IMPACT OF SMARTER COGNITIVE SYSTEMS ON SERVICE SECTOR JOBS? Tor W. Andreassen Professor Norwegian School of Economics (NHH) Director Center for Service Innovation (CSI)

Structure

• Frontline employees (FLE): brief background • Something is happening • Upside/Downside of technology • Some implications • Q&A.

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Service workers

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Self-checkout

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According to the Global EPOS and Self-Checkout 2013 study, the number of self-checkout terminal shipments will soar to 60,000 by 2018.

Something new is happenng

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Rotational tours are designed to provide scalability; their programmatic approach can be widely applied, even to blue collar workers. Transformational tours are designed to provide adaptability; their personalized approach requires a greater investment of management time, but allows them to tackle key issues and initiatives. Foundational tours are designed to provide continuity; their permanent approach helps codify the culture and institutional memory of the organization.

Something new is happening

• According to Freelancers Union and Intuit, more than 40% of the US labor force will be freelancers by 2020, i.e. they are not employed by a company.

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”Nearly one in three working Americans is an independent worker. That's 53 million people – and growing.”

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Amy L. Ostrom, A. Parasuraman, David E. Bowen, Lia Patrício, and Christopher A. Voss Service Research Priorities in a Rapidly Changing Context Journal of Service Research May 2015 18: 127-159,

THE UPSIDE OF TECHNOLOGY

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Robots 'invade' Starwood Hotels

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”A robot delivers an order of fresh towels to a room at the Aloft Hotel in Cupertino, Calif.”

"It is certainly not replacing our staff but it is augmenting our ability to service our customers,"

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Toshiba's humanoid robot "Aiko Chihira" at a Mitsukoshi department store in Tokyo. Photographer: Akio Kon/Bloomberg

The good news

* Many elderly people can no longer drive safely. Robotic cars will help them to be more mobile and independent * costs saved throughout the supply chain have the potential to lower costs and provide big economic gains * a trillion to the US economy from lower accident costs, lower insurance and boosted productivity * over 30,000 lives saved and 240,000 reduced car accident hospitalizations in the US alone every year

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Scie fi or not: Robots are on the move

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The strong, lightweight, agile robots wouldn’t replace the mason. Instead, they'd enable smarter labor by taking on repetitive, back-breaking tasks and introducing logistical efficiency. As an example, deploying materials across the site faster, and with fewer errors

Robots start to think

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A new deep-learning algorithm developed by Saxena and graduate student Jaeyong Sung enables a robot to operate a machine it has never seen before, by consulting the instruction manual – probably available online – and drawing on its experience with other machines that have similar controls.

AI with a human touch

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Whereas many other technologies demand that humans adapt their behavior in order to interact with “smart machines,” Amelia is intelligent enough to interact like a human herself. This equips her to deliver a top quality customer experience for any of the businesses in which she is deployed. Amelia doesn’t have just an IQ, she has an EQ as well. She is equipped to sense human emotions and respond appropriately

Is AMELIA smart??

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Meet Dr Watson from IBM

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“We’re going to enable personalized health care on a huge scale,” said John E. Kelly, a senior vice president who oversees IBM’s research labs and new initiatives.”

What will be really game changing is its ability to assist people with the complex and nuanced tasks of decision-making and analysis.

THE DOWNSIDE OF TECHNOLOGY

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IMPACT ON LABOR AND INCOME

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AI, Robotics, and the Future of Jobs (AARON SMITH AND JANNA ANDERSON, 2014)

” Will networked, automated, artificial intelligence (AI) applications and robotic devices have displaced more jobs than they have created by 2025?”

• YES: 48% • NO: 52%

N= 1896 experts

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How Canada’s oilsands are paving the way for driverless trucks — and the threat of big layoffs

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”Suncor Energy, Canada’s largest oil company, confirmed this week it has entered into a five-year agreement with Komatsu Ltd., to purchase new heavy haulers for its mining operations north of Fort McMurray. All the new trucks will be “autonomous-ready,” meaning they are capable of operating without a driver.”

“That will take 800 people off our site,” Cowan said of the trucks. “At an average (salary) of $200,000 per person.” = about $160 million per year (of base salary).

Prediction

• Using the most conservative estimate, expert members of the Institute of Electrical and Electronics Engineers (IEEE) have estimated that up to 75% of all vehicles will be autonomous vehicles by 2040. We can now be fairly certain that these occupations will experience job losses in the next 25 years. - Taxi and Bus Drivers - Truck and Delivery Drivers - Car Manufacturers and Car Salesmen - Mechanics Doctors/Surgeons/Lawyers/Insurers - Traffic Cops, Driving Instructors and Parking Wardens . - Train and Plane Industry

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“For workers to win the race, they will have to acquire creative and social skills.”

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The study, a collaboration between Dr. Carl Benedikt Frey (Oxford Martin School) and Dr. Michael A. Osborne (Department of Engineering Science, University of Oxford), found that jobs in transportation, logistics, and office/administrative support are at “high risk” of automation. More surprisingly, occupations within the service industry are also highly susceptible, despite recent job growth in this sector, they say

http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

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”At the opening of Japan’s Robot Revolution Initiative Council on May 15, Abe urged companies to “spread the use of robotics from large-scale factories to every corner of our economy and society.” Backed by 200 companies and universities, the five-year, government-led push aims to deepen the use of intelligent machines in manufacturing, supply chains, construction, and health care, while expanding robotics sales from 600 billion yen ($4.9 billion) annually to 2.4 trillion yen by ”2020.

Japan Unleashes a Robot Revolution

BUT LET’S LOOK AT THE FACTS

Unemployment

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But tech does not allways lead to fewer jobs

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The income issue

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The income issue

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3 x critical voices

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”Elon Musk’s nightmare: A Google robot army annihilating mankind”

”Artificial intelligence 'could be the worst thing to happen to humanity': Stephen Hawking warns that rise of robots may be disastrous for mankind”

Some research questions

• Creating customer loyalty and emotions in a M2C-interaction -  Sherry Turkle, MIT, claims that humans can develop strong emotional ties with

technology

• Do we trust f2f relations more/less than M2C relations • How may/may not robots contribute to (in)equality in

society? - Will C * (1+ r) > L * (1+w) ref to Thomas Pikerty

• What may be some of the long-term problems with robots and AI?

• A life without work?

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"WE CAN'T SOLVE PROBLEMS BY USING THE SAME KIND OF THINKING WE USED WHEN WE CREATED THEM."

Albert Einstein

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Thank you!