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This article was first published in the May 2017 international edition of Accounting and Business magazine.

Techno-fear is nothing new. Worries that advancing technology could lead to mass unemployment can be traced back to the start of the industrial revolution in the 18th century – and have never entirely disappeared. A pamphlet written in the early 1800s by the Luddites, textile workers whose livelihoods were threatened by the growing use of machines, argued that such inventions were ‘expedients for dispensing with the labour of the poor’. Fast-forward to the US of the early 1960s and President John F. Kennedy said that the decade’s biggest domestic challenge would be to ‘maintain full employment at a time when automation … is replacing men’.

So far these dystopian predictions have not come true. As technology has advanced, it has displaced routine jobs, only to create new, more creative and value-added alternatives. ‘Throughout history, technological progress has often been disruptive, but it has not been a net destroyer of jobs for economies as a whole,’ says Mark Zandi, chief economist at Moody’s Analytics, a subsidiary of the credit rating agency. 

But some experts worry that this time it could be different, and that artificial intelligence (AI) and advanced robotics could be poised to take a big chunk out of the labour market. Almost half of American workers have jobs that are at high risk of automation, according to The Future of Employment: How susceptible are jobs to computerisation?, a 2013 paper by Oxford University’s Carl Frey and Michael Osborne.

‘Among the main worries is that technology is encroaching further into white-collar jobs,’ says Fiona Czerniawska, a co-founder of Source Global Research and a former head of strategic planning for EY in the UK. ‘Instead of just replacing manual and low-skilled jobs, machines are increasingly capable of replacing intellectual labour too.’

Workers in the professional services sector, who might have considered their jobs too highly skilled to be vulnerable, are now in the line of fire, Czerniawska argues. Accounting, auditing, bookkeeping and tax preparation were listed by Frey and Osborne as among the functions most at risk of being automated. ‘All of the major firms are investing heavily in technology that will automate the more routine parts of the audit process,’ says Czerniawska.

Deloitte, which can trace its origins back to the 1840s, has been at the forefront. In March 2016 the firm announced an alliance with Kira Systems to deploy artificial intelligence software that it said would ‘free workers from the tedium of reviewing contracts and other documents’. The technology has the potential radically to accelerate the process of analysing documents, which lies behind a host of business activities, from mergers to leasing arrangements. 

Craig Muraskin, managing director of Deloitte’s US Innovation group, notes that ‘wading through miles of corporate jargon, hunting for key words and patterns, can consume considerable time and resources’. Technological advances would enable Deloitte to redeploy talent ‘to higher-value activities’ and permit its human workforce to focus on ‘more strategic matters’, he says.

Meanwhile, KPMG has been making use of AI from McLaren Applied Technologies to speed up and improve the accuracy of evidence gathering and the production of reports.

Such systems have been gaining ground in legal services too. The UK law firm Freshfields, which has been legal adviser to the Bank of England since 1743, is another venerable institution that has enthusiastically adopted artificial intelligence. It claims to have boosted efficiency by between 40% and 70% by using software from Kira Systems.

‘This could be potentially revolutionary for professional services firms, doing for them what robots did for assembly-line manufacturing,’ says Czerniawska. ‘There is a lot of routine work performed by investment banks, law firms and auditors that can be largely taken over by artificial intelligence.’

That could mean better value for customers, and better accuracy and speed. It would also change the jobs mix in professional services companies, with fewer routine, entry-level functions and more roles focused on creative thinking and analysis. Appealing as this sounds, it could produce problems. ‘Overall there would likely be far fewer people,’ says Czerniawska. ‘If the lower steps on the career ladder are removed, how do companies create the leaders of the future?’

Technological change is already being reflected in the training of accountants. ‘There is less need for simple bookkeeping tasks and more for strategic thinking,’ says Dorothy Wood, head of education at ACCA in Europe. ‘Accounting education has shifted away from rote learning towards more business analysis.’

While the elimination of many routines should make countless jobs more satisfying, it could contribute to rising inequality. ‘It is an economy in which the rewards go disproportionately to those with special talent and expertise, along with those who own the technology that is reshaping the workplace,’ says Marc Chandler, an economist at Brown Brothers Harriman in New York. 

Many economists believe that advances in technology partly explain the recent widening of the income gap, with median real wages stagnating, while the earnings of the top tier have been pulling away from the pack. The top 0.01% of American earners managed to double their share of the national income from 3% to 6% between 1995 and 2007. In contrast, as of late 2016, the median household income in the US was 1.6% lower than in 2007, adjusted for prices, and 2.4% below the peak reached in the boom of the late 1990s. And the US is not alone. Average real Japanese and German household incomes have flatlined for more than a decade. ‘Technology has not been the only force at work here, but has certainly been a big contributor,’ says Chandler.

The rapid pace of this change could prove an additional problem. ‘While technological progress has not reduced overall employment, it has produced periods of disruption and bouts of rising joblessness,’ says Zandi. ‘And the faster the rate of change the harder this can be for societies to adjust to.’ 

Certainly, the development of AI appears to be accelerating. In their 2014 book The Second Machine Age, MIT professors Erik Brynjolfsson and Andrew McAfee cite recent developments in driverless cars as an example of the breakneck pace of change. In the early 2000s, some experts contended that such technologies had hit a roadblock due to problems replicating some aspects of driver behaviour, yet by 2010 Google had overcome these.

Amid such upheaval, those displaced by technology could have less time than before to develop new skills and find new opportunities. The need for lifelong learning in the workforce could increase, as people seek to maintain their place in the employment market. To keep one step ahead of the machines, education and training systems would have to focus on the kind of creative thinking or human interaction skills that artificial intelligence cannot yet easily replicate. And governments would have to rethink welfare systems to provide a safety net for those forced out of their jobs by new technology. 

Christopher Fitzgerald and Fernando Florez, journalists