By Steve Malerich
With technological advances, the first half of the twentieth century saw a movement of workers away from agricultural to industrial production. The second half saw a movement from industrial production to services. So far, technological advances have not reduced our need for service workers. But suppose that advances in artificial intelligence greatly magnify the productivity of service workers, as suggested by the following scenario.
“Andrea” calls the doctor’s office with a medical concern. The doctor’s automated telephone system, in a friendly and personal voice, asks her a series of questions. Based on Andrea’s answers and in consultation with her insurer’s claim system, the doctor’s system directs her to a neighborhood lab for tests. At the lab, another automated system performs the prescribed tests, makes a diagnosis, and dispenses the appropriate medication, all while in contact with Andrea’s insurer. As the service is completed, the insurer pays the cost of the service. Andrea signs for any copayment, to be paid automatically from her bank account. Heading home, Andrea was happily spared from long waits and a hurried contact with the doctor.
To anticipate the realization of such a scenario and its timing, we should watch the sectors with the most potential for early application of AI. These would be where services are already provided at a distance (airline reservations were an early example). Once widespread in these sectors, AI will have built the necessary level of trust and acceptance to move into more and more service sectors.
The critical issue now is that such changes could lead to substantial reduction in service jobs at a time when people will want to (or need to) work longer. Services in the first half of the twenty-first century might thus resemble manufacturing in the second half of the twentieth century, with massive layoffs and substantial incentives for early retirement. If we are to minimize the trauma, we need first to see it coming.
About the Author
Steve Malerich is assistant vice president and actuary at Aegon USA in Cedar Rapids, Iowa. He can be reached at smalerich@aegonusa.com .