Cognitive Systems Institute Group Speaker Series Presentation by Tor Andreassen, Director Center for Service Innovation at NHH Norwegian School of Economics on August 6, 2015.

1. IMPACT OF SMARTER
COGNITIVE SYSTEMS ON
SERVICE SECTOR JOBS?
Tor W. Andreassen
Professor
Norwegian School of Economics (NHH)
Director Center for Service Innovation (CSI)

2. Structure
• Frontline employees (FLE): brief background
• Something is happening
• Upside/Downside of technology
• Some implications
• Q&A.
2

3. Service workers
3

4. Self-checkout
4
According to the Global
EPOS and Self-
Checkout 2013 study,
the number of self-
checkout terminal
shipments will soar to
60,000 by 2018.

5. Something new is happenng
5
Rotational tours are designed to provide
scalability; their programmatic approach
can be widely applied, even to blue collar
workers.
Transformational tours are designed to
provide adaptability; their personalized
approach requires a greater investment of
management time, but allows them to
tackle key issues and initiatives.
Foundational tours are designed to
provide continuity; their permanent
approach helps codify the culture and
institutional memory of the organization.

6. Something new is happening
• According to Freelancers Union and Intuit, more than
40% of the US labor force will be freelancers by
2020, i.e. they are not employed by a company.
6
”Nearly one in three working Americans is an
independent worker. That's 53 million people
– and growing.”

7. 7
Amy L. Ostrom, A. Parasuraman,
David E. Bowen, Lia Patrício,
and Christopher A. Voss
Service Research Priorities in a
Rapidly Changing Context
Journal of Service Research May
2015 18: 127-159,

8. THE UPSIDE OF
TECHNOLOGY
8

9. 9

10. 10

11. Robots 'invade' Starwood Hotels
11
”A robot
delivers an
order of fresh
towels to a
room at the
Aloft Hotel in
Cupertino,
Calif.”
"It is certainly not replacing our staff but it is
augmenting our ability to service our customers,"

12. 12
Toshiba's humanoid robot "Aiko Chihira" at a Mitsukoshi department store in Tokyo.
Photographer: Akio Kon/Bloomberg

13. The good news
* Many elderly people can no longer drive safely.
Robotic cars will help them to be more mobile and
independent
* costs saved throughout the supply chain have the
potential to lower costs and provide big economic
gains
* a trillion to the US economy from lower accident
costs, lower insurance and boosted productivity
* over 30,000 lives saved and 240,000 reduced car
accident hospitalizations in the US alone every year
13

14. 14

15. Scie fi or not: Robots are on the move
15
The strong, lightweight,
agile robots wouldn’t
replace the mason.
Instead, they'd enable
smarter labor by taking
on repetitive, back-
breaking tasks and
introducing logistical
efficiency. As an
example, deploying
materials across the
site faster, and with
fewer errors

16. Robots start to think
16
A new deep-learning
algorithm developed by
Saxena and graduate
student Jaeyong Sung
enables a robot to operate
a machine it has never
seen before, by consulting
the instruction manual –
probably available online –
and drawing on its
experience with other
machines that have similar
controls.

17. AI with a human touch
17
Whereas many other technologies
demand that humans adapt their
behavior in order to interact with
“smart machines,” Amelia is
intelligent enough to interact like a
human herself. This equips her to
deliver a top quality customer
experience for any of the
businesses in which she is
deployed.
Amelia doesn’t have just an IQ, she
has an EQ as well. She is equipped
to sense human emotions and
respond appropriately

18. Is AMELIA smart??
18

19. Meet Dr Watson from IBM
19
“We’re going to enable
personalized health care on a
huge scale,” said John E.
Kelly, a senior vice president
who oversees IBM’s research
labs and new initiatives.”
What will be really game
changing is its ability to assist
people with the complex and
nuanced tasks of decision-
making and analysis.

20. THE DOWNSIDE OF
TECHNOLOGY
20

21. IMPACT ON LABOR AND
INCOME
21

22. AI, Robotics, and the Future of Jobs
(AARON SMITH AND JANNA ANDERSON, 2014)
” Will networked, automated, artificial intelligence (AI)
applications and robotic devices have displaced more
jobs than they have created by 2025?”
• YES: 48%
• NO: 52%
N= 1896 experts
22

23. How Canada’s oilsands are paving the way for
driverless trucks — and the threat of big layoffs
23
”Suncor Energy, Canada’s
largest oil company,
confirmed this week it has
entered into a five-year
agreement with Komatsu
Ltd., to purchase new heavy
haulers for its mining
operations north of Fort
McMurray. All the new trucks
will be “autonomous-ready,”
meaning they are capable of
operating without a driver.”
“That will take 800 people off our site,” Cowan said of the trucks. “At an
average (salary) of $200,000 per person.” = about $160 million per year
(of base salary).

24. Prediction
• Using the most conservative estimate, expert
members of the Institute of Electrical and Electronics
Engineers (IEEE) have estimated that up to 75% of
all vehicles will be autonomous vehicles by 2040. We
can now be fairly certain that these occupations will
experience job losses in the next 25 years.
- Taxi and Bus Drivers
- Truck and Delivery Drivers
- Car Manufacturers and Car Salesmen
- Mechanics Doctors/Surgeons/Lawyers/Insurers
- Traffic Cops, Driving Instructors and Parking Wardens .
- Train and Plane Industry
24

25. “For workers to win the race, they will have to
acquire creative and social skills.”
25
The study, a collaboration
between Dr. Carl Benedikt Frey
(Oxford Martin School) and Dr.
Michael A. Osborne (Department
of Engineering Science, University
of Oxford), found that jobs in
transportation, logistics, and
office/administrative support are at
“high risk” of automation.
More surprisingly, occupations
within the service industry are also
highly susceptible, despite recent
job growth in this sector, they say
http://www.oxfordmartin.ox.ac.uk/downloads/
academic/The_Future_of_Employment.pdf

26. 26
”At the opening of Japan’s Robot
Revolution Initiative Council on
May 15, Abe urged companies to
“spread the use of robotics from
large-scale factories to every
corner of our economy and
society.” Backed by 200
companies and universities, the
five-year, government-led push
aims to deepen the use of
intelligent machines in
manufacturing, supply chains,
construction, and health care,
while expanding robotics sales
from 600 billion yen ($4.9 billion)
annually to 2.4 trillion yen by
”2020.
Japan Unleashes
a Robot Revolution

27. BUT LET’S LOOK AT THE
FACTS
Unemployment
27

28. But tech does not allways lead to fewer jobs
28

29. 29

30. 30

31. The income issue
31

32. The income issue
32

33. 33

34. 3 x critical voices
34
”Elon Musk’s nightmare: A Google robot army
annihilating mankind”
”Artificial intelligence 'could be
the worst thing to happen to
humanity': Stephen Hawking
warns that rise of robots may be
disastrous for mankind”

35. Some research questions
• Creating customer loyalty and emotions in a M2C-
interaction
- Sherry Turkle, MIT, claims that humans can develop strong emotional ties with
technology
• Do we trust f2f relations more/less than M2C relations
• How may/may not robots contribute to (in)equality in
society?
- Will C * (1+ r) > L * (1+w) ref to Thomas Pikerty
• What may be some of the long-term problems with robots
and AI?
• A life without work?
35

36. "WE CAN'T SOLVE PROBLEMS BY
USING THE SAME KIND OF
THINKING WE USED WHEN WE
CREATED THEM."
Albert Einstein
36

37. Thank you!