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Wage Against The Machine: Why We're Destined To Fight AI For Our Jobs

14/02/2017 13:56

When it comes to AI and jobs, there's two theories on how things will end up. Optimists will tell you that man and machine can coexist, be better together and live harmoniously. Others say new tech will leave millions unemployed.

The problem with the former view is that there are already signs that contradict it. One is called the gig economy, and it's not pretty. Let me explain why the gig economy puts man in a precarious position.

Business school graduates may already be familiar with the work of Harvard professor Michael Porter - one of the leading minds in competitive advantage and business strategy. As part of his research, Porter identified that the best competitive position for a platform to be in is to have both a multitude of suppliers and a multitude of customers.

Imagine you're a business without this luxury; you have just a handful of suppliers, or a handful customers. Under these circumstances you're forever in a weak negotiating position. All it would take is for you to lose one or two key suppliers or customers, and your business could be finished. Furthermore, any supplier or customer worth their salt will recognise this power dynamic and be continually squeezing your profits.

This is the reason why companies such as Netflix and Amazon have invested hard in original content, and why it took so long for music streaming services to take off. The media landscape is dominated by a handful of very strong suppliers - major record labels and major cable companies - who had, and still have, strong negotiating power over companies such as Spotify.

On the other hand, take Uber. Uber has millions of suppliers (taxi drivers) and millions of customers. Strategically it's in a phenomenal position. Neither the suppliers nor the customers have great power over them. Uber can afford to lose many of each without much of an impact on their business, and that's why it has a stratospheric valuation

The idea that man and machine can work together fails to consider this power dynamic between platform and labour.

While you could argue that there is a substitution effect - if Uber were to squeeze its drivers too much they would all quit - you would be ignoring the centralising tendency of technology.

It's very likely that we'll end up with a few dominant platforms for these gig economy jobs, and therefore they will have a great leverage over the suppliers of labour. It's akin to having one or two major employers in a small town. In this scenario you daren't quit your job or get fired, because you'll have no other option than to move somewhere else or accept being unemployed.

Advancements in driverless car technology, and Uber's recent acquisition of AI firm Geometric Intelligence, suggest that space for human workers in the gig economy will soon be dwindling. Already in a weak position, these employees will find themselves unable to push back against the AI invasion and doomed to accept their fate of obsolescence.

This eventuality is supported by Erik Brynjolfsson - professor of management at MIT's Sloan School and author of influential book The Second Machine Age. According to Brynjolfsson the profits of technology will go to an increasingly select few "superstars" and the economy will ultimately be dominated by members of a small technological elite.

One prime minister reportedly said recently: "There are three or four powers left in the world - one in the US, one is China and one is Alphabet."

Dan is a co-founder at Peakon, the leading provider of employee engagement analytics.

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