No. of Recommendations: 1
I can't offer the possible vision of the future from AI that AdrianC linked. Like Sergeant Schultz from Hogan's Hero's, "I know Nothing" about these potential impacts.
I did read an article from the Dallas Fed today about what is already happening.
https://tinyurl.com/393mxwvpBasically it distinguishes between codified knowledge "book learning" and tacit knowledge ("experience learning"). It basically says that AI can replace codified knowledge, but improve the productivity of tacit knowledge. And, at least so far, that trend is proving out.
Here's a concluding extract:
"
Young jobseekers may face tough goingReturns on job experience are increasing in AI-exposed occupations. Young workers with primarily codifiable knowledge and limited experience will likely face challenging job markets.
However, there appears to be less cause for concern about widespread job displacement for older, experienced workers, particularly those in occupations with high experience premiums in which AI is likely to complement the worker’s tacit knowledge.
The fact that AI can both substitute for entry level workers and complement experienced workers has implications for society and the way we organize work.
The current model of white-collar career progression involves taking an entry level job right out of school and doing codifiable tasks while slowly learning the tacit knowledge to become an experienced worker. Firms are going to find that AI is making this method of employee development cost-ineffective, at least in the short run.
Of course, leaving new employees off the job ladder is not sustainable in the long run. In the long run, AI adoption will require rethinking how entry-level employees gain experience on the job."
Note the last paragraph. How can you become experienced without experience? And experienced workers retire, grow old, and die. Can AI replace tacit knowledge? What will be its training base?
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The only area I have any insights from is reading what my prior employer, Exxon, is doing.
Before Darren Woods started reorganizing Exxon from 11 "siloed" operations into one combined organization, each of these siloed companies had their own saas, many modified internally, to run their operations and bookkeeping. Now Exxon is spending a lot of money and effort to replace all these systems with one unified one. This will permit AI aided analysis and consolidation of info across the whole, worldwide, multiple operations, company. They see this primarily as a way to improve their operations from AI learning. It may show ways to further reduce costs. But they're much more interested in how to do things better. It's obvious that AI capabilities to rewrite/replace prior codes will play a major role. They've also included responsibility for AI across the company within the Technology function.
In terms of tacit knowledge, Exxon is already running the drilling operations in the Permian from a centralized control room in the Houston area. A team of four, one of which is an outside contractor expert, continuously tracks each well and takes steps to improve performance and address problems. With people of this experience, can they be ultimately replaced with AI? Who is going to "watch the watchers"? A well blowout can cost billions - and kill people.
It's going to be a HR challenge to continue to bring in new young talent and develop them - maybe with a significant upfront cost. And have capable people willing to come. Maybe this is why now the average career of an Exxon employee is circa 30 years. The tacit knowledge is now developed over a long, well planned, process. If some of that is codified knowledge, so be it.
Right now, my "know nothing" view is that AI will be a supplement to XOM, and will not threaten it as a business. They will do what is intelligent to do.
My even less "know nothing" view is that companies that actually produce goods needed by society will also be helped, not impacted, by AI. That seems to match a lot of Berkshire, my largest investment. It is not as well organized and managed as Exxon - very hard to do with an unconnected conglomerate. But some large functions can take similar steps.
Hope they and others do.
