The Brave New [and Highly Automated] World, and the Future of Latin American Business

Automation and Artificial Intelligence: Threat or Help?

There are over 5 million search results when you Google, “Will artificial intelligence replace humans?". The doomsday scenario and visceral fear created by the potential “rise of the machines” has people like Elon Musk describing artificial intelligence as “summoning the demon,” and the biggest threat facing the world.

Advances in technology can absolutely simplify certain processes, buying behaviors and reduce operational costs. Just look at what Amazon has done to the retail sector, and not the least of which at where it’s taking consumer goods purchasing, with its newly released Amazon Go. With few or zero employees, the checkout-less process lets buyers come and go without pulling out their wallet or thanking a cashier. Of course, we are not to forget the number one job in the US today—retail salesperson.

The prospect of replacing teams – and businesses – is a real and valid fear. I believe Musk has a point, in that we must be mindful of the negative impact posed by massive adoption of AI and automation; but, there is also a bright side.

Automated tools open possibilities for many. Take Latin America, my home turf. Through automation, the region can compete in a world in which size used to matter. My company, Softtek, has always faced the perception that being a Latin American company and not having the demographics of India, we are at a disadvantage.

We’ve always had a different mindset. We are competitive because we are very productive, not because of scale or low cost, but because we can produce more with less. We’ve relied on high quality and being very focused on processes. We see technology as an enabler.

As in every other industry, new and seemingly scary developments in technology can absolutely change and automate many of the things we do. But we like to think of technology as an aid instead of a threat. Becoming experts of these technologies to harness them, and keep playing to our mantra that size doesn’t matter. I can now use technology to perform tasks that would otherwise need many more people.

Furthermore, we can now offer our employees more and exciting career development opportunities. Instead of mundane and repetitive entry-level tasks, they can now launch their careers by working alongside automated tools, evolving into programming and then developing them.

This example can be applied to many companies and industry sectors. But it is important to understand the trends, as well as be willing to visualize and accept a reality for the next 10-15 years that may be very different from what we're seeing today.

Let me illustrate how the forthcoming reality may be very different. Let’s take a look at one industry that has been close to the hearts of many politicians and economists in Latin America. The auto manufacturing industry, which has given the region a run for its money for the past couple of decades, is on the verge of vast disruption. This disruption is coming from multiple fronts.

On one front you have consumers realizing that they may not need to buy a car thanks to rideshare services like Uber or Lyft, as well as car sharing services like Zipcar or its Mexican equivalent Carrot. Add to this the not-so-distant future in which these cars will be self-driving in the streets of major cities, and you can build a good case for a contracting car market.

Then there’s the electric car and Tesla’s Model S, its poster child, which is made with only 500 parts compared to the 5,000 or more of a traditional internal combustion engine car. Fewer parts means fewer products, fewer manufacturers, less maintenance … and the threat of fewer jobs.

And to top all that, add 3D printing and advanced robotics changing the manufacturing plant. The entire auto industry, and its massive supply chain, will certainly look different 10 years from today. 

When technology advances become a threat to your business model there is a choice: pretend nothing will happen, and bury your head in the sand; or, embrace it, and become a leader in the use and creation of technology.

Agility and Being Purpose-Driven: Key to Surviving in this New Reality

My industry, the IT services sector, like many professional services segments, still uses man-hours as a basis for many performance indicators, despite the fact that many claim otherwise. It’s the same as legal, accounting or management consulting services. Yet today, that paradigm has come to an end. Automation and AI are putting a stop to effort-based business models. 

If you are to survive in the new environment, you need to adopt an agile mentality, and be clear on your purpose. In Softtek’s case, we strive to constantly live out our purpose of creating value through technology. If we’re clear about our purpose and remain flexible, we win – and our customers win.

Artificial intelligence, robotic process automation, data analytics, and other technologies (unimagined today!) will help us achieve our stated purpose of generating value for our customers.

When it comes to economic development in Latin America, and its enormous faith in manufacturing cars, for example, as a job generation engine, it’s time to start looking deep into the trends, and reconsider the vision for the countries in the region in this brave new world that is emerging. The business sector should kick-start this by visualizing its future in a highly automated world.

Can we look forward, and then deep inside, and re-imagine the purpose of the wonderful countries that conform Latin America? Can we re-define our purpose in a brave new world in which size doesn’t matter, but automation does?