Masters of our destiny

Accountants are no exception. Distinguished scholars, world-renowned journalists and professors have had their heads down, analysing the implications of the ongoing technological revolution on jobs, working conditions and income.

The truth is, we are in the midst of rapid economic globalisation, but is the future really so bleak? Are the robots coming? Are we at the mercy of invading algorithms?

“If your job can be easily explained, it can be automated,” Anders Sandberg, of Oxford’s Future of Humanity Institute, told Andrés Oppenheimer, whose book suggests that no one is safe as the robots close down on bankers, lawyers, doctors and even entertainers. 

Mr Oppenheimer’s book was inspired by a prediction by none other than the University of Oxford, which said that 47 per cent of US jobs are at risk of being replaced by robots and artificial intelligence over the next 15 to 20 years.

But Oxford is not alone. Experts across the globe are expecting a third of the global workforce to be automated by 2030.

“A lot of people assume automation is only going to affect blue-collar people, and that so long as you go to university you will be immune to that,” says Martin Ford, author of Rise of the Robots: Technology and the Threat of a Jobless Future. “But that’s not true, there will be a much broader impact.”

And while it’s easy to think that these authors are feeding the beast, i.e. preying on the robophobic, research papers by reputable institutes are putting forth similar predictions.

McKinsey Global Institute’s latest report, Australia’s automation opportunity, suggests that unemployment could spike by up to 2.5 percentage points as a result of the expected automation of up to 46 per cent of jobs in Australia by 2030.

McKinsey actually suggests that powerful new automation technologies such as machine learning, artificial intelligence (AI) and advanced robotics have already started to transform the Australian economy and are set to reach scale in the decades ahead.

Furthermore, the institute continues that while automation is sure to change the nature and mix of Australia's jobs, it will also pose skills and equity challenges across sectors, occupations and regions. 

“Without retraining for vulnerable workers, especially administrative and manual workers and those in vulnerable regions, income inequality could widen by up to 30 per cent,” the report says. So, change is imminent. But what can we do?

AI strategy

The Australian Council of Learned Academies (ACOLA) recently issued a report, The effective and ethical development of artificial intelligence, suggesting that AI also has abundant benefits, including the capacity to enhance wellbeing.

But, while strategic investment in AI development is considered crucial for future national growth, ACOLO exposes that Australia has yet to develop an AI strategy.

To remedy this, it recommends several steps, including the creation of a community awareness campaign, safe and accessible digital infrastructure, a responsive regulatory system, and a diverse and highly skilled workforce.

“What is now urgently needed, I think, is a national summit on AI – involving politicians, policymakers, business leaders and industry representatives and people from the broader community,” says Professor Anthony Elliott, member of the expert working group at ACOLO.

“This can help us consider how Australia might best fashion a common framework for the ethical development of AI, both in our country and internationally.”

Professor Elliott and his team are also recommending targeting skilled AI developers from overseas and bringing them to Australia to bolster the industry.

“What kind of society do we want to be? That is the crucial question for all Australians, and for governments as our elected representatives,” Australia’s chief scientist Alan Finkel says.

Reorienting lives

Dean of Melbourne Business School Ian Harper said at a Centre for Economic Development Australia (CEDA) panel event in Melbourne in June, that as a country, Australia has always been concerned about the distributional aspects from changes like automation. He noted deliberate government intervention can be used to make it possible for people to reorient their lives. 

“I can’t imagine that in this day and age, frankly, a party of either political persuasion would be allowed to get away with the government just turning its back on this sort of massive transformation,” he said.

Mr Harper made another interesting point, suggesting that as we face the uncertainties of an automated future, older workers could be the key to the transition.

“People are lurching into the labour market. Why? Because jobs growth is strong. Who’s coming back in? More women, but increasingly people over the age of 55,” Mr Harper said.

In 2018, the workforce participation rate for Australians aged over 65 was 13 per cent, up from 8 per cent in 2006, according to the Australian Institute of Health and Welfare. And research from McKinsey predicts that if productivity gains are properly distributed, automation will actually benefit Australians, adding trillions to our economy and up to $15,000 to workers’ incomes by 2030.

McKinsey also reveals the possibility of a boost in the annual rate of productivity growth of anywhere between 50 per cent and 150 per cent if Australia adopts automation technologies very rapidly.

“Our overall perspective here is that automation holds great promise in rekindling the kind of growth that delivers better living standards for Australia, higher wages, more consumer choices, higher standards of life and quality of living,” McKinsey & Company associate partner, Hassan Noura told a CEDA audience in Melbourne.

Mr Noura pointed out that there’s no shying away from the fact that automation, like many other previous waves of structural and technological change, will be disruptive.

“It will destroy some jobs, it will create many others, but I think it will also change profoundly almost every other job regardless of whether it is a new or existing job,” he said. 

“This is not unprecedented for Australia. We’ve seen this with the embrace of globalisation, with the embrace of the internet and technology. 

“So, we’ve done this before, and we’ve done it relatively successfully, in a relatively inclusive way.”

How about accounting? 

Accountancy is an age-old profession, thus bringing automation into the mix has changed what clients expect from the services they pay for as well as the way accountants work.

But there is no time for denial, accountants need to learn to swim because the flood of automation is coming. 

A few years ago, analysis from Accenture predicted that robotics will automate or eliminate up to 40 per cent of transactional accounting work by 2020.

And they were right. PwC, for example, already employs a robo-auditor RON, that analyses millions of transactions, relationships and patterns in moments, even interpreting the results, before flagging interesting findings to the team to explore.

“In effect, technological innovations are freeing up our skilled workforce to spend their time on higher risk aspects of the audit and provide more insight and analysis than ever before,” explains Sue Horlin, human capital leader at PwC Australia.

But, Lielette Calleja, director of All That Counts, assures that while fundamental changes are afoot as new technologies take hold, AI is not about replacing your bookkeeper or accountant.

“AI is not at the stage where it doesn’t require human intervention from a finance professional who is an experienced user of the technology,” says Ms Calleja.

“Clients’ expectations have evolved in general and they want to work with accountants/bookkeepers who can deliver a service that is better and faster. Better and faster is achieved by using AI technology.”

She reveals that this has been recognised by a number of her clients, who are taking the lead and using the information gained from automation tools to have deeper and more insightful conversations with their clients on a regular basis.

“We need to be embracing all the challenges and fundamental learnings today,” Ms Calleja advises.

“This isn’t a sprint to the finish line, it’s a marathon that will always change its course and we must be of the mind that we too need to be on the front foot to upskill or retrain on the technology that complements the human intellect of accounting."

The world does not function without accountants 

“Simply, the world does not function without accountants,” said the CEO of the IPA Group, Andrew Conway, following the World Congress of Accountants in Sydney late last year.

IPA’s chief executive told the audience that there is not one part of society or the economy where accountants do not have a positive impact.

“Accounting is so much more than audit and compliance; the accounting ecosystem places much greater emphasis on a much broader spectrum,” Mr Conway said.

He, however, cautioned that as a profession, accountants don’t do enough to sell the fundamental value they deliver to the economy.

“We must collectively also recognise the social value contribution of accountants. While there is a continued focus on technology and the rise of AI, we must not forget that AI cannot replace emotional intelligence; that human interaction is the point of difference for the profession.

“As a profession, we must own and respect the position of trust invested in us,” Mr Conway urged.

He called on professional accountancy organisations to step up, lead and embrace change, remain open-minded, train the next generation of accountants and ensure the profession is well resourced for the future challenges ahead.

“Simply put, there is too much at stake. Our trust position requires us all to step up,” said Mr Conway.