2. 1 Available from Apple’s Siri program
2 Available from Google’s Self-Driving Car Project
3 Available from Amelia, through IPSoft, The Digital Labor Company
4 Available from Fox News, through The New York Post
5 Available from Pepper from Softbank Robotics Corp.
6 Available from OceanOne designed by Stanford by Bjorn Carey
The pace of innovation
in artificial intelligence
is accelerating
exponentially. Today,
robots are writing
reports, assisting
auditors, analyzing tax
information, conducting
legal research, advising
on medical treatments,
providing investment
guidance, and detecting
cyber breaches.
KPMG views Digital
Labor on a spectrum. On
one end of the spectrum
is robotic process
automation (RPA)
where activities are
characterized as process-
oriented and rules-
based. On the other
end of the spectrum are
cognitive technologies
where activities are
characterized as
judgment and skill
oriented.
“We’ll be seeing a lot of change over the next decade,
and from our point of view, it will be mostly positive.
The world is getting better and technology is a major
part of that.”
– Cliff Justice, Principal, Advisory Leader,
Cognitive Automation, KPMG
Virtualpersonal
assistants1
Self-drivingcars2
Digitalcustomer
serviceagents3
Humanoidrobots
thatservefood,
sellcellphones,and
exploreoceans
5
6
4
3. Not so long ago, the tasks that
technology is now capable
of doing seemed like science
fiction. But the solutions
of Apple, Google, Amazon,
IBM, and a number of other
innovators point to the almost
limitless potential of artificial
intelligence, a disruptive force
that will soon impact every
aspect of our lives.
That includes automating cognitive
work. Disruptive cognitive computing
technologies, smart bots, and
supercomputers are giving rise to a new
class of digital labor —software algorithms
that mine and analyze colossal masses of
information, reason and problem solve,
communicate in natural language, and
learn from past experiences.
Equipped with these ever-advancing
capabilities, cognitive systems are taking
over high-level, white-collar knowledge
work that was once outside of the
computing domain.
It is happening faster than you might be
ready for. The pace of innovation in artificial
intelligence is accelerating exponentially.
Today, robots write reports, assist auditors,
analyze tax information, conduct legal
research, advise on medical treatments,
provide investment guidance, and detect
cyber breaches. Tomorrow, they might
develop your business strategy, make your
operating decisions, or spin off their own
companies.
Whatever our fears about robots in the
workforce, it is where we are headed, and it
is undoubtedly going to impact your business
and your employees in many ways.
KPMG LLP (KPMG) believes the impact of
this new class of labor will be felt in every
aspect of your organization: how you plan
your business, how you train people for their
careers, how you deploy the workforce,
how you manage and evolve customer
relationships, and how you drive innovation.
You need to prepare your organization
for what will be a generational change in
business. We think the best way to do that
is to experiment with digital labor in your
own teams and processes—before you
have no other choice.
We can help you get up to speed.
Howtodisruptyourselfwithdigitallabor
Robotic ProcessAutomation Tools
(aka automation, robots)
Cognitive Platforms
(aka machine learning, AI)
Medical and
scientific
expertise
augmentationCall
center
automation
Translation
services
Robo-finance
advisor
Marketplace
insights
Complex
transaction
processing
Tax and
audit services
Legal
services
Judgment and SkillProcess and Rules
BusinessOutcomes
EfficientTransactions
processing
Simple
transaction
Regulatory
compliance
tools
Digital Labor Spectrum
Smart enough for smart machines? 1
4. WhyisAItakingoffandwhere
willitland?
AI is powering a new class of automation that is disrupting enterprises,
and entire industries. However this is not about a single technology.
Rather, it is a confluence of technical improvements, lower costs, and
generational demographic changes that are driving organizations to
accept and adopt technology.
Digitization is happening at an unprecedented pace and scale, driven by
the explosion of accessible data and the corresponding advancements
in data analytics technologies, machine learning and automation.
As technology becomes more accessible and costs decrease, it creates
knowledge and information at an explosive rate, driving faster and faster
innovation.
“Acquiring a body of knowledge and using that to leapfrog forward is
one of the reasons developed economies have been able to grow so
much faster than emerging market economies; they have so much
more knowledge embedded in them,” says KPMG’s Chief Economist
Constance Hunter.7
Additionally, interest and investment in AI has skyrocketed across the
globe. According to research from Bank of America, Merrill Lynch the
market for AI will grow from $1.7bn in 2010 to over $70bn in 2020.8
“Aligning technology and people
investments to allow the
redeployment of a workforce
to its highest and best use, and
to solve previously unsolvable
problems more rapidly and
accurately, is key for companies
to succeed in the future.”
– Richard Hanley,
Global and U.S. Advisory Sector Leader,
Technology, KPMG
7 Available from the Executive Symposium on Digital Labor, 5/17-19/2016
8 Available from Deep Interest in AI: New High In Deals to Artificial Intelligence Startups In Q4’15, 2/4/16
WillAIoutsmartus?
The accelerating pace of technological
change happening today is hard to fathom.
If progress continues unabated, futurists
like Google’s Director of Engineering Ray
Kurzweil say the impossible will become
possible.
Kurzweil predicts that by 2030
“nanobots”—– tiny computers that can be
implanted directly into human brains—will
connect us to the cloud, enabling us to
overcome the limits of our biology to reach
entirely new levels of superintelligence.
By 2030, he also thinks we will be able to
download a human brain into a computer to
simulate a person’s personality, memories,
knowledge, and experiences; at the
most existential level, we will be able to
live forever. By 2045, he says machine
intelligence will be on par with human
intelligence, a moment Kurzweil calls “the
singularity.”9
9 The Singularity is Near (Ray Kurzweil, 2006)
10 Available from the Executive Symposium on Digital Labor, 5/17-19/2016
Navigating the next industrial revolution
Market Realist
1
2
3
4
1784
1870
1969
?
Revolution InformationYear
Steam, water, mechanical production
equipment
Division of labor, electricity, mass production
Electronics, IT, automated production
Cyber-physical systems
Source: World Economic Forum 2015
Navigating the next industrial revolution
5. Fromdirtyworkto
knowledgework
As enthralling—and frightening—as these predictions may be, we
do not know exactly what the future will entail or what the social
implications of technological change will be. That is a topic for
another time.
What we do know, from a business perspective, is that every
organization will be impacted by the rapid innovation giving rise to
digital labor.
Cognitive technologies have already proven expert at doing manual,
routine, time-intensive, and low-value tasks—tasks that form the
underbelly of many businesses—better, faster, and cheaper than
humans. Now they are increasingly capable of doing any task that
involves accessing a source of knowledge and reasoning through
a hypothesis to answer a question—from performing surgery to
complex financial forecasting. These are the types of top-level—and
even C-level—jobs many once deemed safe from automation.
Clearly, we have arrived at the cognitive future. We are automating
brainpower in the same way that we once automated muscle power.
And like earlier industrial revolutions did, digital labor is challenging
CEOs everywhere to rethink many aspects of their businesses
and their strategies. According to KPMG’s 2016 Global CEO
Outlook, nearly 9 in 10 (85 percent) of CEOs are concerned with
integrating basic automated business processes with artificial
intelligence and cognitive processes. What’s more, 41 percent of
CEOs anticipate their company will be significantly transformed
over the next three years.
Digital labor is even disrupting our own business at KPMG. KPMG
has entered into a relationship with IBM Watson to augment our
expertise and expand our professionals’ reach. For example, by
using enhanced cognitive technology capabilities, KPMG auditors
are able to improve the consistency and quality of audits, analyze far
more data than ever before, and provide more granular insights and
guidance about our clients’ businesses, markets, and risks.12
11 Available from KPMG’s Digital Labor Market Study, a survey of 500 director-level executives. Respondents
served in a variety of roles at companies with $500 million or more in revenue operating in 11 different
industries and five global regions.
12 Available from the IBM News room, by Katy Rosati, 3/8/16
Casestudy:KPMG’s
cognitive-poweredaudit
“The power of cognitive technology, and
how it will revolutionize the audit process,
is breathtaking,” says Roger O’Donnell,
KPMG Audit Partner, KPMG.
KPMG has invested significantly in cognitive
technologies and people and processes to
support its investment. Its primary focus?
Revolutionizing audit services for clients
with deeper insights and smarter decisions.
From examining how large, global
enterprises recognize revenue to assessing
the valuation of a company or asset, the
firm is applying cognitive capabilities to
tackle some of the biggest challenges
facing auditors today.
Today’s audits typically cover a statistically
valid sample of data. Cognitive systems,
however, could theoretically cover 100
percent of the data.
Under the supervision of skilled and
knowledgeable professionals, cognitive
technologies allow KPMG auditors to
deliver:
— Higher-quality, more accurate audits
— Audits based on increased data coverage
and analysis
— More granular audit reports
— Deeper insights on controls, accounting
practices and reporting processes
— Broader perspectives on risks13
13 Cognitive technology and audit: The journey to innovation and transformation,
KPMG paper, September 2016
Customer loyalty
Top CEO concerns
88%
88%
85%
Impact of the global economy on their company
Having to consider the integration of basic automated
business processes with artificial intelligence and cognitive
processes
Smart enough for smart machines? 3
6. Stillnotquitehuman
As technology’s power advances, fear accompanies the awe. Is my job in danger? Can
my company survive in this new digital era?
Here is some good news for human readers. In most cases, digital labor offers
complementary assistance to human workers. So while robots handle the unskilled,
mundane, and dangerous work, we are freed up to do more meaningful and valuable
thinking, including inventing, evolving and managing new innovations.
After all, humans create digital labor. Labor still makes up more than 70 percent of RD
costs within high-tech industries such as computer systems design, telecommunications
and information and communications technology services.14
Digital labor is also essential from an economic perspective, helping to offset a
contracting white collar labor force in major markets worldwide, which is expected to
decline for at least the next 10 years.
In fact, the demand for high-skill jobs that require creativity, interaction, and subconscious
thought is actually on the rise as low-skill jobs decline.15
Just like how more ATMs did not
lead to fewer bank tellers,16
this follows a centuries-long trend in which technology does
not eradicate jobs, but rather moves people into more fulfilling, higher-skill jobs.
“Now we have technology that can simulate human reasoning and thinking and
be trained to work alongside humans in ways we’ve never had before; it’s a new
relationship between humans and technology that we’re experiencing,” says Todd Lohr,
Principal, U.S. Transformation Enablement Leader, KPMG.17
And finally, cognitive computing has the promise to lead to knowledge breakthroughs
we haven’t been able to achieve with solely human inputs. Take cancer diagnosis and
treatment. Cognitive systems are reading hundreds of medical journal article weekly and
finding correlations between the findings. No person, or group of people, could hope
to do this important work with anything close to the speed and depth of digital labor. In
cases like this, digital labor isn’t taking human jobs; it’s saving human lives.
“Creativity is a big part of cognition…When machines
can do that, maybe we will be obsolete. But until
then—and I think that’s some ways off—
I think we have a big future for human beings to do lots
of interesting things in the realm of work.”
– Constance Hunter, Chief Economist, KPMG
Human
valueis
unparalleled
Although it is becoming easier
to envision a world in which
humans are subordinate to
human-like technologies, we
have a crucial role to play in the
cognitive era.
FORTUNE columnist Geoff
Colvin says that no matter
what computers achieve,
many essential human
traits—such as empathy,
social sensitivity, collaboration,
storytelling, and relationship
building—cannot be replicated
by technology. When it comes
to work, we will continue to
bring value in areas that require
deep, emotional human
interaction.
Many organizations recognize
the increasing essentiality
of these skills as the world
becomes digitized. For
example, the U.S. Army
revolutionized its military
training to simulate human
interaction in combat zones,
and Stanford Business School
overloaded its curriculum with
exercises that let students
practice interpersonal skills.14
14 Available from the National Science Foundation, by Brandon
Shackelford and John Jankowski, 4/13/2016
15 “Toll and Technology,” James Bessen, International Labor Organization
16 Ruggles and others, Integrated Public Use MicrodataSeries: Version 5.0; Bureau of Labor Statistics, Occupational Employment Survey;
and Bank for International Settlements, Committee on Payment and Settlement Systems, various publications.
17 Available from the Executive Symposium on Digital Labor, 5/17-19/2016
18 “Humans are Underrated,” Geoff Colvin, 2015
7. Addroboticstoyourworkforce
All signs point to a future in which AI is as fundamental to a business as human talent.
Do not be blindsided. Here are some steps to get your company and workforce ready for
the advent of digital labor:
“CEOs see the
benefits of digital
labor augmenting
workforce capabilities
and enabling new ways
of doing business to
add customer value,
improve efficiencies
and reduce cost. They
see the combination of
digital and human labor
as an effective way to
execute their strategy.”
– Gary Matuszak,
Global and U.S. Chair, Technology,
Media and Telecommunications,
KPMG
1Evaluate what cognitive technologies are available and are likely
to become available in the near future.
2Investigate how your competitors use digital labor and what the
implications will be if they beat you to the punch.
3Look for areas within your business that may be suitable for
digitization—especially those that are routine and repetitive.
4Develop a strategy for technology transformation that considers
opportunities, challenges and risks.
5Experiment with digital labor, both alongside and in place of
human workers.
6Develop a change management strategy to demonstrate the
value of digital labor to your workforce, address automation anxiety,
overcome organizational resistance, and speed up adoption.
Smart enough for smart machines? 5
