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Cheaper smart machines may replace workers - Gartner

17 October 2013, 06:44Duncan Alfreds

Cape Town - The cost of smart devices makes the likelihood that they will replace people in companies a reality in the short term, research has revealed.

According to research company Gartner, while smart machines and systems will dramatically change the way companies do business.

"CIOs [chief information officers] must change their mission to address the proliferation of smart machines in a widening range of jobs and consider the impact this trend might have on their career paths and on increasing levels of unemployment," Gartner said.

In the Industrial Age, automation and mass production resulted in the loss of many jobs; during the period of globalisation many jobs are moving to countries where labour laws allow for the cheap manufacture of consumer goods.

Increasingly, workers in the digital age are more mobile and company systems more automated than a generation ago and the growth of this dynamic will have serious impacts for companies who do not adapt, Gartner said.

IT hardware

"The impact will be such that firms that have not begun to develop programs and policies for a "digital workforce" by 2015 will not perform in the top quartile for productivity and operating profit margin improvement in their industry by 2020," Garter said.

"As a direct result, the careers of CIOs who do not begin to champion digital workforce initiatives with their peers in the C-suite by 2015 will be cut short by 2023."

The declining price of IT hardware also facilitates the move toward automated digital systems.

"It's worth remembering that IT cost is typically about 4% of annual revenue, whereas the labour costs that can be rationalised by smart machines are as high as 40% of revenue in some knowledge and service industries," said Kenneth Brant, research director at Gartner.

The company predicted that as the cost of smart machines came down, and implementation followed, there would be concerted moves to oppose the loss of jobs to technology.

There are also concerns that, even though smart machines may result in increased productivity, they may not face wide public acceptance.

As an example, shopping malls have to ensure security for their parking payment machines to limit vandalism and vending machines have long been subjected to damage from vandals or disgruntled customers.


As an indicator of the declining cost of hardware, Gartner reported that PC shipments declined by 8.6% or 80 million units in the last three months. This marks 18 months of consistent decline in the industry.

Gartner said the decline could largely be attributed to the growth of tablets, particularly as consumption devices.

"A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets," said Mikako Kitagawa, principal analyst at Gartner.

Brant said that technology will not result in mass unemployment, but the impact of innovation will have a dramatic and permanent effect on society in general.

"We won't need to develop a full-functioning artificial brain by 2020 for smart machines to have radically changed our business models, workforce, cost structure and competitiveness."

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