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Who is responsible for delivering the economic and social benefits of AI?
In the next 50 years, automation will take a tremendous leap forward through artificial intelligence. AI offers the capability to drastically improve the way we work and live. As cognitive technology continues to improve, it will open up avenues for personal growth, business innovation and the potential to enhance the consumer experience. The birth pains, however, of societies centered on new economic models that leverage AI cannot be underestimated. In 2016, the divisions between those who felt they were gaining from globalization and those who felt left behind caused a political earthquake few had foreseen. Set against this backdrop,..
Chetan DubeJanuary 17, 2017
In the next 50 years, automation will take a tremendous leap forward through artificial intelligence. AI offers the capability to drastically improve the way we work and live. As cognitive technology continues to improve, it will open up avenues for personal growth, business innovation and the potential to enhance the consumer experience. The birth pains, however, of societies centered on new economic models that leverage AI cannot be underestimated. In 2016, the divisions between those who felt they were gaining from globalization and those who felt left behind caused a political earthquake few had foreseen. Set against this backdrop, the world’s global elite are gathering together at this year’s World Economic Forum (WEF) in Davos to forge a path for inclusiveness in what WEF is terming, the Fourth Industrial Revolution. To ensure a positive result, business and political leaders must put policies in place that prepare workers for this profound shift, educating and training them for the jobs of the future and not fighting the tide. It has never been more important for business executives, lawmakers and regulators work together with communities to provide the kind of responsible leadership that will be the theme of this year’s Davos meeting. Urgent action to address the employment shift needs to be visible if the fears and frustration in segments of society that feel left out are not to be left to fester. In the same week, here in the US, a new president takes office with a promise of being the greatest “job-producing” president in American history. But will those jobs be representative of America’s history or are they the jobs of tomorrow’s digital economy? Current investment by the U.S. in labor market programs that help workers navigate job transitions, such as training and job-search assistance is lower than international and historical standards. A brief published by the U.S. Council of Economic Advisers in December 2016 entitled “Active Labor Market Policies: Theory and Evidence for What Works” noted that while OECD countries spent .5% of GDP on these programs in 2014, the U.S. spent .1%. More telling still is the fact that as a proportion of GDP, the U.S is spending less than half of what it did 30 years ago on such programs. Reversing this cycle of diminished investment and aligning it to the future digital economy should be a priority. The degree to which a positive future materializes depends on the policy choices we make and the business strategies we pursue. With the help of AI and automation, mundane and dangerous work can be handled by machines under human supervision. Re-investing in our people to take on new roles. Re-inventing our businesses to create new opportunities that harness the strengths of human minds while leveraging the raw power of technology. Both these actions are required if we are to realize the promised doubling of economic growth in developed countries within 20 years, predicted by Accenture in its recently published “Fuel for Growth” study. Let’s not leave it only to those meeting in Davos to steer us in the right direction, but be responsible leaders at all levels within society in championing the innovation that will take us to the next step in our evolution. Chetan Dube is the CEO and President of IPsoft.
Fukoku Mutual’s Use of AI Highlights Opportunities Across the Insurance Industry
Japanese insurer Fukoku Mutual Life Insurance’s decision to replace 34 of its claim assessment employees with a cognitive system has made headlines around the world in..
Ed Thomas, Manager, Market Intelligence, IPsoftJanuary 20, 2017
Japanese insurer Fukoku Mutual Life Insurance’s decision to replace 34 of its claim assessment employees with a cognitive system has made headlines around the world in recent weeks. In much of the media coverage, the move has been portrayed as the first major example of intelligent machines “stealing” white-collar jobs, a grim harbinger of a science fiction-inspired future in which technology has replaced people in the workplace. Away from the headlines, the reality is more prosaic. On Twitter Andrew Ng, vice president and chief scientist at Chinese web services company Baidu, said: “The only unusual thing here is Fukoku Insurance is talking about it rather than doing it quietly.” Indeed, a number of other Japanese insurers are reportedly already using artificial intelligence (AI) systems, although these projects only became public after the announcement from Fukoku Mutual. The strategies pursued by the likes of Fukoku Mutual, Dai-ichi Life Insurance and Nippon Life Insurance are most likely already being assessed, if not replicated, by insurers across the globe, given the significant opportunities for automation in the industry. In a July 2016 article in McKinsey Quarterly ("Where machines could replace humans – and where they can’t (yet)"), it was estimated that “about 50 percent of the overall time of the workforce in finance and insurance is devoted to collecting and processing data, where the technical potential for automation is high.” The benefits to insurers of embracing new technology can be significant, and are not limited to simple cost reduction. For example, another recent McKinsey report ("Making digital strategy a reality in insurance," September 2016) found that property and casualty (P&C) insurers in the top quartile for digital performance were “achieving twice the growth rate of their less digitally advanced peers and delivering better profitability at the same time.” The initial focus for many insurers will likely be automating data-heavy internal processes; indeed, this is the approach taken by Fukoku Mutual, which is using a cognitive system to scan medical records in order to determine pay-outs. However, this should not obscure the opportunities in the front office. IPsoft’s Amelia, a “digital employee” capable of solving problems like a human, is an example of a technology platform adept at supporting both customer interactions and back office processes. The implementation of cognitive technology at Fukoku Mutual may have led to 34 people losing their jobs but that does not mean that redundancies are inevitable in such situations. Japanese newspaper "The Mainichi" reported that Dai-ichi Life Insurance is using a similar system to Fukoku Mutual for processing payment assessments, but “it appears there have been no major staff cuts or reshuffling at the firm due to the AI's introduction.” As the OECD highlighted in a 2016 report ("The Risk of Automation for Jobs in OECD Countries"), automation tends to target specific tasks rather than whole occupations and therefore is unlikely to result in the elimination of entire job types. Rather than looking to usurp humans in the work environment, technologies like Amelia and IPcenter, IPsoft’s autonomic IT management platform, instead seek to work alongside them, augmenting their abilities and consequently delivering significant improvements in productivity. For over a year now, “Virtual Engineers” have been working and learning alongside staff at US insurance giant AIG, with the aim of understanding client IT environments and addressing exceptions more rapidly and intelligently over time. By the end of November last year, these Virtual Engineers had resolved more than 145,000 critical events and saved upwards of 15,000 hours of human labor. The focus on automation at AIG is growing as it looks to move away from traditional outsourcing and embrace AI as part of a broader digital transformation strategy. Such has been the success of the initiative to date that the company is considering expanding its use of AI into other areas such as underwriting. Discussions of automation and AI in the workplace often fall back on the narrative of "man versus machine." This may make for better headlines but, as companies like AIG are discovering, the future of work is far more likely to be "man plus machine."
The Present & Future of Digital Labor
The competitive landscape is changing. Within five years the make-up of the workforce will be entirely different to the one we see today as digital labor and..
November 29, 2016
The competitive landscape is changing. Within five years the make-up of the workforce will be entirely different to the one we see today as digital labor and AI-enhanced roles become the norm. The productivity benchmarks that set market leaders apart will be set at new levels. In a demand led consumer society, the bar for customer service will be higher than we have ever seen it before. These were the themes highlighted in the opening keynote at this year’s Gartner Symposium in Barcelona where CIOs were encouraged to drive digital to the core of their organizations and embrace AI. On the opening day of the Symposium, IPsoft collected together senior executives from the industry to discuss and debate the future impact of digital labor. Watch highlights of the seminar to learn more about the topics raised and hear from the pioneers leading this change.
IPsoft Chief Cognitive Officer, Edwin Van Bommel, presents IPsoft’s vision of how automation and cognitive technologies are changing business as we know it.
Speakers from SEB, one of Sweden’s largest banks, Enfield Council, one of London’s largest boroughs, and UBS discuss their implementation of Amelia. They share insights and advice driving value from digital labor. Read a summary of the Pioneers Panel.
Amelia is trained to support employees across many industries, including insurance. IPsoft Vice President Ergun Ekici demonstrates how Amelia can help an agent facilitate a car insurance claim for a customer, illustrating how her brain works.
Preparing IT Operations for a Digital Business Future
The emergence of a digital economy is one of the most significant business disruptions of the past century. Enterprises are turning their focus from developing..
January 4, 2017
The emergence of a digital economy is one of the most significant business disruptions of the past century. Enterprises are turning their focus from developing physical assets and supporting permanent locations to developing digital products and supporting cyber locations that combine with, or completely replace, their physical predecessors. Register to download a copy of this white paper. Download a copy of the Cognitive Digital Labor white paper.
CNBC: How to profit from chatbots, big data and virtual reality
"More of our online interaction with customer services is probably not going be with a human, but more likely with an artificial intelligence-powered chatbot." Read..