Source: Forbes.com Malinka Walaliyadde – Forbes Councils Member
This time last year, in a matter of a few weeks, we saw almost everyone on this planet change the way they live or work (not that we need reminding).
The velocity and scope of that transformation is unprecedented in history. While we know the current coronavirus pandemic will eventually end, everything is not merely going to go back to what it was before. The world has changed, and so have we — and we all know we can work differently.
Looking Back To Look Forward- For a hint of what is coming, it’s often helpful to look back.
History shows that financial crises and recessions have always been accelerants for adopting automation. From Black Monday in October 1987 to the 2007-08 global financial crisis, companies reeling from economic shock, pressed to tighten budgets, turn to smarter ways of working. Expect the same but more so now. This pandemic is not only different in its scope; it is beyond anything we’ve seen before. The size of this impact, and the simple fact that the virus has forced companies into remote work and automation for public health and safety, only adds momentum to the adoption of automation.
This move toward automation has been happening for years now. We have food delivery robots, warehouse-stocking robots, manufacturing bots and the artificial intelligence used to power these machines. Even before our current crisis, many executives projected that the number of companies rolling out automation would double over the next two years, according to a survey by Bain & Company.
Now, the pandemic has become an accelerant to automation as companies look for a way forward. David Autor, a professor of economics at MIT and co-chair of the MIT Work of the Future Task Force, called the current recession “an automation-forcing event.”
The Human Touch
As ominous as it sounds to some, the coming wave of automation does not mean we will have a dystopian future where robots take the place of humans. Although there is a risk for the kind of jobless recoveries we have seen in past recessions, it doesn’t have to be that way. Indeed, most well-known automation technologies may have disrupted labour, but they didn’t replace humans. When William Seward Burroughs created the modern-day calculator with his “calculating machine” in 1885, he didn’t wipe out the work of accountants.
There is something called the automation paradox — automation reduces the costs of a product or service, lowering prices, which then increases demand. That, in turn, creates more opportunities for workers and for new kinds of labour. The goal of automation is to increase efficiency, reduce costs or improve a service. Automation can also create a bulwark of resiliency against future crises. The purpose of automation is not to eliminate jobs, but to give workers and businesses the tools for better performance.
As the CEO and co-founder of a company that uses automation at the crossroads of AI and healthcare, I know the key to our success is the human touch. We call this “unified automation,” and it blends human judgment and subject matter expertise with machine learning to efficiently deliver better service. It also frees up people to focus on more meaningful work. Ultimately, it’s good for business, workers and customers.
Fits And Starts In Demand
As we slowly reopen our economy, consumer demand will come back in fits and starts. Businesses that have invested in automation will be equipped to manage that volatility in demand. Each company faces unique demands, making it difficult to predict workloads over the next year.
In healthcare, which I know the most about, health systems should face waves of pent-up demand from patients who have held off on elective or noncritical care. We commissioned a survey that found a majority of Americans will wait between one month to over six months to return to hospitals for routine care. This will require staffing flexibility that can be easily ramped up and down to respond to irregular spikes in demand.
This is different from other kinds of consumer and service industry businesses. While most industries will see surges after stay-at-home restrictions are lifted, they may be less acute. People will return to eating out, but dinner dates cancelled during the pandemic don’t accumulate. Neither do missed haircuts or trips to Hawaii. This is not the case in healthcare, where many of the cancelled procedures are necessary and will come back.
While each business must navigate its own course out of this crisis, we all share the same need to find the smartest way to change our cost structures. Investing in automation could offer the best opportunity for that as well.
The Operational Stress Test
Past crises revealed vulnerabilities we either hadn’t seen before or simply ignored.
After the 2008 financial crisis, a series of regulations were passed to protect the American public and the financial system. One of those was a “stress test” for banks to ensure they had sufficient capital reserves to ride out future financial crises. If we’d had these stress tests in place before the crisis, an analysis showed we would have been better prepared, perhaps shortening the recession.
Perhaps for this crisis, we should create an “operational stress test.” This would be to ensure businesses have an operational failsafe system to provide continuity during black swan events. Some of that may involve “virtual workers,” machines, bots or artificial intelligence to help workers and businesses continue performing consistently no matter the crisis.
The Future Of Automation
So if history should repeat itself once more, and this recession serves as an accelerant to the adoption of automation, that will likely be a good thing for all of us. We at Alpha Health are certainly seeing this trend play out for health systems and provider organizations in the healthcare market today.
By leaning on automation in these lean times, we can not only better navigate our current environment, but also set up a fundamentally more efficient and more effective operating model for when we’ve all recovered so we will be better prepared and nimbler when the next recession rolls around.