The Case of the Humble ATM

The buzzwords of the digital revolution are rarely far away: Big Data, AI, IoT, RPA, exponential growth, platforms, singularity, 4th Industrial Revolution, etcetera. The digital revolution is now over two decades old and, while few doubt its revolutionary impact on our economy, our society and on our lives, both the hypes and apocalyptic predictions are rarely far away. 

One of the most widely discussed effects is the impact of digital on employment. Studies from reputable institutions predict that half of the jobs, or more, will be replaced by automation in the years ahead. Indeed, history from the first three industrial revolutions (steam, electricity and IT) teaches us that the long-term shifts in employment due to technological change should never be underestimated.

One of my favourite stories to tell in this context is that of the humble ATM. The first automated teller machines were introduced in the 1960s and 1970s. In the decades that followed, ATMs rapidly spread and by now in the US alone there are some 400,000. In the early years, it was feared that the jobs of the human tellers would disappear. Instead, as studies reveal, teller jobs doubled in the US in the last 50 years from 300,000 to 600,000. What happened was that bank branches became cheaper to run and increased in number, while the human teller jobs included a wider range of non-automated customer services.

The lesson from this story is not only that we have a tendency to extrapolate linearly, but more in general that it is hard to predict the impact of technology on employment. Machines can complement what humans do and create increased demand that should not be overlooked when discussing the rise of automation. Yet it seems like it often is.

#strategy, #AI, #digitaltransformation, @kearney @johanaurik