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Gartner's dark vision for tech, jobs

Gartner's dark vision for tech, jobs

In a world where smart machines do most of the work, expect high unemployment, unrest and tumult

Science fiction writers have long told of great upheaval as machines replace people. Now, so is research firm Gartner. The difference is that Gartner, which provides technology advice to many of the world's largest companies, is putting in dates and recommending immediate courses of action.

The job impacts from innovation are arriving rapidly, according to Gartner. Unemployment, now at about 8%, will get worse. Occupy Wall Street-type protests will arrive as early as next year as machines increasingly replace middle-class workers in high cost, specialized jobs. In businesses, CIOs in particular, will face quandaries as they confront the social impact of their actions.

Machines have been replacing people since the agricultural revolution, so what's new here?

In previous technological leaps, workers could train for a better job and achieve an improvement in their standard of living. But the "Digital Industrial Revolution," as the analyst firm terms it, is attacking jobs at all levels, not just the lower rung. Smart machines, for example, can automate tasks to the point where they become self-learning systems.

Smart machines "are diagnosing cancer, they are prescribing cancer treatments," said Kenneth Brandt, a Gartner analyst. These machines "can even deliver [treatment] to the room of the patient."

Gartner sees all kinds of jobs being affected: Transportation systems, construction work, mining warehousing, health care, to name a few. With IT costs at 4% of sales for all industries, there's very little left to cut in IT, but there is a great opportunity to cut labor.

The companies on the leading edge of this trend include Amazon, which spent $775 million last year to acquire Kiva Systems, a company that makes robots used in warehouses. Google is also on the forefront, with its effort to develop driverless cars. Gartner applies a broader template, and says that the jobs most susceptible to machine replacement involve a range of back-office functions, including transactions, specialization, objectivity, high control, high scale, compliance and science.

This shift will affect employment, said Brandt, at Gartner's Symposium ITxpo. "We believe there will be persistent and higher unemployment."

Brandt's research, labeled under a topic that Gartner calls "maverick," is designed to expose dramatic and controversial positions. On an extreme end of the scale, he put the impact of smart machines at 90% unemployment, which is either catastrophic or leads to a utopia, where basic needs are met and people are free from drudge work.

The broader intent of the research is to get CIOs to consider the impact of smart machines on their organizations, along with the rise of new positions, such as chief digital officer. Gartner recommends that businesses move quickly to form teams to focus on the issue of smart machines.

What isn't a maverick position, however, is Gartner's warning that by 2020 the impact of labor reduction "will cause social unrest" and a quest for new economic models in several mature economies.

From 2020 to 2030, "you are going to see the first human-free enterprise -- nobody is involved in it, it's all software, communicating and negotiating with one another," said Diane Morello, a Gartner analyst, who has looked at how smart machines will reshape employment.

Morello said companies increasingly will recognize that smart machines are part of the workforce. "Human beings are not the only workforce," she said.

If technology cuts the workforce leading to a reduced consumer spending, who then buys the goods from increasingly automated companies? There wasn't a clear answer to that problem, said Morello. "Somebody is going to have to pay for the services," she said.

Smart machines may also help people adapt and learn new skills, but the challenges will require broad public policy engagement, according to Gartner analysts.

"It's definitely easy to see a dystopian future," said Nick Hansen, senior analyst for Discipline Growth Investors, but he is more optimistic. "The thing I keep coming back to is, there is always something humans want from other humans."

While the first phase of the revolution may benefit the robber barons, or in this case the Silicon Valley titans, Hansen said, "eventually there is a huge economic potential that actually dwarfs the initial potential" as people figure out how "to tap into all these unused resources" or people idled by changes.

Eugene Pate, an IT manager at a consumer packaged goods company, said he can see the impact of automation coming , but he questioned the extent of it.

"We're a society of humans, and we would like to stay that way," Pate said.

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