Gartner fails spectacularly with its 180 degree flip on the impact of AI Automation on jobs

Whiplash alert: You may have noticed how Gartner recently flipped its core messaging from automation/AI being a seismic job destroyer to being now a job-creator.  And both times, they just can’t seem to back up the rhetoric with actual facts.  Plus, they don’t even seem to be able to define consistently what they actually mean by “AI Automation”. 

Remember when Gartner claimed that automation and AI were not only going to replace a third of jobs by 2025, but many of us would be reporting to a robo-boss at some stage this year?  Well, guess what folks, they’ve now performed a complete 180-degree flip, claiming that millions of new jobs will be created after 2020, far outweighing their previously predicted gargantuan job losses (courtesy of LinkedIn).  Wow:

 

Let’s dare to look back in time to hold Gartner to account

Peter Sondergaard, Gartner’s Head of Research, predicted one in three jobs will be converted to software, robots and smart machines by 2025.  Yes he actually said that at his own Symposium, and even added, “New digital businesses require less labor; machines will make sense of data faster than humans can.”  However, unlike the good old days when analysts could get away with all flavors of outlandish grandstanding soundbites to spice up a conference, these predictions tend to hang around the internet these days.  While many people love to keep spinning new headlines everyday, in the hope #fakenews is now the #realnews, some of us still have memory banks that last longer than one week, especially when CIOs spend billions of dollars for this type of council.

And then who can forget this almighty whopper from Fran Karamouzis, a vice president and distinguished analyst at Gartner:

By 2018, more than three million workers globally will be supervised by “robo-bosses”.  Excellent, so Fran’s surely keeping her fingers crossed that the robo-boss takeover is even more imminent than Donald Trump’s interview with Robert Mueller…

Gartner’s new claim why AI and Automation will create this massive net gain in jobs

When Gartner put out this far more positive news, I was so excited, and couldn’t wait to hear their new rationale:

 

Click to read full press release

“Many significant innovations in the past have been associated with a transition period of temporary job loss, followed by recovery, then business transformation and AI will likely follow this route,” said Svetlana Sicular, research vice president at Gartner. AI will improve the productivity of many jobs, eliminating millions of middle- and low-level positions, but also creating millions more new positions of highly skilled, management and even the entry-level and low-skilled variety.

Great!  So there it is.  Svetlana goes on:

“Unfortunately, most calamitous warnings of job losses confuse AI with automation — that overshadows the greatest AI benefit — AI augmentation — a combination of human and artificial intelligence, where both complement each other.”

Right, so all the stuff you colleagues were declaring is now calamitous and confusing?  Oh, they are talking about “automation” and you are talking about “AI”.  So why, Svetlana, do you call your new data forecast “The Impact of AI Automation on Jobs”.  Surely you mean “AI Augmentation“.  I’m sorry, but I am even more confused that I was before…

When we get into the reasons why automation and AI suddenly have become job creators, I give Gartner some credit for actually trying to give this claim some credence, but then they fail to provide a single real example of how this “new work” is being created:

Craig Roth: research vice president at Gartner: “Companies are just beginning to seize the opportunity to improve nonroutine work through AI by applying it to general-purpose tools. Once knowledge workers incorporate AI into their work processes as a virtual secretary or intern, robo-employees will become a competitive necessity.”

OK – so how will new jobs get created?  Sounds like AI is helping knowledge staff cut back on interns here!  Gartner continues…

Leveraging technologies such as AI and robotics, retailers will use intelligent process automation to identify, optimize and automate labor-intensive and repetitive activities that are currently performed by humans, reducing labor costs through efficiency from headquarters to distribution centers and stores. Many retailers are already expanding technology use to improve the in-store check-out process.

Great – so retailers are able to use intelligent process automation (whatever that is, I thought we were talking about AI augmentation) to fire humans.  They just laid that our pretty plain and simple.  No jobs created there then…

“Retailers will be able to make labor savings by eliminating highly repetitive and transactional jobs, but will need to reinvest some of those savings into training associates who can enhance the customer experience,” said Robert Hetu, research director at Gartner.

So some of the savings from sacking transaction staff will be reinvested in more customer aligned people.  But that tells me less people will be reemployed, not more.  Where is the net gain here?

And Robert goes even further: “While many industries will receive growing business value from AI, manufacturing is one that will receive a massive share of the business value opportunity. Automation will lead to cost savings, while the removal of friction in value chains will increase revenue further, for example, in the optimization of supply chains and go-to-market activities.”

So automation will save them money and make them richer because they will function better.  But why will this cause them to hire more people?  Where is this assumption coming from that those companies who make higher profits through automation will reinvest in people?  Again, there is zero evidence here of a net gain in hiring… c’mon!

And to cap off this wonderful analysis, here’s the pièce de résistance:

“AI can take on repetitive and mundane tasks, freeing up humans for other activities, but the symbiosis of humans with AI will be more nuanced and will require reinvestment and reinvention instead of simply automating existing practices,” said Mike Rollings, (another research vice president at Gartner).

Great, so Mike finally mentions that money will be spent on the reinvention of new processes, as we see these wonderful new nuances of humans and machines come together.  Cool… tell me more:

“Rather than have a machine replicating the steps that a human performs to reach a particular judgment, the entire decision process can be refactored to use the relative strengths and weaknesses of both machine and human to maximize value generation and redistribute decision making to increase agility.”

Awesome, Mike.  So we’re talking about optimizing the best qualities of both human and machine.  I love it, and completely agree with Mike.  So maybe we can have an example of this in reality… and maybe even a decent explanation of what really inspired Svetlana to forecast these millions of new jobs that are going to be created?  Just one example?  Please… pretty please?

The reality: half of firms’ staff will be impacted by automation and 40% of them have no idea what to do with them

So here’s the biggest issue facing enterprise operations in the next couple of years:  what to do with staff impacted by automation.  Our brand new 2018 State of Operations study, conducted with KPMG, over half the Global 2000 firms surveyed believe transactional roles will be significantly impacted by automation within just a two-year timeframe:

 

So we thought we’d poll the 120 enterprise buyers at the HfS New York FORA summit last month, and we asked them what they intended to do with their impacted staff:

 

While a good portion are already thinking about “retraining” their impacted staff to take on analytics work (21%) and help manage new tech such as RPA and ML (16%), the vast majority (40%) are just honest and reveal they just don’t know.

Bottom-line: Please let’s stop trying to confuse everyone. As analysts, we have a responsibility to speak from real facts and real evidence

The technology industry has thrived on the hype for decades, but in the past, it was usually based on established technologies and their real impact on business, proven through many client experiences and tested through time to help us all understand the ultimate impact on business models.  Suddenly, many leading experts are making judgments based on possibilities, not realities.  The tech suppliers love the hype because it convinces clients to invest, but the more confusing this all becomes, the more dangerous this hype becomes in turning off smart C-Suite executives who need to see real results before making real investments.

Careers are on the line with automation and AI, and the more embedded these technologies become in organizations, the more clients need real data and real evidence to create their roadmap for them.  Outlandish claims like this are getting shot down faster than ever, and we need, as an industry, to stop pandering to the marketeers and panic-mongers and start having a realistic conversation.

 

(Cross-posted @ Horses for Sources)


LinkedIn Twitter
Founder and Chief Executive Officer of HfS Research, the leading global research analyst organization covering global sourcing strategies. Acclaimed Industry Analyst and Consultant who scribes the leading blog for the services industry "Horses for Sources".  Previously worked  at AMR Research (Gartner Inc),  Deloitte Consulting’s BPO Advisory Services, the  Everest Group and  IDC .  In 2010, Phil was named “IIAR Analyst of the Year” by the Institute of Industry Analyst Relations (IIAR). This is the most coveted global award for industry analysts in technology and services.