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Artificial intelligence

Is Technology About to Decimate White-Collar Work?

Kai-Fu Lee, the former head of Google research in China and a top tech investor, sees a huge opportunity to automate routine office work.
November 6, 2017

Kai-Fu Lee, one of China’s best-known technologists and investors, thinks artificial intelligence is about to supplant many millions of the country’s office workers.

“This replacement is happening now, and it’s happening in a true, complete decimation,” Lee told a conference at MIT last week. “In my opinion, the white-collar workforce gets challenged first—blue-collar work later.”

Lee pointed to several of the investments made by his company, Sinovation Ventures, as clear signs of how routine office work is already being transformed by AI. For example, Lee has backed Smart Finance Group, a company that uses machine learning to determine a person’s eligibility for a payday loan. Sinovation has also invested in companies that automate customer service, training, and other routine office services.

There’s plenty of reason to take notice of Lee’s warning. Before becoming an investor, he created Microsoft’s research lab in China, and he became the founding president of Google China in 2009. In the 1980s, Lee also did groundbreaking technical work at Carnegie Mellon University on voice recognition using machine learning.

As a venture capitalist, he perhaps has a strong incentive to emphasize the likely impact of artificial intelligence. But his perspective on China is also important, given the enormous investment its government is making in AI and the potential for young industries to be disrupted (see “China’s AI Awakening”).

Lee identified four distinct but nonsequential waves of AI. The first wave is being fueled by the availability of large quantities of labeled data. This has given big Internet companies, both in China and in the U.S., an advantage in building their businesses and cementing AI expertise.

The second wave—which is more relevant to the kind of workplace disruption Lee sees coming—is based on the availability of company data, especially in industries such as law and accounting. Law firms might need fewer paralegals, for instance, if machines can quickly and efficiently search through thousands of documents in researching a case.

A third wave relies on companies generating data through new products or apps, or by paying for it to be created. And the fourth wave, still some way off, would bring fully automated services such as self-driving cars and robotic helpers.

“AI applied to different domains—and turned into products—will generate phenomenal value,” said Lee. “As a venture capitalist or a large company hoping to harness these technologies, this is the open age of AI.”

At the conference where Lee spoke, called AI and Future of Work, there was a sense that the tech world needs to prepare for the worst. When the event started, for instance, MIT president Rafael Reif said that recent developments in technology had the potential to affect society profoundly.

However, the conference also highlighted the extent to which many expert technologists and economists disagree on the likely impact of AI and automation. This is part of a much broader debate that has been going on in economic policy circles for a number of years now (see “How Technology Is Destroying Jobs” and “Who Will Own the Robots?”).

Several speakers at the event felt that AI will spawn new businesses and industries, creating more jobs than it destroys. Lee clearly doesn’t share that cheerfulness, though.

“Many optimists say in tech revolutions, jobs will go, jobs will come,” he said. “While there are places where jobs will be created, I’d say that’s the exception.”

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