Telcos Look to AI to Reduce Costs

One thing about ecosystems and value chains is important: one segment's cost is another segment's revenue. That happens at the firm level as well.

Artificial intelligence, many fear, will eliminate and reshape many, if not most, jobs. Not to worry, optimists say, new jobs will be created. While that is true, the social consequences might be anything but benign.

Telecom service providers, for example, now expect that artificial intelligence will allow companies to reduce headcount, boosting productivity but at the cost of jobs. That always is the challenge with higher productivity. The ability to produce more for less drives economic growth, but has uneven implications for workers.

Consider the changes in job markets over the last six or seven decades, as the United States moved from an industrial to information-driven economy.

The labor force participation rate of prime-age men--25 to 54 years old--steadily decreased since 1950.

To be sure, major economic shifts do eliminate some jobs and create others. The social problems happen because the people who lose old jobs are quite often not the people gaining the new jobs.

source: Bureau of Labor Statistics

The point is that smaller workforces have been a service provider objective for decades. AI is going to push the trend.


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