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The UK is in a productivity slump, with the Office for Budget Responsibility’s (OBR) growth forecast revised down at the recent Autumn Statement from 2 per cent to 1.5 per cent. Still significantly lower than pre-crisis trends, “regrettably, [the country’s] productivity performance continues to disappoint”, commented the Chancellor Phillip Hammond.
However, the Government is taking an ambitious and innovative response to the problem: setting Grand Challenges that it hopes will put the UK at the forefront of the certain industries in the future. This includes a commitment to bring the UK to the fore of the artificial intelligence (AI) and data revolution.
And they’re putting their money where their mouth is. Further to the £4.7 billion Northern Powerhouse Investment Fund (NPIF) in science and innovation announced at the 2016 Autumn Statement, an additional £2.3 billion of spending will be provided in 2021-22.
So, why is the Government pursuing such an aggressive policy for AI? It’s been estimated that AI could add an extra £630bn to the UK economy by 2035, boosting the annual GVA growth rate from 2.5 percent to 3.9 percent.
However, after the barrage of horror stories in the media around mass job loss and industry disruption, it’s understandable that the potential of AI to improve productivity may seem counter-intuitive to some. So, how can AI improve productivity?
Across all industries there are aspects of work that take up valuable time and resources that could be radically improved with AI. Using AI-powered technologies, these activities can be automated with far greater accuracy.
For example in call centres, roughly 59 percent of all calls require the identification of the caller to proceed and, given the massive risk and cost of fraud, this must be robust. For that reason, regulations typically require banks to verify the identity of callers using at least two factors of authentication, and when purely relying on knowledge-based questions the customer service agents find themselves required to verify birthdays, mothers’ maiden names, or several digits of an account or social security numbers, etc.
As a result of this lengthy process, the average length of agent-handled security and identification checks is 33 seconds. With 7.9bn inbound calls handled by agents every year, this leads to a massive overall cost of £1.87bn for security and identification checking alone.
When you replace knowledge-based authentication with AI-powered voice biometrics, which uses the unique characteristics of the caller’s voice to identify them, not only are agents able to respond to the actual customer query more quickly, but both customer and customer service agents satisfaction has been shown to go up.
Focus on high-value tasks
AI can also improve labour productivity by taking on the low value-added tasks, so that humans can be more productive in their main purpose.
In customer service, for example, virtual assistants are able to respond to simple queries without or with little input from human agents. As a result, the human agents can be deployed to the more complex or emotionally pertinent questions. In a bank, for example, if someone were to call up to check if a transaction had gone through, the virtual assistant could respond after verifying the account. Whereas, if the customer were to call with concerns around possible fraudulent activity or to handle the accounts of a deceased relative, the human agent would respond.
This is also a good example of why AI will not necessarily displace human labour, but just change the way we work to support greater productivity. The use of virtual assistants in customer service, for example, will help take away the monotonous, low-value tasks from the human agent, which enables them to more quickly respond to the more complex tasks that many report are more interesting and rewarding to deal with. And despite decades of automation in the call centre and for customer service, our studies have shown that the human labour involved typically stays the same. The companies use the savings to offer new services that the companies could not have otherwise afforded.
Realising the potential
While presenting massive potential for productivity growth, there is no questions that AI will change many people’s careers and experience of work, just as we have seen since the introduction of computers and mobile devices.
It will be those organisations and individuals that harness the potential of AI to deliver higher value services that will see the greatest impact. This won’t be thanks to AI, but how it has been applied to improve output or service. This is why across any company seeking to make such investments, HR will need to ensure that while jobs change, with a shift awayfrom low-level to higher-value and more complex tasks, the workforce are continually upskilled to deliver this new work.
And for the new generation, digital and technical skills will never have been more important to ensure that innovative approaches and applications of AI continued to be explored and delivered. To that end, UK Government recently announced that it would be investing £84m over five years to improve the teaching of computing and drive up participation in computer science, as well as setting up a new National Centre for Computing Education.
Will it deliver?
With the UK’s productivity challenge, AI presents massive potential to revolutionise entire industries and improve their output. But it will take more than just than an enthusiastic Government to make the opportunity a reality.
Businesses across the UK must consider how AI-enabled technologies can be applied to different functions across their company to deliver improved productivity, as well as opportunity for future innovation. Only when pursued at industry-level will the potential for growth become a reality. And with that, we’ll just have to wait and see.