Robots: Will they displace Sioux Falls workers?

The robot divide: Business, tech leaders disagree on automation’s future impact on labor.

When their work day is done, there are some in Sioux Falls who never leave the office. Never meet their buddies for a cold one before going home. Never head to their kid’s soccer game or to a workout at the gym.

The robotic welder at Hi Roller Conveyors, the CNC machine cutting out panels at StarMark Cabinetry, the cabinet-like robot rolling down hallways by itself and delivering chemotherapy drugs to patients at Avera McKennan Hospital — they don’t leave, they don’t take vacation days, they don’t tax the company’s health insurance plan.

And unlike their human counterparts, they almost never make mistakes.

The perfect employee, some would say. Or more pessimistically, others suggest, perhaps a growing threat to the future of humans in our local and state workforces.

An analysis prepared for Sioux Falls economic development officials this spring projected that thousands of jobs in some of the city’s fastest-growing fields might become obsolete within 10 to 20 years as robots and artificial intelligence take on a bigger role in the workplace and economy.

“Many customer service and support occupations (including those related to financial transactions processing and insurance claims processing) are highly susceptible to automation,” the report concludes. “This is a troubling trend for a region such as the Sioux Falls area with a high concentration of such jobs.”

Martin Ford, author of the book “Rise of the Robots,” says the threat of a jobless future taken over by artificial intelligence and machine learning is as great in South Dakota as it is anywhere.

“All the evidence points to the fact that these technologies are just going to get better and better and better,” Ford, a Silicon Valley software developer, said. “As they do, they’re going to encroach on more of the work that people do. How soon will that happen? My guess is it will be a 10 to 20-year timeframe when it becomes really obvious.

“It’s not easy to predict,” he continued. “But I think we’re on the leading edge of a big disruption now. It is going to unfold everywhere, including South Dakota for sure.”

In Sioux Falls, where the latest technology and automation available is already at work in hospitals, manufacturing plants, fast food restaurants and call centers, industry captains desperately searching for workers simply shake their heads in disagreement.

Certainly automation that loosens up bottlenecks in manufacturing and frees up humans to be retrained and shifted elsewhere needs to be part of South Dakota’s workforce solutions, said Pat Costello, Gov. Dennis Daugaard’s economic development chief.

But the idea that robots and artificial intelligence might some day create disruptive unemployment, especially in a state where everyone is scrambling to find workers, seems too farfetched to him.

“As far as the concern of displacing workers, I’m not sure when that comes,” Costello said. “But that seems to me to be beyond my lifetime, and my children’s lifetimes, and their children’s.”

Perhaps. Still, people aren’t ignoring the possibility.

In an analysis commissioned by Forward Sioux Falls, consulting firm Market Street Services took a look earlier this year at the 20 occupations locally with the highest probability of automation, as well as the number and concentration of jobs in the Sioux Falls area potentially affected.

Market Street was asked to look at the probability that occupations can be computerized over the next two decades, though it did not estimate the chance that all those jobs will be eliminated. Among the occupations it identified were telemarketers, title examiners and abstractors, mathematical technicians, insurance underwriters, watch repairers, cargo and freight agents, tax preparers, library technicians, data entry keyers, insurance claims and policy clerks, loan officers, insurance appraisers, umpires and referees, and tellers.

Eleven of those 20 occupations in the Sioux Falls Metropolitan Statistical Area “are at risk of obsolescence, amounting to just over 3,000 jobs,” Market Street reported. “This is significant for the region in that, as has been noted, some of the area’s fastest-growing job categories are also most at risk of elimination due to technological advancement.”

Mary Medema, director of workforce development for the Sioux Falls Development Foundation, said she wasn’t reading a great deal of impact into the report. But it is important to have a sense of what occupations might potentially be vulnerable, she said.

It’s no secret that technology has enabled many companies to do twice the business with fewer people, Medema said. That’s as true of manufacturers as it is of call centers, she said.

“We know that the machine can produce three times faster than humans, and then the human intercedes at a different point down the line,” Medema said. “I’m sure that’s happening in call centers. And so in this report … we’ve always been curious; you just like to keep track, for example, of what’s happening in telephone call centers.”

It seems especially pertinent now that Capitol One has announced it is pulling up stakes in Sioux Falls and eliminating 750 jobs in the community. Financial services officials say Capitol One succumbed to a challenge they’re all struggling with, finding enough employees to handle their volume of work. But Ford believes the day is coming when artificial intelligence and voice-activation software will make that a moot point.

In customer service in particular, he made note of the 80/20 rule, which says 80 percent of calls coming into a contact center are for roughly 20 percent of customers’ problems. When the technology of machine thinking and voice activation get to the point where customers call in and don’t even realize they are talking to a computer, “I think it’s easy to imagine disruption” in the workforce, Ford said.

“If Capitol One said, ‘Let’s invest in technology to address the problem,’ it starts in South Dakota but before you know it, you’ve got a technology that can replace a lot of people, not just in South Dakota but everywhere,” he said.

Of course talking to computers is no big deal for the technologically-savvy consumer, said Jon Pederson, vice president of technology for Midcontinent Communications. But for the segment of society that isn’t about to navigate a touchscreen at McDonald’s, isn’t going to download an app onto a cellphone to conduct banking transactions, isn’t going to be satisfied with a mass-produced kitchen cabinet, there have to be human workers with whom they can interact, Pederson said.

At some point, yes, as the technologically illiterate pass on, the need for call centers could pass away as well, he said.

“I think it’s generational,” he said. “I think a lot of younger folks would prefer not to talk to human beings. But inevitably, it will be the customers who make that determination. If the customer is comfortable with that and that’s the way it goes, then sure, it would impact our business model.”

Obviously, there has to be a cost benefit in all this for business, and there’s no question that industry officials here are catching on to the potential of that benefit. Robots don’t take vacations. They don’t call in sick. At very repetitive levels, they do jobs that employers have a difficult time filling.

At Hi Roller Conveyors, which makes enclosed belt conveyors for grain handling, the CNC plasma cutter — a cross between a laser and a torch — will do the work of five people, production and shop superintendent Wade Ewoldt said. Their $80,000 robotic welder with an operator takes on the labor of three to four humans, he added.

Over at StarMark Cabinetry, company president John Swedeen said his addition of Computerized Numerical Control (CNC) machines to cut panels and do routing in wood has eliminated about 12 jobs. And at Avera McKennan, each of the Aethon Tug Robots delivering chemotherapy to patients’ rooms does the work of about three humans.

The automation and technology, the artificial intelligence and voice-activated software, are here. Everyone can see the ATMs, the self-service checkout lines at grocery stores, the virtual bank tellers. That’s only the beginning, Ford predicts, as technology takes over not only low-skilled repetitive labor, but data analysis, report writing and other jobs held now by college-educated, white-collar workers.

South Dakota industry understands that, even if it doesn’t believe it will be as dramatic as Ford says. For all the declarations that robots will simply result in a shifting of humans into other more highly-skilled positions, a number of business leaders declined to be interviewed, concerned that it might incite too much fear among their employees.

They maybe should be worried, Ford said.

But this much, he insisted, seems certain: “Technology is getting better and better exponentially. We’re talking about an acceleration of capabilities. The impact could come way before we expect it. But once that impact comes, whenever it comes, it’s going to be everywhere.”

Occupations at risk

Forward Sioux Falls commissioned Market Street Services to assist it with a Workforce Sustainability Analysis project, looking to give perspective to local education and training communities on programs that might be critical to meeting Sioux Falls employers’ needs. Among the findings in the report, submitted in March 2015, was a look at the top 20 occupations with the highest probability of automation during the next two decades. The key in the findings is the phrase “can be computerized,” and does not estimate the chance that all of the jobs will be eliminated.

The occupations most at risk, and the number of jobs locally within those occupations in 2014, are:

Insurance claims and policy clerks: 781

Tellers: 740

Loan officers: 675

Telemarketers: 446

Insurance underwriters: 241

Cargo and freight agents: 167

Library technicians: 161

Data entry keyers: 147

Brokerage clerks: 104

Order clerks: 100

Title examiners, abstractors, and searchers: 95

Tax preparers: 66

Photographic process workers and processing machine operators: 39

Insurance appraisers, auto damage: 19

New accounts clerks: 18

Umpires, referees and other sports officials: 17

Sewers, hand: Less than 10

Mathematical technicians: Less than 10

Watch repairers: Less than 10

Timing device assemblers and adjusters: Less than 10

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