Most weeks now I find myself silently saying “But didn’t you watch Terminator? Or Westworld?”. But to no avail. AI is coming and unless Arnie is going to re-boot, steal your clothes and your motorcycle and get going, there isn’t much we can do bar embrace it and hope it’s benign. But the implications for the workplace are huge. And the implications for finance are potentially as great.
Material costs are increasing as I type, and I don’t see any great sign that wage inflation is going to follow. If businesses fare less well as a result of the potential consumer spend pressure then they will need to address their cost base to ensure they hit the returns their shareholders are going to be expecting. Most of the CFOs I know started cutting cost in 2008 and, barring 2014, have been cutting ever since.
In 10 years time, AI may have reduced or removed all low-level driving jobs. An employee-less store has already opened in America. In a world where returns may decline then every aspect of business management will be fair game to automate, slim down and manage less expensively. So where does that leave finance?
It’s worth stepping back for a second and having a look at China as a role model. With the largest potential workforce of any country and with less fixed legacy infrastructure than most developed or developing nations, it could be our role model for the future. And therefore valuable when it comes to helping our children assess which skills will be most valuable to them when they start working.
The feedback is pretty consistent – if you want a job in 20 years time, get into care. Looking after the elderly appears to be the growth sector. And as one approaching that elderly status quicker than he’d care to admit, I say hurrah for that. But there is an underlying point here that is valuable to remember from a finance perspective. If you think about the function and its core activities, then it splits into delivery and added value. AI should be able to do both but initially it is going to pick up the easiest, most repetitive and people-heavy tasks. So in theory, anyone in core financial reporting and accounting needs to get out now and anyone in the value-added roles needs to stay in them forever.
But life is not that simple. Because if you want to be a CFO in the future then you need to develop the skills the future is going to want you to have. And it’s hard to see a future where you won’t want a technically competent CFO. But if computers take care of all the technical aspects for you then we have a challenge.
I’ll leave this with you all to contemplate. I’m sure as more information comes through about future developments on this subject, I’ll be back.