Digital Transformation: Automation Isn’t Killing Jobs. Chronic Low Productivity Is.

It seems like not a day goes by without hearing about how automation will leave millions unemployed, cast aside to a life of destitution as capitalism storms ahead without them. Here at Human we think that with the right structures and technologies in place, this dark prediction couldn’t be further from the truth.

It’s not hard to imagine why the general British public might have adopted such a gloomy look of our industrial future. The past 30 years has not painted a pretty picture of UK industry. Perceived as old-fashioned and not as sexy as other industries such as finance or technology, manufacturing rarely gets the credit it deserves in the UK.

This is in stark contrast with some of our closest neighbours like France and Germany where insightful management and investment in newer, more advanced technologies has kept the industrial sector as a core pillar of their financial and social fabric. The UK has struggled to keep pace with the productivity and output from foreign competitors as we’ve underinvested in our infrastructure, technology, and skills for decades. Other countries are already making moves to take this further and upgrade their capabilities with additional robotics and automation - technologies which have thus seen poor adoption by British industry.

This contrasting approach to progress is borne out in productivity figures. Labour productivity has long been a mainstay of how economists measure the state of an industry, but rarely have manufacturers prioritised it themselves, generally focussing on profit instead. Productivity is measure as a workers output per hours, and the figures don’t make for easy reading - workers are 25% more productive in Germany than they are in the UK. Historical data shows us the gulf is only getting bigger.

This decline in the productivity of our industrial sector is worrisome, and has been ignored for far too long. For those of us in the north, industrial decay (and the social decay that comes with it) is not an abstract, difficult-to-imagine concept but a scar on our collective past. The hardship faced by former industrial communities is still being felt today, and the subsequent mismanagement of their long term recovery is a huge component of the rampant inequality between the north and the south.

Contrary to the popular narrative it’s new technologies like automation that are creating new sectors and opportunities in 2018. Yet as it stands, other countries with established contemporary manufacturing bases are much better positioned in terms of attitude and investment to make the most of the opportunities presented in the next 15-20 years.

Similarly with Brexit inching ever closer and a disastrous no-deal scenario looking all too likely, British manufacturers must look at how to remain competitive and maintain stability in this time of extreme flux. In our highly globalised world it is no longer sustainable to maintain conservative attitudes towards new technologies and processes. If you don’t implement change and keep pace with the industry, someone else will - and take the opportunities this change presents with them.

But it doesn’t have to be this way.The countries which currently outmanoeuvre the UK could act as a model for a prosperous, industrious future. Accepting that protecting and expanding our manufacturing industry will require a huge coordinated push towards new technologies such as automation from a variety of stakeholders is key.

At Human, helping businesses assess what opportunities these technologies present for them and their future is at the core of what we do. When we work with any business our digital transformation model has three core stages:

Digitise. If a lot of the information and data in your business is stored on paper, or even worse, just in someone’s head - you need to digitise it. In 2018 data is virtually a currency of its own, and having those insights should be key to the decision making in your business. Make sure the data you’re generating is trackable, readable, and shareable.

Automate. Do your have a lot of staff doing repetitive admin work dealing with accessing and actioning on data such as endless copy and pasting between systems? This could be solved with well designed digital tools that share this information between them automatically. Then their skills could be used on more productive, higher value tasks elsewhere in the business.

Innovate. Now that (where possible) your processes are running themselves, you have more time than ever for your staff to develop your staff to spend their time doing quality control, refining processes elsewhere in the business, or investing in R&D. All of these things help you to deliver more and grow in the long run.

We believe this process is a sustainable framework for improving the wealth and wellbeing of the UK industrial sector after decades of internal and external neglect. Thoughtfully implemented automation can deliver improved productivity and economic growth whilst providing better jobs for those who would’ve been displaced by industrial decline. We need to carefully consider to what extent the narrative around automation is becoming a self fulfilling prophecy, informing expectations for these promising new technologies that strangle their potential for social good.

Discover how we helped Swift Dental, the UK’s largest dental lab save tens of thousand of working hours on their processes with custom digital tools which reduced their order processing times from 120 seconds to 3. These tools and operational excellence have supported Swift in growing rapidly into an expanding business, winning awards for their technology innovation.

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