The Disruption of Cognitive Computing

This is the second of a three-part post on the connection between Artificial Intelligence (AI) and Knowledge Management (KM). In this post I examine those industries that will or are soon to be disrupted by AI and KM, specifically in the form of Cognitive Computing.

Before we look ahead, let’s take a look back. During the time I first became involved in AI (late 80’s), its hype and promise at that time became too much to live up to (a typical phenomenon in software - see Hype Cycle) and its promise faded into the background. Fast forward to 2010 and AI is beginning to become the “next big thing”. AI had already made its presence felt in the automobile industry (robotics), as well as with decision making systems in medicine, logistics, and manufacturing (expert systems and neural networks). Now AI in the form of Cognitive Computing is making its mark on several industries. In a recent CB Insights Newsletter, it was stated that the US Bureau of Labor Statistics indicates that 10.5 million jobs are at risk of automation. Due to the rapid adoption and application of better hardware processing capabilities which facilitate artificial intelligence algorithms use on big data this is leading the change in blue and white collar jobs.

At a recent Harvard University commencement address, Facebook Chief Executive Mark Zuckerberg stated “Our generation will have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks."

Bill Gates, the founder of Microsoft and Chairman of the Bill and Melinda Gates Foundation in a recent MarketWatch story had this to say “In that movie, old Benjamin Braddock (Dustin Hoffman) was given this very famous piece of advice: 'I just want to say one word to you. Just one word …Plastics.'  And today? That word would likely be 'robots,' and 'artificial intelligence' would have a huge impact."

Although there are many industries where Cognitive Computing will disrupt the way business is conducted including the economics around job loss and future job creation, I have chosen to look at three industries; Legal Services, the Automotive Industry, and Healthcare.

Legal Services

Knowledge Management (KM) is becoming more prevalent within law firms as well as legal departments as the practice of KM has become more mature. AI technologies are also making its way into the practice of law. Ability to reuse internally developed knowledge assets such as precedents, letters, research findings, and case history information is vital to a law firm’s success. Paralegals currently play a critical role in assisting attorneys with discovery. With the use of AI systems attorneys will be able to “mine” more accurately and efficiently the large volumes of documents (i.e., precedents, research findings, and case history information) located in various repositories to aid in decision making and successful client outcomes. This ability will limit the use of paralegals and attorneys currently needed to perform these tasks.

Cognitive computing will enable computers to learn how to complete tasks traditionally done by humans. The focus of cognitive computing is to look for patterns in data, carrying out tests to evaluate the data and finding results. This will provide lawyers with similar capabilities as it provides doctors; an in-depth look into the data that will provide insights that cannot be provided otherwise. According to a 2015 Altman Weil Law Firms in Transition survey 35% of law firm leaders indicate cognitive computing will replace 1st year associates in the next ten (10) years. While 20% of law firm leaders indicate cognitive computing will replace 2nd and 3rd year attorneys as well. In addition, 50% of law firm leaders indicate cognitive computing will replace paralegals altogether. Cognitive computing capability to mine big data is the essential reason lower level research jobs will be replaced by computers. This situation is not just limited to the legal profession.

Automotive Industry

Autonomous Vehicles and Vehicle Insurance

Autonomous vehicles, also known as a driverless car, robot car (here we go with robots again!), and self-driving car can guide themselves without human intervention. This kind of vehicle is paving the way for future cognitive systems where computers take over the art of driving. Autonomous Vehicles are positioned to disrupt the insurance industry. Let’s take a look at what coverages are a part of the typical vehicle insurance policy.

Vehicle insurance typically addresses six coverages. These coverages include:

• Bodily Injury Liability, which typically applies to injuries that you, the designated driver or policyholder, cause to someone else;
• Medical Payments or Personal Injury Protection (PIP), which covers the treatment of injuries to the driver and passengers of the policyholder's vehicle;
• Property Damage Liability, which covers damage you (or someone driving the car with your permission) may cause to someone else's property;
• Collision, which covers damage to your car resulting from a collision with another car, object or and even potholes;
• Comprehensive, which covers you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, etc.;

Uninsured and Underinsured Motorist Coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. The way these coverages are applied (or not) to a vehicle policy will be disrupted by the use of autonomous vehicles.

According to a 2016 Forbes article by Jeff McMahon about 90 percent of car accidents are caused by human error. However, it is estimated that autonomous vehicles will significantly reduce the number of accidents. This will significantly disrupt the insurance revenue model, affecting all six types of coverage identified above. When the risk of accidents drops, the demand for insurance will potentially drop as well (this will not happen unless the states no longer require insurance that covers accidents). So, there will be no doubt that auto insurance companies will change the type of coverage and the language affecting the policies.

Some Unintended Side Effects?

The autonomous vehicle with its multiple sensors has the potential to eliminate accidents due to distractions and drunk driving. This will disrupt the vehicle repair industry by largely eliminating crashes so collision repair shops will lose a huge portion of their business. Indirectly, the decreased demand for new auto parts will hurt vehicle parts manufacturers. According to the U.S. Department of Transportation in 2010 approximately 24 million vehicles were damaged in accidents, which had an economic cost of $76 billion in property damages. The loss of this revenue will put a strain on these manufacturers.

(to be continued)

About the author:  

Dr. Anthony J. Rhem leads the KM Institute's "Information Architecture and ECM" training and certification program.  He serves as the President of A.J. Rhem & Associates, Inc., a privately held Information Systems Integration and Training firm located in Chicago, Illinois. Dr. Rhem is an Information Systems professional with over thirty (30) years of experience, a published author, and educator, presenting the application and theory of Software Engineering Methodologies, Knowledge Management, and Artificial Intelligence.

In addition Dr. Rhem serves as a Professor of Knowledge Management and Director of Research at The Knowledge Systems Institute - Master of Science Knowledge Management Program.