“Computers cannot deal with unfamiliar situations. Human beings, on the other hand, are programmed to continually develop.”
A conversation with Professor Christoph E. Mandl about the skills and capabilities of machines and the unpredictability of the future.
Your book “Auf der Suche nach Industrie-4.0-Pionieren” (In search of Industry 4.0 pioneers) addresses the issues of digitalisation, highly developed automation, robotics, networks and 3D printing, and how these and other developments are changing the world of work. What conclusions did you reach? Is it true that hierarchical structures are being broken down and cooperative work is increasingly encouraged?
I identified two contrasting developments. In the purely knowledge-based companies that I studied for my book, such as Google, Apple, McKinsey etc., there is an increasing tendency towards cooperative work and improved communication, and the structures are less hierarchical. But there are also many cases where the opposite is true. Traditional companies, such as the entire energy industry, are still very hierarchical organisations, to an almost military degree.
Why are these two sectors developing so differently?
In fields such as software and pharmacology, the healthcare sector etc. – where knowledge has a very short shelf-life and innovative strength is what determines a company’s success – the priority is to respond rapidly to new developments in technology. That cannot be delegated from above. If we compare this with coal mining, for example, technological developments are rare, and it is more a question of working as efficiently and quickly as possible. Companies that compete on the basis of productivity gains, rather than innovative strength, are generally managed very strictly, almost like a military operation. For the knowledge-based industries, the complexity of that knowledge requires a very broad foundation, i.e. their employees. We need people who can offer new ideas and contribute to innovative development, rather than employees who simply do what they are told.
At the moment there are still many physical products being made by manufacturing companies. However, digital business models are clearly on the rise. What are the technologies that have the potential to turn our working environments upside down in the next few years?
I think 3D printers have potential that is nowhere near fully developed yet. Electronics and software are also developing constantly. Machines – from smartphones to saws – are being equipped with ever-increasing levels of intelligence and becoming simpler to use. That changes the way humans and machines interact and consequently also their capabilities and areas of application. And the more people are able to take advantage of technology, the more worthwhile it becomes. In the energy sector the prognosis now is that renewable energies will replace traditional fossil fuels. Clearly that will result in enormous changes in the economy. Many companies will simply cease to exist or they will sell completely different products. I assume there will be marked improvements in the health sector too. For instance in the field of infectious diseases, cancers and suchlike, where there are currently significant constraints in developing our understanding and expertise, there is intensive research and development work under way. A crucial factor will be how research funding is allocated – that is what determines where the changes will be greatest. I anticipate this will be in the health and energy sectors.
Artificial intelligence Will machines and robots take over one day?
The notion that machines and robots will take over one day is pure science fiction, completely misleading and just scaremongering. To be able to exercise power in this way, machines would have to have free will and the ability to learn for themselves, to adapt and to recover in the event of failure. These are human qualities that currently no robot, however intelligent, is even close to providing. I cannot even see on the horizon any possibility that such a machine could be created. A good example of an obstacle to this fictitious notion is the ability to learn a language. For decades now people have been working on developing good translation software. And although a great deal of money is being spent on programmes like Google Translate and others, the results are far from satisfactory. So within the foreseeable future, we are not going to succeed in creating robots with the mobility, flexibility and thinking abilities that come anywhere near the human capacity for learning. Of course there are computers that perform tasks more quickly and accurately than humans, but these are always clearly specified and controlled tasks, where there is no need for independent further development.
Despite this, there is a tendency for people to trust machines more than they trust themselves or other people. Perhaps there will come a point where it just seems more convenient to relinquish free will and hand over to a machine that will make decisions for us and tell us what is right or wrong?
Well, it is already possible to delegate tasks to machines that can do them better than humans can. But only specific tasks that can be defined by an algorithm. Experts know that computer programmes always produce some errors. That means we have to consider very carefully in which areas it makes sense to delegate tasks, and where not to. Tasks that require unforeseeable problems to be solved, where intuition and creativity are needed, will still need to be done by humans. Imagine a complication arising in an aeroplane in flight for which the computer is not programmed. Unlike a human pilot, the computer will not try to find a solution, but simply respond with an “error” message. In this case I would prefer to have two highly trained pilots on board the plane. Similarly, in the field of Industry 4.0, I have not yet seen a robot that deals with maintenance; there is no robot that can repair other robots. That is not going to happen soon, either, because this also needs a creative mind that is capable of rectifying a problem that has never occurred before in the best and fastest possible way. Computers cannot deal with unfamiliar situations. Human beings, on the other hand, are programmed to continually develop. This is what we call evolution.
So as you see it, the opportunities and potential of new technologies are somewhat overrated. Looking into the future, based on what we know now, and on human socialisation, what do you see? What will revenue systems look like? How will we earn a living in the future? How will leadership and management systems change in the future?
I understand the desire for a single recipe for the future, but in reality we do not have a homogenous present and cannot expect that the future will be homogenous either. Companies like Google and British Petroleum are as different from each other as it is possible to be, yet both operate very successfully in the market. Strategies need to be developed that are specific to each firm. Industry 4.0, for instance, is a project for the future, and not simply a product that can be bought and implemented. The critical factors are company-specific and sector-specific expertise and a good understanding of the opportunities for each company. This is true for management as well. Management styles need to be developed, but this must be done in a way that is tailored to the individual company. A company that operates on an international level will function differently from a regional business. As I see it, we cannot make predictions about the future, but merely aim to identify trends. And always with reservations about how systems in general respond to trends.
Our Future of Work Report does not aim to provide an answer, but instead to offer readers a range of different perspectives, presented alongside one another. In your opinion, how should companies prepare for the future?
We cannot predict the future. Today we do not know what kind of technologies will be developed in the next 30 years. We do not know how the markets will respond to climate change, for example, as this becomes more conspicuously apparent, and we do not know how people will react to specific eventualities, opportunities and changes in the environment. The unpredictability of the future of course creates enormous flexibility for managers, because they have the scope to shape their own futures. When company executives say that they are guided by forecasts, they have already forfeited some of their capacity to shape their own future. As I see it, the role of management is to shape the company’s future. What this looks like is very individual and each company must develop and create this for themselves. Many companies need to ask themselves if their business model should remain the same in the future, or whether it makes sense to adapt or expand their spheres of operation. In some business sectors, the “sharing economy” has already established highly specialised markets. Think of Uber, Airbnb and car-sharing providers. The exciting aspects of these businesses are falling transaction costs, and marginal costs approaching zero, with scalability that can function extremely quickly, without the need to own resources. From the customers’ perspective, they are learning that in the apparently “gratis economy”, they exchange their personal data for services and information. At the moment we are not at all aware of the value of our data as a currency, or of the extent to which we use it to pay for things. I could certainly imagine that in the next few years, the value of personal data will grow enormously and that in 30 years time we will perhaps save less money, but will conserve our personal data instead. Or perhaps it will turn out that this scaremongering about personal data is complete nonsense and that in fact we all benefit from the use of it. It will be fascinating to see.
Prof. Christoph E. Mandl studied mathematics at the Vienna University of Technology and is a PhD graduate in Operations Research from the ETH Swiss Federal Institute of Technology Zurich. He is Director of Mandl, Luethi & Partner based in Vienna and Zurich and also a professor at the University of Vienna. Prof. Mandl has extensive experience in supporting and assessing projects and programmes in innovation. His conceptual background is how to make the best use of ideas and methods from innovation management, Knowledge Creation and organisational learning to firmly establish the capacity to create radical innovation as a core competence in enterprises.
Recommended reading: “Auf der Suche nach Industrie-4.0-Pionieren. Die vierte industrielle Revolution im Werden.“ (In search of Industry 4.0 pioneers. The fourth industrial revolution is under way.) Author: Mandl, Christoph