The Five Stages of Business Automation
To understand the gradual impact of AI on employment levels across various industries, it’s important to understand the stages of automation that businesses typically go through implementing automation into their work processes.
Note: this process isn’t uniform across all companies or sectors – organizations may progress through these stages at varying speeds, and some may never reach the final stages of automation even when the necessary technology becomes available.
Stages of Automation
The progress of automation within a company or a specific department can be roughly broken down into five separate stages.
Stage 1: Testing Phase
In this initial phase, automation is still being implemented and requires constant oversight. Instead of increasing productivity, it may even temporarily reduce it as unreliable systems are hastily put in place and tested. This is the stage where automation is most likely to be temporarily reversed if the performance fails to meet expectations.
Stage 2: Augmentation
AI allows existing employees to perform more work in the same amount of time, significantly increasing their productivity. Workers gradually learn how to use the available automation tools more effectively and efficiently. While this stage may not necessarily lead to significant layoffs, businesses can be expected to implement hiring freezes.
Stage 3: Partial Automation
A significant amount of the work is performed by AI; however, it often makes mistakes that need to be corrected. Only the best performers will typically retain their positions, and new entrants into the industry will find it increasingly difficult to find work. By this stage the workforce will have declined significantly, possibly by over 50%.
Stage 4: Human Oversight
In this stage, the vast majority of work is produced by AI – only a small team of managers is still required to provide oversight, occasionally verifying the accuracy of the output and intervening only when necessary.
Stage 5: Total Automation
In the fifth and final phase, humans have been eliminated from the process entirely. Manual human oversight is no longer necessary, as AI agents can operate seamlessly without intervention. Even managers are likely to be replaced, although in the case of a publicly owned company, the CEO and board of directors may remain simply for legal reasons and to provide a stamp of approval over important decisions.
Summary
The progression of automation varies significantly across different sectors. While some industries are rapidly advancing through these stages, others may remain in earlier phases for extended periods. It’s important to pay attention to the progress of automation in your company and profession as a whole in order to avoid being caught unaware.
For more insights into the progress of artificial intelligence and the impact of automation on various industries, you can purchase my guide to the AI Revolution here.
