IBM CEO Advocates Automation, Continues Workforce Expansion

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The Chief Executive Officer (CEO) of IBM, who faced criticism for suggesting the automation of many back-office tasks, maintains that the technology will create more jobs than it eliminates. Speaking at Fortune’s CEO Initiative conference in Washington, D.C. on Tuesday, IBM CEO Arvind Krishna dismissed the idea that increased productivity leads to job losses.

“People confuse productivity with job displacement,” Krishna stated during the event.
He highlighted that, as IBM phased out a few hundred back-office HR positions over three to four years, it simultaneously added roles in software engineering and sales. “The increase was around 8,000,” Krishna noted. “The decrease was approximately 800.”
Krishna clarified that employees were not let go due to this transition; rather, specific roles were not replaced when they became available.
However, he acknowledged that “repetitive white-collar jobs” would be impacted by the technology, reiterating a point he had previously made.

“The first thing you can automate is a repetitive, white-collar job,” he emphasized on Tuesday. While AI might handle 10% to 20% of “lower-level tasks,” he predicted it wouldn’t completely replace a person’s job, as no one’s job solely comprises such tasks. He anticipates his programmers becoming 30% more productive with the technology. “I don’t intend to eliminate a single one,” he assured. “I’ll hire more.”

This trend benefits developed countries, where Krishna anticipates a continued labor shortage in the years ahead. During the CEO Initiative interview, he contrasted the scarcity of the labor market in the developed world, necessitating enhanced productivity, with the abundance of available workers in the developing world. He previously emphasized the importance of successful AI implementation in maintaining the current quality of life the developing world enjoys.
“Population growth is stagnant or, at worst, declining,” Krishna previously remarked. “So, you need to increase productivity; otherwise, the quality of life will diminish. And AI is the only solution we have.”

The improved productivity will enable companies like IBM to hire more individuals, as it will allow them to generate more products and services that will need to be brought to the market. He cited the example of the emergence of the smartphone, which unexpectedly created a thriving market for software designers. “In 1995, no one expected there to be five million web designers, but there are,” Krishna pointed out. Cristiano Amon, the CEO of Qualcomm, mentioned Uber as another example, which created an entirely new use for the smartphone that hadn’t been previously considered but eventually became pervasive in consumers’ lives.

At IBM, AI has already become an integral part of some of the company’s most critical work. According to Krishna, approximately three-quarters of chip design at the company is currently facilitated by AI. In July, Reuters reported that IBM was contemplating utilizing its chips to power its cloud computing service to reduce costs.
‘China is advanced in AI, let’s not have any illusions about that’

The discussion then turned to another contentious topic in AI: the ongoing competition with China.
“China is advanced in AI,” Krishna asserted. “Let’s not have any illusions about that.”
While Krishna maintained that the U.S. is at the forefront of AI, he admitted that the extent of this lead is debatable, stating, “Is the U.S. six months ahead or two years ahead?”

China possesses some advantages over the U.S., particularly a government comfortable with issuing directives on AI development to support its objectives. Krishna noted that China has the “capability to utilize large private datasets,” a luxury not available to U.S. firms due to privacy and other regulations. The Chinese government is also more open to exploring AI applications that the U.S. might consider undemocratic. These factors will result in a fragmentation of AI applications. “As the tech war intensifies, there will be a growing divergence in development between the two nations,” Krishna predicted.
Amon, while acknowledging that the U.S. remains the global leader in chip design, suggested that the U.S. could emerge as the dominant force in AI and all related industries required to support its advancement.

“The most crucial step we can take is to ensure that the U.S. remains the top destination to attract talent because there’s a finite number of individuals capable of contributing to the development of AI and related technologies,” Amon explained.
Krishna reminded the audience that the U.S. has been the birthplace of AI technology. “[The fact] that generative AI emerged from institutions like Stanford, MIT, Google, and Facebook is something that we should all take pride in,” he concluded.