The battle concerning where to work continues. With the recent Big Tech layoffs, the pendulum continues to swing back and forth concerning what constitutes working from a location perspective. Increasingly, organizations are pushing employees to return to the office while there are many employees who are refusing or, at least, are clinging onto the hope that either hybrid or remote work is here to stay.
In many respects, whether employees return to work or work from home is part of a broader discussion concerning the intersection between technology and human capital. The direction that is taken will have dramatic implications concerning how we manage human capital in the future.
While many would argue that the previous statement is melodramatic, it is increasingly a reality that human civilization is running into. The value of human capital has steadily been declining since the Industrial Revolution in the 18th century. Thanks to advances in automation and artificial intelligence, individual productivity has consistently increased since the Industrial Revolution.
Many would argue that human civilization has shown its adaptability with regards to automation and artificial intelligence. While the transition has been difficult, individuals whose roles have been eliminated have managed to find new roles. At least, that has been the perception since the Industrial Revolution. The reality, though, is mixed.
While many individuals have adapted to the new realities, the reality is that individuals may not have traded for roles that were one for one but may have traded for roles that moved them down the economic ladder. In addition, there were probably many individuals who weren’t successful in transitioning and then ended up an unemployment statistic. All in all, not a successful transition for human civilization.
Today, human civilization is on the cusp of another transition. While some state that it is a continuation of the transition that has occurred since the Industrial Revolution, there are significant differences compared to those past transitions.
One of the biggest differences between previous transitions and the current one is the speed that this transition is occurring. In many respects, the speed of the transition has greatly accelerated versus what happened in the past and that is thanks to the addition of artificial intelligence.
That acceleration is a critical component of the current transition and is creating a general malaise amongst the wider population. Unlike in the past, artificial intelligence is pushing the speed of the transition well beyond the ability of individuals and human driven organizations to adapt.
One could argue that automation and artificial intelligence during previous transitions were manageable by humans. The changes that were required to take advantage of automation and artificial intelligence within organizational processes were slow enough that humans could adapt to the changes. Whether through re-education or adapting to equivalent jobs, humans could transition given their current abilities.
Today, however, artificial intelligence and the transitioning of the economy from a physical one to a software one has accelerated the shifts that employees must deal with. Perhaps beyond that of human capacity.
In some respects, artificial intelligence is the beginning of redefining what human capital means in the economic system. For centuries, human capital has been a critical part of powering the economy but perhaps we are on the cusp of eliminating or, at least significantly, diminishing its need?
For several decades, we have managed employees and organizations to a mathematical standard. Whether it was forecasts or performance models, there was a constant push by organizations and management to achieve those forecasts and performance models.
In many respects, that constant push wasn’t unwarranted. With processes primarily being driven by humans and the processes that enabled humans to produce goods and services, there was always room for improvement. Until potentially now.
While artificial intelligence is still in its infancy, the rapidity of its improvements continue to astound. It still may not be ready for prime time but the rate of advancement and its potential means that employees and organizations will have to adapt sooner than expected.
What does this adaptation look like? For many, there is a belief that it will look similar to what has come in the past. However, there are an increasing number of individuals who look at the current transition as something of an unknown. Indeed, it could potentially be a dramatic transition to the extent that it eliminates the need for human capital in the economic system.
In the past and, to a certain extent, the present, organizations have continued to push for efficiency. For centuries, managers were always looking to maximize throughput via the resources at hand. Whether optimizing the number of employees or reorganizing the division of labor, managers always had innumerable opportunities to improve efficiency.
What are the standards that managers are leveraging to manage? The simple answer is a mathematical formula, one that is predicated on perfection. In many respects, the need to manage to perfection has not only driven the impetus of managers for decades but some of the contra reactions as well. These contra reactions include the rise of unions and labor employment laws and regulations.
While many would argue that the constant tension between managers and employees is a natural one and should be encouraged, the latest innovations in technology have the ability to completely disrupt the natural tension. Automation and artificial intelligence have the potential to tip the scales in favor of managers and efficiency more than ever before. It begs the question concerning what will happen to the average employee.
As advances in automation and artificial intelligence continue to accelerate and disrupt not only blue collar professions but increasingly white collar professions as well, the question needs to be asked, what is the role of human capital in the economy? Putting aside creativity for the moment, if one looks at the traditional role of human capital in the economic system, it has been for the creation of goods and services.
While many entrepreneurs and futurists would state that just as in previous transitions workers will find new roles, is that realistic, particularly if automation and artificial intelligence continue to advance at speeds which no human can easily replicate? Are we entering an era where replacing human capital is no longer about finding lower cost human capital but of technological capital instead?
For the most part, technology has been leveraged to improve the productivity of employees for decades. It has been a reality of every transition and it allows organizations and managers to drive towards “perfect” efficiency. However, as automation and artificial intelligence becomes more “human-like”, at what point does it become futile for humans to attempt to keep up? Not only that, what will the purpose of human capital be in this fully automated economy?
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