to follow. If you start up everything on the quiet, you will cause frustration and negative emotions."
And these are totally unnecessary, because the new situation can be favourable to the distributor or shop as well. The distributor's online sales channel can also refer to his customer's website or shop, for example. Benny Sintobin:
"Take a bicycle manufacturer offering bicycles to customers online, for example. The website could allow consumers to combine certain materials and colours online in order to create a personalised model. The bicycle can be sent by courier, but can also be delivered to a retailer near the customer for the customer's collection. In that case the retailer will have to be satisfied with a smaller margin and the fact that he has gained a new customer, who will come back later to buy a helmet or a bicycle bag or to have his bicycle serviced. The other members of his family will follow his example for their bicycles and accessories. That way everyone wins."
Downward price spiral
When you say channel conflict, people almost automatically think about a price war between shops competing with online sales channels offering the same products at a lower price. According to Benny Sintobin it is therefore important to put a fair, correct price on the products:
"When manufacturers engage in e-commerce themselves, they set the product's retail price. The price is there online in black and white. In that case shops can rarely afford to charge a higher price. That is why the pricing must be correct, so that shops can still earn a living.
In practice a channel conflict often causes the reverse phenomenon: it is usually not the manufacturer, but the shops starting the downward price spiral. That is in fact the biggest threat to e-commerce: the shop trying to hurt the supplier. Major players striving towards market dominance can afford to destroy their profit margins. However, smaller manufacturers and brands cannot compete in such a price war. This proves once again the importance of making good e-commerce arrangements."
Phase 2: geographical expansion
Once the channel conflict has been well and truly digested, it is time for the next phase: tapping into new markets. For larger SMEs e-commerce is often a perfect way to gain more of a market share. For example, take a Belgian brand that achieved a nice market share in Belgium by selling in retail points as well as through its own online sales channel. Perhaps the brand has developed some brand awareness abroad through a couple of shops in the capital, for example. Benny Sintobin:
"In that case it is entirely possible that some consumers abroad know the brand already, but are unable to get to the shop because of the distance. It would be very unfortunate not to take control of that potential channel yourself and to leave it to Amazon, would it not? Online your products are available to all customers. Conclusion: expansion abroad with an e-commerce channel could be the first low-hanging fruit that is therefore easy to pick."
Phase 3: reinventing your business model
The third phase in e-commerce is a leap in the dark. Company thinking is traditionally product-, market- and wholesale-oriented. Take a company manufacturing or importing pots and pans, for example. That product is part of the world of cooking and dining, but still the sales strategy traditionally focuses completely on the product. However, the online activities offer opportunities to change tack and create an entire world around the particular product. You can work with other companies in that respect: a publisher to create content about dining, a candle manufacturer, a herbs specialist, a table linens manufacturer, a supermarket offering home delivery, etc. Benny Sintobin:
"Around Valentine's day or other key moments of the year you can create content and an entire world where those pots and pans belong. In that case what you sell online becomes more of an experience than a product. The effect is further strengthened if each of the partner companies present that experience on their sites as well. That way you enter each other's customer base and target groups. And you also immediately make sure that your social media really start to work for you. Consumers will tend to like a Valentine's experience more than just a set of pots and pans. In other words, you become a "love brand" rather than just an everyday product."
3 damaging e-commerce blunders
- You fail to inform the customers of your distribution channel of your e-commerce plans and you do not agree on clear rules. Clear arrangements make good business partners.
- You fail to gain sufficient support from all your company's employees. Non-believers and sceptics are best convinced with figures and orders. And you should make sure that dreamers keep both feet on the ground: Rome was not built in a day.
- You focus on bonus systems rewarding targets in a single sales channel. Commercial employees getting a little extra for the sales figures in actual shops are not happy with rising online sales figures, even though they benefit the entire company.