The proliferation of Automation & Robotics within the financial services sector attracts obvious attention, especially from those interested in disruptive innovations.
Mario d’Aragona is the Managing Partner at TML Venture Ltd and supports companies in finding tailor-made investment solutions. His industry focus is on renewable technology, energy and food companies.
He is a seasoned finance executive who serves as CFO for fire & security, food, energy and clean-tech global companies; has ‘turn-around’ experience and has been involved in the management of re-financing growing businesses: TML Venture Ltd supports companies in finding tailor-made investment solutions.
Speaking exclusively to IMS StratNews, the executive offers his views on the relevance of Automation & Robotics.
Navigating trendy Ai phrases
‘Artificial intelligence’ (Ai) and ‘Robotic Accounting’ (RA) have emerged as some of the most popular phrases when considering innovation within the world of business and, specifically, financial services. As phrases go, they sit at the top of many companies ‘must-have’ operational lists – but what do they really mean?
From my perspective, the definition of Ai’s power is the ability to perform tasks requiring Human Intelligence characteristics, such as visual and speech recognition.
Examples of this are seen with the Mercedes 2014 S-Class, which is capable of driving semi-autonomously in stop and go
city traffic, or the 3D Kinetic movement recognition add-on to the Xbox360. There are, of course, also those chatbots applications – which are becoming almost ubiquitous – such as Siri, Alexa, and Google Assistant.
Designers of RPA (Robot process Automation) software aim to mimic human actions. These tasks can have a variegated level of intelligence content, from a basic ATM machine providing cash, to an unsupervised autonomous driving vehicle: Think about Amazon’s Kiva robot, designed to move materials within their warehouse; as well as robots utilised in other factories.
Why everybody’s talking about Automation & Robotics
There’s really nothing surprising about the emergence of automation – think about the British Industrial Revolution which led to innovations around the mechanisation of agriculture and textile manufacturing in the early 1800s, or the production of the Ford Motor Car in the 1900s, when engines took over the production activities of humans and transport activities of animals, such as horses.
Admittedly, the transition to new technology was difficult for some existing workforces, and led to the emergence of protest movements including the Luddites, who represented textile workers.
But, innovation is inevitable, which is why the robotic era is exploding now – because it’s technically possible!
New software tools like ROS (Robot Operating System), python language, Arduino programmable robots, and new sophisticated Ai algorithms have opened the way to an exponential development in the AI/Automation space. This trend is currently estimated to grow according to Moore’s law. The same principle applied in relation to the growth of semiconductors.
As a result, costs related to these products/applications have dropped, making them accessible to the mass market.
The weak signals from Automation & Robotics
In my opinion, the transition to a robotic world isn’t only a source of competitive advantage for a limited number of lucky companies to gain market share – it’s a large scale phenomenon capable of redesigning the outlook for the global economy, and wider society.
However, it hasn’t produced totally positive results: US productivity has almost tripled since the 1970’s but real hourly compensation has stayed flat. Salaries, which previously contributed to 67% of US GDP, now account for only 58% only.
Other trends include an increase in inequality of 95% relating to income gains, which have been hoovered up by the wealthiest 1% of society. In addition, the advancement of Automation & Robotics, has played a significant part in the explosion of interim and part-time jobs (the Gig Economy).
Similar insights have been seen in the UK and in EU countries, with work conventionally performed by humans being seen to reduce, and be carried out by machines.
Where Automation & Robotics are most prevalent in ‘real-life’ business
Automation & Robotics are pervasive and perhaps even unavoidable within may areas of both business and private life.
In the world of industry. advanced agricultural drones have the ability to manage crops at a level of granularity that would be inconceivable for human workers, with a swarm of robots be able to manage the maintenance of crops.
Meanwhile, in the world of E-retail and entertainment, companies like Amazon, eBay and Netflix have overshadowed the importance of traditional brick and mortar companies like Blockbuster.
Examples of superseding Automation & Robotics (Ai):
Quill Narrative Science’s technology which provides automated written articles
Amazon’s and Netflix’s capability to generate automated book and movie recommendations
Workfusion’s provision of RPA (Robotic Processes Automation)
Computerised unsupervised Algorithms like blockchain
Watson – the ‘cognitive’ computing analytics provider for the trading floor,
all of which play a part in the diminution of both manually skilled and professional skilled jobs .
Automation & Robotics versus a singularity
Back in 2014, the late Professor Stephen Hawking penned an article about the perils as he saw them connected to rapidly advancing artificial intelligence, which he described as “potentially our worst mistake in history”.
Professor Stephen Hawking viewed the advancement of Automation & Robotics as “potentially our worst mistake in history”
He intimated that, whoever achieves fully cognitive self-enhancing Ai first, will effectively be uncatchable; and ultimately no one will be able to derive income from work. In addition, income from capital ownership of machines will become concentrated in the hands of a few: And the rational owner will not want to hire more workers than necessary; meanwhile, machines are evolving and becoming, already in many cases, autonomous workers.
The question is, what will be the response of governments to this scenario?
It is of course hard to say, but it is possible that governments will react to these changes within their economies by instituting aggressive income redistribution. Possibly, they will introduce a minimal salary for their citizens equatable to the Reddito di Cittadinanza in Italy.
ABOUT Mario d'Aragona :
Mario is a seasoned finance executive, who served as CFO for fire & security, food, energy and clean-tech global companies. He has turn-around experience and managed to re-finance growing businesses.