Even if your job is high paying, it is wise to ask yourself whether it is common and repetitive enough to be done by a machine. If you conclude that it is, maybe it’s time to look for or create less commoditised work!
For many organisations today, the next big driver of job commoditisation is automation driven by smart machines.
Simply put, if a job is viewed as a commodity, it won’t be long before it is automated.
Thomas H. Davenport’s research on automation through artificial intelligence (AI) or cognitive technologies suggests that, if a job with fairly routine duties can be outsourced, many of the tasks typically performed by the worker can probably be automated, even by relatively dumb technologies like robotic process automation.
As an example, financial services is ripe for automation, given that many activities are relatively structured and there is relatively little product differentiation. Given this, there are both low-value and high-value commodity jobs in the financial industry and some of the lower-value ones, such as bank tellers, have been disappearing for a while, even if slowly. According to Hedge Fund Research Inc. in Chicago, Illinois some of the high-value jobs are being commoditised as well.
Sophisticated algorithms have begun to replace financial traders and hedge fund managers and about one-third of hedge fund assets are managed in that way. The result is that a robo-adviser, a machine that recommends investments to customers, has begun to replace human financial advisers.
As customers turn to mutual funds, exchange-traded funds (ETFs), and other passive investments, it’s relatively easy to determine an appropriate portfolio for consumers, rebalance it for asset allocation preferences, and harvest tax losses, all with little or no human intervention.
Since most financial markets are digital, machines can easily determine which investments perform best. Intuition and personal experience in picking investments count for little. So, even traditionally well-paid financial jobs are becoming commoditised and, as a consequence, automated. Despite this, automation often takes longer than we expect because organisational inertia can be high, because all jobs are slightly different from one another, and because people find ways to differentiate themselves.
So, how can we protect our work from becoming a commoditised job?
Start to focus on the most human aspects of your tasks, those that are most difficult to automate. In the financial world, for example, this often involves understanding human beings and the poor financial decisions they frequently make. One of Thomas H. Davenport’s students defined this as “financial psychiatry,” but a more academically respectable name is “behavioural finance.”
Financial advisers who understand behavioural finance can focus not on selecting investments for their clients, but on talking them off the cliff when they’re ready to “sell everything” after a market decline, or other careless financial decisions.
Or they can address the tricky problem of reconciling the differing risk tolerances of husbands and wives. Tackling such complex and emotional issues is not likely to be taken over by machines anytime soon!
Paradoxically, workers in finance and other industries that have high paying, specialised jobs can also make themselves less commoditised by helping with the commoditisation process. If they’re good at structuring decisions and understanding how those are represented in computers, they will have jobs for quite a while.
They’ll be able to monitor machine-based decisions, pick up the ball when the machines drop it (because of missing data, for example) and perhaps even improve machines’ decision making over time. It’s very difficult to predict how quickly jobs of various types will become commodities and how quickly the humans who perform them will be replaced by machines.
Jobs are comprised of a set of tasks, only some of which are usually automated.
Automation often takes longer than we expect because organisational inertia can be high, because all jobs are slightly different from one another, and because people find ways to differentiate themselves.
But no matter what your field, it pays to ask yourself whether your job is common and repetitive enough to be done by a machine. If you conclude that it is, it’s time to look for or create less commoditised work.
Adapted by an article written by Thomas H. Davenport President’s Distinguished Professor of Information Technology and Management at Babson College in Babson Park, Massachusetts, as well as a fellow at the MIT Initiative on the Digital Economy – MIT Sloan Management Review 201804