AI is already transforming the way we do business, and offers huge potential for companies to restructure and move towards a radically different cost-base. Here, we ask what changes are likely, and what the role of HR will be.
AI as a driver of business transformations and restructurings
With the increasing use of ChatGPT and soon-to-be-released Google equivalents, AI will no longer be avoidable in the workplace. Any defensive approach to this new technology is bound to fail. Businesses will therefore need to adapt, and in doing so find ways to use AI in a lawful, responsible and ethical manner. In law firms, for example, most standard drafting, research, mark-up and due diligence work will certainly be done by AI within the next two to three years (or perhaps even sooner). Just think about how quickly we all learned to use Teams, Zoom and Google Meet.
The key question is whether AI?will make existing jobs redundant.?My thesis is that?it will not. AI will need highly trained human beings to (1) ask the right questions (and follow-up questions), (2) identify mistakes in the AI-generated answers, (3) evaluate the resulting outputs, both from a legal end ethical perspective, and (4) figure out what to make of all this information. Leading companies are already developing their training capabilities and rethinking their legal and ethical standards when it comes to the future use of AI.
With this in mind, of course we can think of an awful lot of business that may or may not be replaced by AI. The key driver of future transformations, however, will not be AI (which may even pose questions more difficult than our current research models can predict), but the wide potential for its use. AI will be used far beyond the borders of wealthy European countries,?and will also offer an unprecedented chance for people in Africa, South East Asia, and Central and South America: places we used to call the second and third worlds, but which are now set to become epicentres of business. AI will drive the democratisation and thereby the wealth of these nations, as a major source of their income will come from people intelligently using AI.
Having said this, we may soon find out (with the new Apple spectacles set to be launched in the U.S. in 2024) that?the real driver of transformation may be the metaverse. Why? Because it will make the workplace?completely independent of a physical location, and so from access to (supposedly) higher standards of living and education. It is therefore no surprise that PE investors are already forcefully urging their target companies to shift from high cost to 'best' cost in almost every conceivable part of their business. Average companies based in Europe often have a high cost/'best' cost ratio of 80:20, but the target will soon be 65:35 or even lower. With the baby boomers just departing into their dream of retirement, jobs will simply not be replaced in high cost countries, which in turn means a unique opportunity for an almost cost-free restructuring. This scenario does, however, pose real risks for the career prospects, (contributory) social protection and retirement income of younger generations, if these matters do not receive appropriate political attention.?
HR has a vital role in helping businesses navigate this major transition and HR lawyers will need to assist with guidance, legal standards, recommendations to consensus-oriented consultation processes, and ethical guidance, in a holistic and value-driven transformation approach.
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