Robots will not lead to fewer jobs – but the hollowing out of the middle class

Moravec’s paradox says that robots find difficult things easy and easy things difficult, which might lead to humans taking lower-paid manual work. Photograph: Fabian Bimmer/Reuters

Throughout modern history there has been a recurrent fear that jobs will be destroyed by technology. Everybody knows the story of the Luddites, bands of workers who smashed up machinery in the textile industry in the second decade of the 19th century.

The Luddites were wrong. There has been wave after wave of technological advance since the first Industrial Revolution, and yet more people are working than ever before. Jobs have certainly been destroyed. Banks, for example, no longer employ clerks to log every transaction in ledgers with quill pens. At this time of year, 150 years ago, the fields would have been full of people with scythes and pitchforks bringing in the harvest. That work is now done by motorised harvesters.

The reason new technology has not been the cause of mass unemployment is that new kit will only be used when it makes the productive process more profitable. Higher productivity frees up the resources to buy other goods and services. The rural workers that Thomas Hardy described in Tess of the D’Urbervilles found work in factories and offices. What’s more, it was better paid work, and so the upshot was an increase in living standards.

Similarly, the age of robots will lead to more jobs. Kallum Pickering, analyst with Berenberg, says there is a big hole in the argument that artificial intelligence (AI) will lead to vast numbers of workers joining the dole queue.

“Producers will only automate if doing so is profitable. For profit to occur, producers need a market to sell to in the first place. Keeping this in mind helps to highlight the critical flaw of the argument: if robots replaced all workers, thereby creating mass unemployment, to whom would the producers sell? Because demand is infinite whereas supply is scarce, the displaced workers always have the opportunity to find fresh employment to produce something that satisfies demand elsewhere.”

That, though, is not the end of the story. Robots will create more jobs, but what if these jobs are less good and less well paid than the jobs that automation kills off? Perhaps the weak wage growth of recent years is telling us something, namely that technology is hollowing out the middle class and creating a bifurcated economy in which a small number of very rich people employ armies of poor people to cater for their every whim.

This is certainly a much more likely threat than mass job destruction. What’s more, it fits with the history of the recent past, the theory of automation, and recent trends in the labour market.

Christian Siegel from the University of Kent’s school of economics has found that labour markets in the advanced countries of the west started to polarise as far back as the 1950s as they became more dominated by the service sector. Growth was strong during this period, but the job creation tended to be either at the top end of the pay scale or at the bottom end, while employment opportunities in traditional middle-class sectors of the economy declined. The arrival of IT in the 1980s merely accentuated a process already underway.

Robots are likely to result in a further hollowing out of middle-class jobs, and the reason is something known as Moravec’s paradox. This was a discovery by AI experts in the 1980s that robots find the difficult things easy and the easy things difficult. Hans Moravec, one of the researchers, said: “It is comparatively easy to make computers exhibit adult-level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility.” Put another way, if you wanted to beat Magnus Carlsen, the world chess champion, you would choose a computer. If you wanted to clean the chess pieces after the game, you would choose a human being.

Dhaval Joshi, economist at BCA research, believes Moravec’s paradox will have a big impact on the labour market. He considers two scenarios for a stylised economy with three jobs: a high-income innovator, a middle-income manufacturer and a low-income animal tender.

In scenario one, the innovator comes up with a machine that dispenses with the need for the animal tender. The machine is more productive than the animal tender and so the innovator uses his extra income to buy manufactured goods. That provides the opportunity for the animal tender to retrain as a more highly paid manufacturer.

In scenario two, the innovator invents a machine that makes the middle-income manufacturer obsolete. Again, the innovator has more disposable income and uses it to purchase animal tending services. The middle-income manufacturer now has to make a living as a more lowly paid animal tender.

In the modern economy, the jobs that are prized tend to be the ones that involve skills such as logic. Those that are less well-rewarded tend to involve mobility and perception. Robots find logic easy but mobility and perception difficult.

“It follows,” says Joshi, “that the jobs that AI can easily replicate and replace are those that require recently evolved skills like logic and algebra. They tend to be middle-income jobs. Conversely, the jobs that AI cannot easily replicate are those that rely on the deeply evolved skills like mobility and perception. They tend to be lower-income jobs. Hence, the current wave of technological progress is following scenario 2. AI is hollowing out middle-income jobs and creating lots of lower-income jobs.”

Recent developments in the labour market suggest this process is already well under way. In both Britain and the US, economists have been trying to explain why it has been possible for jobs to be created without wage inflation picking up. Britain has an unemployment rate of 4.4% but average earnings are rising by just 2.1%. Something similar has happened in the US. The relationship between unemployment and pay – the Phillips curve – appears to have broken down.

But things become a bit easier to understand if the former analysts and machine operators are now being employed as dog walkers and waiting staff. Employment in total might be going up, but with higher-paid jobs being replaced by lower-paid jobs. Is there any hard evidence for this?

Well, Joshi says it is worth looking at the employment data for the US, which tends to be more granular than in Europe. For many years in America, the fastest-growing employment subsector has been food services and drinking places: bar tenders and waiters, in other words.

AI is still in its infancy, so the assumption has to be that this process has a lot further to run. Wage inflation is going to remain weak by historic standards, leading to debt-fuelled consumption with all its attendant risks. Interest rates will remain low. Inequality, without a sustained attempt at the redistribution of income, wealth and opportunity, will increase. And so will social tension and political discontent.

Source: The Guardian-Robots will not lead to fewer jobs – but the hollowing out of the middle class


Do You Know Your Business Like the Back of Your Hand?

If you asked both an executive and an associate what their company does you might receive surprisingly different answers. Executives, understandably, often have limited knowledge of the every-day business processes, (for example it is not a CEO’s job to know how many reports are run per day), but this gap in knowledge could be costing your business.

The Key Assessment Questions

In order to boost your understanding of company operations, the following questions must be considered:

  • What processes exist?
  • How are they executed?
  • What problems exist? (I.e. where are mistakes made?)
  • What causes the greatest client satisfaction/dissatisfaction?
  • What causes the greatest employee satisfaction/dissatisfaction?
  • Which activities require the greatest amount of financial investment?
  • Where is that investment beneficial and/or wasted?

These questions are the cornerstones to process improvement. Without adequate insight on the current process state, one cannot identify what needs changing and how to implement these changes. Creating a fluid and robust global process is the first step in approaching the Future of Work. Only once the workflow has been transformed and optimized should automation be applied.

The Value of Process Maps

The creation of “As-Is” process maps is incredibly valuable in a business assessment. The maps should be captured with the assistance of employees who perform the tasks day-in, day-out. This will highlight how the work is actually being done, as opposed to how executives think it is being done. No one designs bad processes, but individual and unstructured practises develop easily due to changing client demands, updated system architecture and associates finding ways to reduce the time-consuming and tedious parts of their work. The identified workarounds can then be pin-pointed and addressed in process improvement initiatives.

Process Mapping Must Be Designed to a key-stroke and click level

When the automation is being considered, process maps must be designed to key-stroke and click level. Robotic Process Automation (RPA) requires very granular instructions and it is important to demonstrate that the work is entirely rules-based and structured. Having detailed process maps will greatly assist an RPA developer and will lead to quicker configuration and implementation.

The Legacy of BPO

Over the last three decades Business Process Outsourcing (BPO) established itself as the solution for managing business costs. Repetitive and transactional tasks were sent abroad to locations where resources were plentiful and work could be done for a fraction of the in-house cost. This was the best solution at the time, but it has often led to disconnected global processes. Companies have had to sacrifice some control over the process and human workers have become the integration point for technology. This means that employees are being held prisoner by systems that cannot perform effectively and the business is driven by systems instead of by processes and people.

As technology has progressed, BPO solutions have stagnated. Eventually we will run out of cheaper offshore options, yet many businesses have not advanced much beyond this model and many industries are lagging behind in leveraging new innovations. As a result, companies are not making the most of their human workforce. With the ability to think critically, people are our great problem solvers. Their skill set could be offering businesses far greater benefits if they were placed in less manual and tedious roles.

One company that was prepared to innovate its operations was the communications company BT. Fifteen years ago they undertook a £15 million automation initiative with the aim of examining all existing systems and linking them together into one seamless workflow. Providing the integration between systems is truly what RPA was built for and in harnessing this new technology, BT has continued its development as one of the leading global communications companies and secured a strong foundation of processes for further Future of Work technologies.


Insight is invaluable to businesses and can inspire process improvement and transformation. It is important to assess exactly what occurs in a process rather than what is expected to occur, because standard operating procedures are easily adaptable by employees.

Additionally, modern automation technology is now competitive in both price and functionality. By transforming processes for digital automation, people are freed to focus on the value-added tasks that are more stimulating and rewarding. In turn, companies will see higher levels of job satisfaction and employee retention.

Source: symphony-Do You Know Your Business Like the Back of Your Hand?

Why automation doubles IT outsourcing cost savings

New research analyzes automation’s impact on the IT outsourcing market, revealing double-digit productivity improvements and specific cost reductions between 14 percent and 28 percent.

Outsourcing consultancy and research firm Information Services Group (ISG) this week unveiled a new research report to quantify the cost savings and productivity gains from automating IT services.

The inaugural Automation Index shows improvements in productivity fueled by automation can more than double the cost savings typically derived from outsourcing IT. Total cost reduction ranged from 26 percent to 66 percent, depending on the service tower, with 14 to 28 percentage points of these savings directly attributable to automation, according to ISG. (The typical cost savings from labor arbitrage and process improvements alone range from 20 percent to 30 percent).

The report is based on cost and labor data from ISG’s database covering outsourcing agreements with an annual contract value of $10 million or more in which service automation is a core component. The index is one of the first to quantify the impact of automation on IT services. Automation-related technologies and platforms improve the productivity of employees by enabling them to do more with less and prevent problems before they arise, translating into lower costs for buyers by not only reducing the number of provider employees needed to perform the work but also by reducing the amount of work that needs to be performed.

The result, says Steve Hall, partner with ISG Digital Services, is a buyer’s market that’s putting tremendous pressure on services providers to deliver more and more savings to stay competitive. “As automation moves up the IT process value chain and into business processes, it will eliminate a significant amount of work through problem avoidance and self-healing, and with it, a significant amount of the headcount needed to deliver large-scale ITO services,” Hall said in a statement accompanying the report.

Where automation has the biggest impact

Automation is having the biggest impact on areas in which employees manage physical devices, such as network services. Most IT towers see an average 25 percent decrease in the number of resources required as a result of automation, but certain IT services experience a 50 percent headcount reduction, according to ISG. ISG found that network and voice costs are declining by 66 percent mostly due to the convergence of voice, video and data solutions built on highly standardized and virtualized capabilities, an environment ripe for leveraging automation. Service desk and end user support costs declined by 26 percent due to increased adoption of self help and remote support, the introduction of self-healing functionality, and significant automation of level one and two incidents.

Higher-order automation

Most of today’s automation is focused on computerizing repetitive tasks based on standard operating procedures but more complex automation is beginning to emerge that takes advantage of more advanced data mining and machine learning capabilities, says Stanton Jones, ISG director of research. That higher-order automation can make operational decisions with no human involvement.

In order to seize the benefits of increased automation and plummeting IT services costs, however, buyers will have to transform to more standardized technology stacks across the IT organization. “The more clients standardize things like operating system instances, application interfaces, ITIL processes, and network infrastructure, the easier it is to automate operations,” says Jones. “Standardization means less interfaces, less complexity and fewer decisions that need to be made, therefore, it becomes easier to automate.”

Buyers should also approach process automation tools with standardization in mind. “Service providers are driving increased productivity into their services by using data mining and machine learning to aggregate and correlate data and then improve the quality and timeliness of decision making for routine and repetitive tasks,” Jones says. “Clients can enable and execute these transformations by accepting standard processes and technologies providers bring to the table.”

Source: companies need to know when considering automation

How To Make BPMS And RPA Work Together

Robotic Process Automation (RPA) has been gaining traction in recent years. It has moved from being a mere buzzword to being a priority on organization’s to-do list.

Being a Business Process Management (BPM) practitioner, I am interested in exploring how a BPM software (BPMS) can work with an RPA tool. If you look at the leading BPMS vendors from different magic quadrants, you will see a trend developing. Pegasystems a BPMS vendor acquired an RPA tool last year. Appian, another BPMS/low-code vendor had RPA front and center at their annual conference.

In my opinion, RPA compliments BPMS very nicely, it can actually increase adoption of BPMS, and vice versa. In rest of this article, I am going to explore two different approaches that can be used to make a BPMS and an RPA tool work together in harmony.

Process-Driven RPA

A process cannot exist in a silo, it has to integrate with other systems in order to deliver real benefits. Unfortunately, in most organizations, a fully integrated process is only part of the vision and not reality.

Unfortunately, in most organizations, a fully integrated process is only part of the vision and not reality.

Various factors such as mergers, acquisitions, legacy software or resource constraints can stop you from building those much-needed integrations. Lack of integrations definitely has a negative impact on adoption and usability of the automated process.


Consider a basic version of the order management process. You have automated the process using a BPMS, but it lacks integration with let’s say the shipping vendor’s system.

In order to complete the Ship Order activity shown in the process above, you will need to work on multiple systems. Here is a quick list of different tasks that you might need to perform.

  • Login to order management system
  • Search and open order details
  • Login to the shipping vendor’s system
  • Copy and paste all the required data from order management system to shipping system
  • Ship the order and copy tracking number from shipping system back into order management system
  • Log out and close the shipping system
  • Mark order as shipped in order management system
  • Log out and close the order management system

If you get one or two orders a day, these tasks might not be a big deal, but if this is happening 100 times a day, then you are spending a considerable amount of time on non-value add work.


If you have similar situations in your organization, where processes have been automated using a BPMS but due to lack of integrations have resulted in swivel chair activities, then RPA tools can help you.

A swivel chair activity means that a user has to perform tasks in multiple systems in order to complete a single activity of a process. In the order management process example, Ship Order was a swivel chair activity.

The idea behind Process-Diven RPA approach is that your process keeps running inside a BPMS without any major modifications. You automate non-value add swivel chair activities by using the digital workforce (bots) provided by the RPA tool. Referring to the earlier example of order management process, once your process reaches the Ship Order activity, instead of a human doing all the tasks, a trained bot can perform all the tasks.

This approach can help you (in a way) integrate with systems that might not have been possible otherwise and more importantly free up your human resources, who can work on value-add work instead.

RPA-Initiated Process

A bot is great when you have well-defined repeatable tasks that it can perform, but what happens when there are data anomalies or errors? It is simply not feasible to train a bot with all possible exception cases (unless it is a self-learning bot, topic for another day).


To further elaborate this approach, let’s take a look at trade reconciliation process. This process usually happens at end of a trading day, and the goal is to make sure that balance is accurate in two or more systems.

The figure above shows two hypothetical systems used for trading. Here is a quick list of different tasks that an agent might need to perform for reconciliation.

  • Login to trade management system of the firm
  • Search and open the customer in trade management system
  • Login to broker system
  • Search and open the customer in broker system
  • Verify that end of day balance in both systems is same
  • Log out and close the trade management system
  • Log out and close broker system

Now consider the exception case where at end of the day, the balance was not same in both systems. In this exception case, an agent will need to perform follow-up tasks, which might require a call or email to the client and broker to find out the reason balance is not same.


In such scenarios, a bot can be trained to perform the daily repeatable tasks of checking balance in both systems, but training it on all exception scenarios, follow-ups, and follow-up actions might not be possible, and this is where BPMS comes to the rescue.

As the name suggests, the idea behind RPA-Initiated Process approach is that when a bot has not been trained to handle exception cases, it requests human intervention. The bot completes its processing, kicks off a human activity inside BPMS and moves on to the next set of work. This approach works great when a majority of the time a bot is able to complete processing without issues, but in those minor instances when they do find anomalies, a process is kicked off in BPMS so that a human can follow-up and resolve the issue.

This approach works great when a majority of the time a bot is able to complete processing without issues, but in those minor instances when they do find anomalies, a process is kicked off in BPMS so that a human can follow-up and resolve the issue. This again lets your resources focus on actual value-add work instead of spending time on mundane tasks.


In my opinion, BPMS and RPA are a great match. The two approaches discussed in this article show that if both technologies are used in harmony they can really complement each other and increase adoption.

Share your thoughts on how you are planning to use BPMS and RPA in your organization. What opportunities or challenges do you see in implementing both together?

Source: To Make BPMS and RPA Work Together 

The Rise of the Robots.

The Rise of the Robots

As we have seen in the news this week robotics and AI are quickly becoming a real thing in both business and the home. In the next few years we will see more and more of this type of technology taking on more and more of the administrative type roles in businesses around the world. In this blog, I share my thoughts on this trend and some of my very own personal experiences…

Rise of the Robots.

I am strong believer that we can predict B2B technology trends by looking at what happened in the B2C world 12 to 24 months earlier. In my experience, business technology trends usually follow those that happen in the home a couple of years later.

If you look at some of this year’s B2C trends, I think that 2016 will be remembered as the kick starter year for AI in the home. £50 devices like the Amazon Echo are transforming our homes into a fully connected internet of things. These new devices allow us to get accurate information easily and automate complex tasks with simple commands.

I recently bought a £50 Amazon Echo, Alexa (Note to my wife: purely for research purposes, honest!) and taught it that when I say “Good Night”. It turns off my TV, sets the home alarm, turns the down stairs’ lights off, sets the thermostat to 19c, turns the bedroom lights on, looks in calendar for the next day and sets my wake up alarm accordingly. In the morning when the alarm goes off, Alexa can tell me the traffic to work, the day’s weather, turns on my kitchen lights and coffee machine!

Power vs. Simplicity.

There is no doubt that these devices are amazing and are impressive when you use them, however they are not clever enough to do all of the above on their own. The key to these devices are their ability to connect to the cloud to get information. But what it does really well is allow third party products to connect and work with it.

For example – and this shows just how clever these devices are; after only a few days my wife and I started to treat Alexa like a real person – if I ask Alexa to play a certain song, it makes a request to Spotify.

Spotify then decodes this request and finds the right song for me. If I say “Good Night” to Alexa and the lights go out – that is your smart bulb manufacturer communicating to Alexa via the API – and this is the Key. Amazon have done an amazing job of harnessing the power of the cloud but also creating a way that other providers can interface their products with it.

Speed of light.

For me this means that robotics and Artificial Intelligence will only be as good as the integration methods that it ships with them.

If HCM technology companies want to keep pace, we all need to make sure we are easy to integrate with to be able to get the support for the services we think are the future. Going back to Alexa, the makers of smart devices’ are falling over themselves to support it as they see it being a key to getting people bought into their systems. When that Robotic game changer hits businesses, we all need to be ready.

Source: – The Rise of the Robots.