Advances in cloud computing and software mean that new technologies such as AI and blockchain are set to hit the mainstream by 2020 like never before. These so called ‘disruptive technologies’ have the ability to radically impact the business landscape, making tangible changes to the way we live and work. In the past, technological disruption of one industry didn’t necessarily mean the disruption of another. AI and blockchain are different because they can be applied to virtually any industry. In this article, Contracting Wise considers both the implications and opportunities created by AI and blockchain for contractors.
What are AI and Blockchain?
Simply put, AI is the theory and practice of building machines that are capable of performing ‘intelligent’ tasks. AI often revolves around the use of algorithms. An algorithm is a set of instructions that a mechanical computer can execute in order to achieve a certain objective. Many AI algorithms are capable of learning from data to produce new algorithms – in this way, so called ‘machine learning’ attempts to replicate human thought.
Meanwhile, blockchain is essentially a digital filing system that stores data in an encrypted database. Despite having risen to prominence because of its use in the cryptocurrency-world, blockchain technology can be used to record any transaction of value. Because each transaction or ‘block’ of information is distributed across a network of many different computers, it enables the creation of highly secure databases that can only be read and updated by those with permission.
Who will be affected by new technologies?
According to a report by KPMG, “By 2030, intelligent agents and robots could eliminate as much as 30 percent of the world’s human labor, requiring as many as 375 million people to switch job categories entirely.” When you develop AI that can understand language, recognise patterns and problem solve, often more efficiently than humans, the disruption isn’t contained. Similarly, blockchain technology is based upon direct ‘peer to peer’ transactions between the computers in a particular network, without the need for third party involvement, such as a bank. The practice of offering secure and trusted documentation of transactions is one that reduces the need for manual involvement in virtually every service industry.
Tech experts are predicting that mid-level clerical and administrative work will be most vulnerable to automation. This means that specialised manual work such as construction, catering and gardening will still be in demand, as will jobs that require face-to-face interaction. At the opposite end of the spectrum, work that requires a high level of training and education will also be required, such as tech jobs relating to programming and coding.
How can contractors respond to the changes presented by technology?
Technology is evolving at a rapid rate, and shrewd contractors will take advantage of these developments rather than resisting them. A recent industry study showed that independents are more attuned to market trends than those in employment. Contractors see themselves as being in charge of their own careers. This means that contractors are more likely to take the initiative to stay up to date and “skill proof” their careers against factors that could affect their futures. Almost three-quarters of self-employed workers described themselves as primarily responsible for acquiring new skills. By contrast, only 62% of employees considered this their responsibility.
New technology will present the contracting sector with both opportunities and challenges. However, the best way for contractors to respond to the changes is to keep up-to-date on how new technology will affect their sector and to adapt accordingly. Developing a social media network relating to your sector is a good way to stay informed. Business networking sites, such as LinkedIn, offer the chance to join groups and engage in relevant industry discussions. Sourcing two or three sites that are relevant to your profession and creating news feeds to your email will help you to stay updated. You can create feeds that are related to contracting and also your particular industry by specifying relevant keywords. It’s equally useful to inform yourself on general news and events. Like all business, the contracting sector is heavily impacted by external factors such as politics and economics.
By developing an understanding of how technology will affect their industry, contractors can predict which skills will be in demand and ensure they take steps to acquire or maintain them. Contractors can also look at diversifying their service offering as well as actively developing more niche or specialist skills that technology is unlikely to replace in the near future. If you have such skills, then devising a strategy to target specific clients, such as hyper-growth companies where skilled contractors are in particular demand, could also pay off (see next week’s article on hypergrowth for more information). Lastly, contractors should also invest in soft skills and those based around face-to-face human interaction, such as communication, counselling and mediation.
What top opportunities will new technology create for contractors?
In recent business studies, AI was the top choice among all companies as the technology that will have the greatest impact, with 38% of surveyed hypergrowth startups employing a form of AI in their business. Meanwhile, a new report published by PwC found that 84% of companies said they are “actively involved” with the blockchain technology. In addition to the requirements of existing companies, this technology is also creating innovative new businesses.
The proliferation of blockchain and AI across so many industries is already creating a growing need for skilled technical workers to maintain the technology that underpins their day-to-day functioning. The technologies in this area are advancing quicker than engineers are able to learn how to develop them. As such, there are not enough people with the relevant expertise to fill the growing number of vacancies. This presents a huge opportunity for contractors with skills such as programming and coding to capitalise on this growing skills gap.
Furthermore, taking a proactive interest in how these technologies work and their wider impact can also benefit contractors. Businesses that are emerging in this sector not only need workers with technical expertise, but also ones who understand communications and legal issues within the sector. Those with knowledge of these leading new technologies and their impact will undoubtedly have the edge.