Numerous social media posts, news articles and reports, are showcasing Artificial Intelligence (AI) capabilities. AI chat conversations, quick summaries, even synthetic speaking voices, images and video.
This of course generated a lot of discussions online about how AI would replace humans in many job functions such as call contact centers and the like. Screenwriters in Hollywood are currently on strike, and one of their demands is to limit the amount of AI used in motion pictures.[1] Recently IBM, one of the largest tech companies in the world, announced that it would likely layoff around 7,800 mostly backoffice jobs due to AI.[2]
Backoffice work involves non-customer facing work such as accounting, legal, finance, human resources, and others. A lot of backoffice work is off-shored to other countries like the Philippines and India and employs many skilled white collar workers in those countries. Most likely initially the target will be the junior level workers who do paralegal, bookkeeping, resume filtering, and other basic backoffice tasks that can already be automated and decided on using AI.
While these news reports may indicate that a lot of jobs might be displaced by AI, it won’t displace everyone. Human judgement is still needed, for example for approving whether a financial plan or a legal strategy will be made.
Currently the US office market is in dire straits in certain major cities like Los Angeles, San Francisco, New York, because of work from home trends. There are a lot of office vacancies. In fact, many experts are forecasting a commercial real estate crisis led mainly by a lot of these vacant offices.
What may happen if major Fortune 500 companies will cut back on back office work offshore due to AI is that they may actually need offices here for the remaining upper management who will need to approve this work being recommended by machines. While it may not fully occupy all the empty office space, it may lead to a slight rise in demand.
For example, while the thousands of remote office workers doing the basic bookkeeping and paralegal work overseas might get displaced, the executives who are working with their staff to decide whether to approve a proposal, a project, a major expense, or not may need to meet not just remotely (from home) but also meet face to face occasionally for the key decisions.
While the AI might spew out recommendations on whether that new petroleum refinery expansion makes sense financially, or the reply letter to the SEC is drafted properly, a management team will still need to give their inputs on these suggestions and they still need to agree with it. Someone still needs to be accountable for key decisions, else we are already admitting that the human decision process is no longer needed in business.
Otherwise all our corporations will be run by robots. Maybe eventually led by robots. Maybe eventually there will be no more need for large corporations. We’ll all just sit at home watching TV created by AI, and barely survive until these machines decide to get rid of us. We cannot really let go of the concept that these AI tools are really productivity enhancers, not really tools to replace us. The latter thought can be self fulfilling if we let it.
While the era of mega large employers who have several hundred thousand employees may come to an end because of AI, the human team decision factor might not immediately disappear because at some point, someone will need to be accountable for key decisions.
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