Since early humans picked up stones two million years ago and began to hammer and cut with them, our species has been on a quest to enhance productivity while reducing tedium and faff.

The coming decades could see us progress in this age-old pursuit like never before thanks to breakthroughs in artificial intelligence (AI) and automation. Many people, companies and investors are likely to become a lot richer and more fulfilled in the process. But it is unlikely to be a happy experience for all.

Consultancy PwC estimates that AI will make the world $15.7tn (£12.5tn) richer between 2017 and 2030. That’s equivalent to an incredible 14% of global GDP. Many companies are already seeing benefits to their bottom lines. A McKinsey survey of 1,843 companies in 2021 found that 27% of respondents already attributed 5% or more of their profits to AI.

Revenues from the AI industry are expected to boom. Grand View Research forecasts annual growth of 38% a year to 2030 from $94bn in 2021. Robotics, another important part of the automation trend, is also growing rapidly. 

The use of computers and robots to automate processes and aid decision making is likely to become a key differentiator between winners and losers in many industries.

AI and automation is one of six themes that make up Fix the Future’s technological change megatrend and features more than 450 companies backed by some of the world’s best fund managers.

Many of the major developments in AI are coming from tech’s usual suspects: Big Tech firms with appetites and capacity for investment in innovation both internally and through acquisitions.

For example, Alphabet, which some characterise as an AI company that accidentally became the world’s biggest ads business, is a leader in the field. Microsoft, Meta and Amazon are also noteworthy presences, and IBM boasts the largest number of AI-related patents of any company.

But PwC expects many non-tech industries to also benefit from its predicted $15.7tn AI windfall. It believes the three biggest of these winners will be healthcare, finance and retail. The latter could potentially use the technology to help manage inventory, logistics, marketing and product design.

The automotive industry, which is already a key market for industrial robots, could also be transformed by AI should autonomous driving go mainstream, as is widely predicted. Tesla has gone out on its own trying to develop camera-based self-driving technology while other autonomous car developers, including Alphabet’s Waymo, are using a combination of lasers, radar and 3D mapping.

Advances in robotics are creating machines that are increasingly dexterous and able to co-work with humans, so-called ‘cobots’. This could significantly increase the applications of robots and push the market beyond traditional manufacturing strongholds and further into agriculture, healthcare and warehouse logistics.

The four big industrial robotics firms, Fanuc, Yaskawa, Kuka and ABB are looking to benefit from these innovations, but they could face disruption from smaller, more nimble challengers.

All these advances in AI and automation are being aided by other technological developments including 5G, the internet-of-things (IoT) and cloud information storage. These technologies allow machines to communicate better as well as assisting the creation of vast, self-learning, neural networks.

As computing power has rapidly increased, recent years have seen AI achieve amazing feats. These include a machine beating the world champion at the fiendishly complex Chinese game of Go, figuring out how proteins fold and helping the rapid development of vaccines for Covid-19.

AI is gradually becoming more evident in people’s everyday lives, too. People live with AI virtual assistants accessed through phones and voice-activated speakers. It is being employed to provide increasingly sophisticated prompts and recommendations from streaming services, online retailers and advertisers. And for those who live in a select few cities around the world, it is even possible to hop aboard a robo-taxi which will use AI to help get you to your destination quickly and safely.

AI and automation could also prove particularly valuable when it comes to aiding and improving decision making.

A disturbing little judgement

It first became clear in the 1950s that simple algorithms and checklists tend to do a much better job than humans when making complicated judgements and decisions. A psychologist called Paul Meehl reviewed 20 studies that had pitted mechanical judgement models against experts and found that in all but one case the model did as well or better.

There has been an accumulation of further evidence to support this finding in the near-seven decades since the publication of what Meehl termed his ‘disturbing little book’. The same observation has been seen in many fields including medicine, law and the military. It has even been found that models built based on experts’ recommendations normally outperform those same experts when making judgements.

Nevertheless, assorted professions have staunchly resisted embracing the use of mechanical models.

It was not until the year Meehl died in 2003 that the first large-scale adoption of checklists in US hospitals began, which was spearheaded by a medical hero named Peter Pronovost. In the first year that Pronovost’s checklist for intensive care units was rolled out across Michigan hospitals it is estimated they saved 1,500 lives and $175m in costs.

Reflecting later in life on his book, Meehl wrote that machines were still a long way off competing with humans when it came to interpreting language, recognising patterns and constructing theories. AI, machine learning and natural language processing is bringing computers a lot closer to encroaching on these areas.

This could bring huge benefits to humans as a whole, but there could also be fierce resistance from those who feel their professional standings are challenged. Future Luddites – a machine-breaking protest group of textile workers from the 1800s – may be found in middle-management and the professional classes rather than artisans on the shop floor.

The losers’ lounge

For all its benefits, AI and automation also courts controversy. When car accidents occur, for example, there is evidence that decisions made by autonomously driven cars are far more controversial than those made by human drivers, even if autonomous cars are generally much safer.

Exactly how AI and automation will aid productivity and at what cost also raises some thorny issues. Especially for investors who hope to fix the future.

After studying 94 different occupations, investment bank Morgan Stanley concluded that 45% of US workers could see about 70% of their work automated. It is an ever-present debate whether this pivotal technology will do more to fix the future or ruin lives.

The World Economic Forum (WEF) predicted in 2020 that 85 million people could have had their jobs displaced by machines by 2025. But it is not all bad. Over the same period, it reckoned AI would create 97 million new jobs.

Historically, when repetitive, process-focused works disappears, people have found other useful and more interesting things to do. And AI and automation can be used to assist rather than simply replace human workers.

All the same, automation has in the past been found to disenfranchise large parts of the workforce and increase inequality. Many leading tech thinkers are advocates of a universal basic income to address these issues, much as the Luddites were early advocates of the minimum wage in correct anticipation that the spinning loom would erode pay and labour rights in textile mills.

The decisions by early humans to pick up tools to make themselves more efficient and proficient at tasks proved adroit. There are nevertheless likely to have been many stubbed thumbs along the way.