The only thing I am sure of is that there is no way of knowing how many jobs will be replaced by generative AI.
– Carl Benedikt Frey, Future-of-Work Director, Oxford University
The History of Technology Keeps Repeating Itself
Technology has been displacing humans in jobs since William Lee invented the stocking frame to mechanize the textile industry in 1589. AI will do the same, although it’s one of the first technologies to represent a broad risk to higher-level white collar jobs. That means many of us who felt immune to previous advances in automation can now experience the same job-elimination fears as our predecessors in mining, manufacturing and agriculture.
The writers in Hollywood know this, which is why they’re striking. But I predict that in the long run, they’ll have no more success preventing AI from replacing them than Luddites did when they smashed machines in English factories in the 19th century. Technological progress is unstoppable – AI more than any other because it’s the first technology that can learn and improve on its own. The genie is out of the bottle and it’s not going back inside.
The Myth That AI Needs Humans
The people inventing AI keep reassuring us that we have nothing to fear when it comes to jobs. Alphabet (formerly Google) top lawyer Kent Walker told Fox Business, “Jobs will change, but not go away. AI automates tasks, not jobs.” Santiago L. Valderrama, who runs a Machine Learning school, tweeted, “AI will not replace you. A person using AI will.”
This encouraging, upbeat, optimistic message fits my disposition but is disqualified by my understanding of AI and the history of technology. While it’s certainly true that AI will help some people do their jobs better, don’t be fooled: This technology will, in fact, eliminate many jobs. And as AI becomes more capable, more types of positions will be at risk. Two economists from Goldman Sachs recently predicted that: “Shifts in workflows triggered by these advances could expose the equivalent of 300 million full-time jobs to automation.”
Historically, all technologies that have eliminated jobs in one area have created new jobs in other areas. Sure, advances in energy technology reduced the number of coal-mining jobs, but the demand for computer programmers went through the roof! The challenge, of course, is that these occupations demand very different skillsets, so you can’t just retrain a bunch of miners to become coders. When the composition of job types changes fundamentally, surviving the transition from the current state to the future state becomes the challenge.
Who’s at the Most Risk?
This is a tough question because we are in the early days of AI, and it is a very fast-changing technology. Rapid advances in computer processing speed, data transfer rates (e.g., 5G), combined with enormous increases in the amount of data generated and huge reductions in storage costs have created the nearly perfect environment for AI to thrive. I say “nearly perfect” because the imminent introduction of quantum computers will accelerate AI’s capabilities in ways that are hard to fathom. AI + quantum computing will be the real perfect storm.
For my industry, wholesale distribution, it’s likely that some of the most vulnerable workers over the next decade are content creators, analysts, customer service reps, warehouse workers and delivery drivers.
For many applications, AI can probably write better than you. If you don’t believe it, try this: open ChatGPT and use this prompt:
Please explain why it’s important for wholesale distributors to invest in artificial intelligence.
In about 10 seconds, ChatGPT wrote a compelling and accurate answer. I couldn’t have written a better response – could you?
Many corporations will soon have enterprise AI models, which are kind of like ChatGPT but armed only with your company’s data. Imagine you wanted to plan a promotional campaign and you typed this:
Select 250 SKUs most likely to grow sales if promoted at a 10% average discount during the month of October; create brief marketing descriptions for each of these SKUs; find images for each product from each suppliers’ website; set sales forecasts for each SKU if the average discount is 10% over a 30-day period; recommend order quantities considering minimums and ship pack quantities; prepare draft POs to each supplier; prepare marketing co-op support; request emails to each supplier; find images for each product from each suppliers’ website.
Much of this could be done by existing enterprise AI models; it won’t be long before the technology can do all of it. How many fewer analysts will you need if typing the proper prompt can get this work done in a few minutes? And this is just the start. Now imagine similar use cases in finance, HR, sales and operations.
Customer Service Reps
I have hated chatbots since they were invented, and I generally loathe automated attendants over the phone. But within the next several years, AI – which learns and improves all on its own, remember – will be able to handle many customer inquiries better than the humans it will replace. The technology will have unlimited capacity, will be available 24 hours a day and will have essentially zero variable costs when it’s in place. It’s not hard to see how this will reduce the number of people you’ll need answering phones.
Chinese ecommerce giant JD.com operates a fulfillment center in Shanghai that ships 200,000 orders a day and employs four people – who are there to keep the robots running. Granted, any time you have to pick from open ship packs, automation is much harder to implement, so the average MRO, plumbing, electrical, HVAC, etc. distributor will rely on some warehouse labor for a long time. But the robots are coming for most of these jobs, eventually.
Given the severe truck driver shortage, it’s a little hard to imagine this job could go away, but it probably will. Because humans are often terrible drivers who introduce road rage, texting and bad judgment to our roads, it’s probably a good thing to let technology drive instead. Indeed, within the next several years, AI will make it safer to sleep at the wheel than to steer it.
What About Your Job?
The full impact of AI is impossible to understand because it’s the most sweeping, foundational technology transformation in history. But imagine the changes over the past 150 years: horses to cars and tractors; railroads to airlines; telegraphs to smartphones; covered wagons to commercial rockets. I predict changes similar in scope but in a 50-year period of time due to AI’s ability to improve itself continuously. Whatever the specifics turn out to be, countless jobs – including many involved in wholesale – are going to go the way of Pony Express riders, railroad conductors, telegraph operators and wagon drivers.
The best advice I can offer right now is to understand AI as well as you can and be prepared to acquire new job skills if yours appear to be threatened. That kind of flexibility will serve you much better than trying to stop the relentless advance of technology: One of these days, someone will produce a movie about the 2023 Hollywood writers’ strike and there’s a good chance the script will be written by generative AI.
To get a jumpstart on your AI education, don’t miss our upcoming conference, Applied AI for Distributors Oct. 3-5 in Chicago. We have great general sessions, including a keynote by Zack Kass, Head of Go-to-Market for OpenAI, the makers of ChatGPT, who will spend 90 minutes presenting about the future of AI and answering your questions.
Many leading distributors are already sending attendees. This promises to be a high-energy, extremely educational event with fantastic networking. Someone from your company should be there.
Read the first two parts of this series:
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at firstname.lastname@example.org.