Digital transformation: Expect massive job cuts, says Gartner senior VP
By Lum Ka Kay June 1, 2016
- Don’t bother protecting jobs that are going to go away anyway
- Explosive growth in sensor deployments in the upcoming decade
THE Internet of Things (IoT) has been one of the key drivers for digital transformation, and Gartner Inc senior vice president and analyst Dale Kutnick (pic above) predicts that a rapid spread of physical sensors will take place on a global scale in the next five to 10 years.
However, this type of automation will also lead to massive job cuts, he warned. In the next 25 years, there are going to be much fewer jobs in the global market, he told a media briefing in Kuala Lumpur on May 31.
“Agriculture is already moving towards remote control vehicles, whether it’s for harvesting or planting. So it’s pretty autonomous, meaning fewer farmers will be needed.
“The question here is what are governments going to do with all this unemployment? That’s something they need to think about,” he said.
And while governments will have to address the fallout from digital transformation, companies have no choice but to embrace the trend or risk going out of business, sooner or later.
“They [companies] will have to go through digital transformation, slowly perhaps, but they have to because there isn’t a choice for them,” said Kutnick.
This will also result in dramatic reorganisations in many companies, he said, noting that the UK banking industry is already laying off staff.
“Traditionally, electrical or industrial appliances are built by operational technology people – product management teams and engineers,” said Kutnick.
“But when you start to ‘sensorise’ the products – where you deploy tens of thousands of end-points – you’ll require software updating and monitoring and device management, meaning you’ll need to be in touch with consumers.
“So it’s a going to be a totally different organisation because you’ll need three parts of an organisation – business development; the IT department and the product management or engineering team – to work together at an unprecedented level of cooperation if you’re doing this at scale,” he added.
The perils of job protectionism
Speaking on the prospect of digital businesses in Malaysia, Kutnick said it is “down to the industrial policy of the country.”
He said he saw no reason as to why Malaysia cannot be a big player in digital business as the country has an educated population and good engineering talents.
However, he also urged governments – not only in Malaysia but in other parts of the world as well – to not over-protect jobs that are going to “go away anyway.”
“Jobs are indeed important but when you go overboard, you’ll cripple companies. One problem … is that it’s difficult to do business here [in Malaysia] compared with Singapore, despite the fact that the cost of doing business is twice as much there.
“But you still find many companies locating their [regional] headquarters in Singapore.
“I think this requires an industrial policy change. If you overprotect or over-engineer the protection of your people, companies are going to go elsewhere.
“It’s better to protect the economy than to protect jobs that are going to go away anyway,” he stressed.
Meanwhile, thanks to the IoT, Kutnick said he expects to see “incredibly huge growth” in the deployment of sensors, as well as smart machines and vehicles.
“The world will grow from having a few billion sensors to at least 20 billion in the next five years, and this will help industrial companies to better manage their assets, do predictive maintenance, and get real-time information about equipment status,” he said.
“Such growth will revolutionise this physical world,” he added.
Sensor technology is not only about boosting productivity, but can also play a crucial role in safety.
Kutnick cited the train derailment in Philadelphia last year as an example.
“The train was going at twice the local speed limit. Suggestions had been made to the relevant authorities to install sensors on the railway track, but they refused due to the cost issue,” he said.
“But two days after this incident, sensors were installed. It’s not terribly expensive, but the bottomline is that the accident cost seven lives,” he added.
In the same vein, human error in automobile accidents is responsible for 90% of the 30,000 traffic deaths in the United States each year, according to Kutnick.
“This is where semi-autonomous and autonomous vehicles will need to come in. They’re not perfect, but I believe they will do better than humans,” he added.
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