Student ID: 52095503

IN2002 Essay

Drawing on the discussions in literature and examining the available evidence, discuss to
what extent do you think, big data, AI and automation is shaping the future of the firm (in
terms of its existence).

ABSTRACT

This essay studies the potential influence of artificial intelligence (AI), automation and Big
Data on the future of firms and therefore their possible new outlook into the industry and
market. The main concept of this essay is the compatibility of AI, big data and other
computational skills with the structure of firms; this complementarity between firms and AI
and automation however won’t give rise to the theory of singularity but rather redefine jobs
and skills.

1. Introduction

The evolution of AI, big data and automation is moulding the future of firms to be more
customer-centric, efficient and digitized; this route to digitalizing all available information and
productively using the data has been in effect since the early 2000s however it’s only the
recent developments in the ‘next generation of general-purpose technologies’
(Morikawa,2016) which will play a significant role in altering the futures of many firms and
industries. Through the successful application of AI and automation, firms can have the
ability to increase efficiency beyond what is capable of humans (Fernald and
Jones,2014)and therefore change the job market as well as alter the working dynamics
within a company. Increased roles of AI, automation and big data, however, will also
increase reliance and dependency which may result in the marketing and service industry
shifting from humans to AI and automation; this will raise the question of whether it is
acceptable to replace humans with automation and therefore putting people’s livelihoods at
stake for productivity. This essay will examine the evolution of Big Data, AI and automation
in the context of it shaping the future of firms and how they might work in conjugation to
construct a future of inter-dependency and productivity.

2. AI and the future of firms

Artificial intelligence or AI is evolving to become a crucial asset for firms to become digitized
and therefore avoid any disruptions from the market or the economy. Through digitally
transforming themselves, firms are planning to alienate themselves from future disruptions to
their working atmosphere like Covid-19 (PEGA,2020); Covid-19 caused a large-scale shift in
the working environment where employees strayed from the traditional methods of working
inside firms to a more remote work-life. This repositioning from office life to remote working
indicates the digital transformation that is beneficial for firms in constantly changing
situations like in the current pandemic. AI is moulding the future of firms to become more
resilient to market disruptions caused by external factors like the COVID-19 virus. The
complementarity between AI and the firms indicate that the shape of firms will alter to allow
AI to play a greater role in the working lives of employees as well as the general structure of
firms. Additionally, AI is proved to be resourceful where humans lack and therefore there is a
greater chance of substitutability between them which will allow for increased efficiency and
complete control over certain aspects of work-life that humans can’t compare to.
Substitutability between AI and humans can be showcased through the introduction of smart
parking on the streets of London and in some universities; the outdated practice of ticket
officers and parking tickets is soon to be digitalized by the new technology of smart parking
wherein all factors from finding a parking spot to the ticket is all managed through the AI
system. In this new smart parking system, Big data and neural networks will be used to
create an algorithm (Ruili, Haocong, Han, O’Connell and McGrath,2018) that will provide the
relevant information to customers whilst AI will provide the necessary monitoring and vehicle
information required of parking places. This combination of AI and Big data will ensure the
fact that occupancy and organization in parking lots, the time of customers and safety of
vehicles is optimized whilst also ensuring that miscreants and errors don’t cause problems;
this level of efficiency and optimization is only possible for AI hence in the future, firms will
opt to replace certain jobs with AI in order to decrease costs and increase efficiency and
productivity. Overall, AI can provide a firm with the ability to optimize its actions in order to
provide the best results which will be beneficial for the company’s future and aid growth.

Although AI may be the best solution for certain activities, it still isn’t developed enough to be
the singular solution to all problems a firm faces due to AI still being in experimentation
stages in most firms. In the case of digital transformation, AI may be the answer to firms like
Amazon profiting from economies of scale and operational efficiency however, even then
multinational corporations like Amazon have decided to maintain retail stores in order to
increase sales. For firms like Amazon, AI plays a crucial role in their overall management,
invoicing and stock control (Birkinshaw,2019) however the intuition and imagination roles
rely on humans, not AI. AI shapes the futures of firms by increasing their operational
efficiency through deciphering patterns and then using the information to come up with
solutions but this method isn’t viable for finding solutions to problems with no prior research
and data or for comping up with creative ideas. All in all, AI has great capabilities for building
a futuristic approach for firms however it fails on intuitive grounds and lacks the ability to
accurately solve problems that it has never faced before.

3. Automation and the evolution of the workforce in firms

The face of firms is being altered by the evolution in automation; as automation replaces
manual labour and works alongside engineers, it is altering the way firms manufacture their
goods or provide their services. Governments and firms aim to modify their industrial and
employment structures through the ‘utilization of the Internet of things (IoT), big data, and AI’
(Morikawa,2016). Automation has the ability to change the outlook of how firms provide their
services or products whilst also increasing safety, simplifying routine tasks and increasing
productivity levels across organizations (Brown,2021). The rise in automation has led to job
roles such as airport assistants and vacuuming being completed through robots and Japan
is an example of automation completing menial tasks to great degrees of accuracy. Robots
are the future of many firms in the service industry wherein they will overtake humans in
many job roles to increase operational efficiency and reduce the costs of the firms.
Additionally, automation such as robots taking jobs that are riskier and detrimental for human
health signifies the fact compatibility between technological advancements and employment
(Oxford Economics,2021).
On the contrary, the singularity hypothesis states that eventually, automation will take over
the roles of humans in the working class sector. The increase of robots in the employment
field would eventually lead to the ‘hollowing-out’ (Birkinshaw,2019) of the middle jobs in the
job market which are repetitive and don’t require much thought process and hence can be
easily replaced by automata. However, the overriding argument is that automation, humans
and firms are in conjugation in order to provide the best results and the idea comes from the
fact that lateral thinking requires more than computing power (Birkinshaw,2019).
Additionally, employment statistics indicate that we aren’t venturing towards complete
substitutability between automata and humans but rather towards job polarization (Camiña,
Díaz-Chao and Torrent-Sellens, 2020) wherein new job roles will be created to aid the roles
of robots and automation. All in all, many studies have reflected the fact that there is a
positive correlation between robotic density, labour productivity and economic growth which
indicates the fact that the singularity theory is baseless and that the future of firms is
influenced equally by humans and automation.

4. Big Data and the changing face of firms

Big data plays a very important role in the future of firms that are becoming increasingly
digitalized and therefore are becoming more customer-centric. Big data applies the toolbox
of SML in order to garner more information and support its data conclusions as well as
improve its accuracy in making predictions and assumptions based on data(Feinleib,2014).
Big data is the collection of various data from numerous subjects regarding different options
and questions which are then used to predict future decisions and solutions. Big data
alongside Ai and automation has been used to create multiple technologies to help humans
like the Google Home and Alexa which are produced for the purpose of making life easier for
the user; these products further collect data and then feed it back to the adjoining firms in
order to help them improve their services and increase their customer-centricity. Big data is
altering the way first receive feedback and also helps them conduct market research in order
to better understand their customers and therefore make products that are better suited to
their audience (Wright and Schultz, 2018). Additionally, Big data can help shape the future of
firms by assisting them in abductive reasoning as it helps the NHS; NHS Midlands and
Lancashire CSU have been working alongside Big data and PredictX to create certain
models and AI applications to help detect cancer in the early stages and other serious
illnesses. NHS through the data collected by Big data and via the analysis of the data hope
to progress from ‘analyse and fix to predict and prevent’ (‌NHS Midlands and Lancashire
CSU,2018).

5. Conclusion

The AI, automation and Big data sectors are always improving themselves in order to come
up with ethical AI, data sharing, business process redesign and reskilling talent; these
factors are what will further incorporate AI and Big data in firms and therefore shape their
future. However, automation, AI and Big Data will never replace humans, there won’t be a
complete shift from humans to AI. Furthermore, Big data is only so reliable as the humans
providing the data. E.g. doctors might use automation to complete surgery however the
decision of how to conduct the surgery and the experience is the doctor’s alone similarly AI
can monitor and copy emotions however it can’t effectively react to those emotions because
they vary and the reply is different based on each person. AI, Automation and Big data are
changing the future of firms and humans however there will always be an interdependency
between them.

References

● Brown, A. (2021). Automation And The Future Of Work - How Engineered Systems
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● Camiña, E., Díaz-Chao, Á. and Torrent-Sellens, J. (2020). Automation technologies:
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● J. Ruili, W. Haocong, W. Han, E. O’Connell and S. McGrath, "Smart Parking System
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● Birkinshaw, J. (2019). The future of firms in an AI world. London Business School
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● Morikawa, M. (2016). FIRMS’ EXPECTATIONS ABOUT THE IMPACT OF AI AND
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● ‌NHS Midlands and Lancashire CSU | The leading provider of business and
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● ‌PEGA (2020). The future of Work; New perspectives on disruption & transformation.
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