Automation of American Business Processes to Expand Due to COVID 19

COVID 19 should dramatically push companies wishing to survive to automate whatever process they can.  Automation is the technique of making an apparatus, a process, or a system operate automatically and can further be defined as the creation and application of technology to monitor and control the production and delivery of products and services.[i]  Recent economic analysis of automation is often tied to “machine learning” or Artificial Intelligence and machine robotics.  Artificial intelligence is the study and design of intelligent agents where an intelligent agent is a system that perceives its environment and takes actions which maximizes its chances of success.[ii]  Artificial intelligence involves a machine mimicking “cognitive” functions that humans associate with other human minds, such as problem solving. Artificial Intelligence has been defined in a number of ways, including: systems that think like humans (e.g., cognitive architectures and neural networks); systems that act like humans (e.g., pass the Turing test via natural language processing; knowledge representation, automated reasoning, and learning);  systems that think rationally (e.g., logic solvers, inference, and optimization); and systems that act rationally (e.g., intelligent software agents and embodied robots that achieve goals via perception, planning, reasoning, learning, communicating, decision-making, and acting).[iii]

Robots and the field of robotics are often tied to the automation of the manufacturing industry and its production process.  A robot is defined as a machine capable of moving independently (as by walking or rolling on wheels) and performing complex actions (such as grasping and moving objects) that could be capable of independent thought but is primarily focused on repetitive tasks like work on an assembly line.[iv]  The use of robots is growing across the world. In 2013, there were an estimated 1.2 million robots in use and this number grew to 1.5 million in 2014 and is projected to increase to about 1.9 million in 2017.[v]  Japan has the largest number with 306,700, followed by North America (237,400), China (182,300), South Korea (175,600), and Germany (175,200).[vi] Overall, robotics is expected to rise from a $15 B industry sector now to $67 B by 2025.[vii]

The impact of robots on manufacturing may pale in comparison to how 3-D or Additive Printing impacts what used to be the heart of the American economy.  3-D Printing is a way for software to send design plans to specialty printers and have those devices make exact copies of those goods or products.[viii] The ability to print highly durable material impacts product manufacturing and delivery and dramatically reduce the cost and workers required for assembling products in a manufacturing setting.   

Automation is having a major impact on retail.  The growth in e-commerce matched by the evolution of robot technology are making major changes in the retail industry. The retail industry employs roughly 16 M Americans and nearly half of these retail workers are at risk of losing their jobs to robots and other automation technology.[ix] Retail Cashier will suffer the most job losses from this industry that covers one in ten American workers. As an example, Wendy’s recently purchased a 1000 kiosks that are replacing workers taking and processing food orders in their restaurants and the pay-off for this investment is only expected to take three years.

The financial services industry will also see major changes spurred on by automation and the advances of Artificial Intelligence.  McKinsey estimates the 25% of the current jobs in the American insurance market will be gone in 10 years.[x]  Insurance positions in operations and administrative support are especially likely to be consolidated or replaced but jobs in information technology and operations will see declines as well in the insurance industry.[xi]  However, new positions will be created as the insurance industry goes digital from a customer service standpoint and also benefits from the use of Artificial Intelligence for repetitive back-office jobs now performed by humans.[xii] The impact of automation on the insurance industry illustrates that “white collar” as well as “blue collar” jobs are at risk. 

Similar predictions of job losses and productivity increases are seen in the banking industry with the growth of digital banking and spread of 400,000 ATMs across the United States.[xiii]  The banking industry is leading the way in automation of back office functions.  As an example, JPMorgan Chase created a Contract Intelligence platform to analyze legal documents and extract important data points and clauses to replace the manual review of 12,000 annual commercial credit agreements normally requiring an estimated 360,000 hours  now done in seconds.[xiv]  Wells Fargo created a virtual assistance launched through a Facebook application to assist customers with resetting account user names and passwords.[xv]  Bank of America has seen their mobile banking customer base gain from 12 M in 2012 to 22 M in 2016 and they created a mobile banking virtual assistant, named Erica, to assist mobile banking customers with a range of operational and financial needs.[xvi]

Health care, a growing sector of the American economy, will of course be impacted by automation.  McKinsey estimates that about 36 % of the health care industry has the technical potential for automation but only 30% of a registered nurse’s daily activities could be automated, compared with 13 percent of a dental hygienist’s daily activities.[xvii]  Not all the industry news related to automation is bad for workers and customers.  Health care is a prime example.  Walter Reed Medical Center is using Artificial Intelligence to better predict medical complications and improve treatment of severe combat wounds, leading to better patient outcomes, faster healing, and lower costs.[xviii]  Data analytics tools are predicting complications to enable preventive treatment to reduce hospital-acquired infections at Johns Hopkins University.[xix]  The current transition to electronic health records, predictive analysis of health data may play a key role across many health domains like precision medicine and cancer research.[xx]

Artificial Intelligence is expected to dramatically transform the transportation industry.  Smart Traffic management applications are reducing wait times, energy use, and emissions by as much as 25 % in some places.[xxi]  Smart Traffic systems help cities leverage the type of responsive dispatching and routing used by ride-hailing services, and linking it with scheduling and tracking software for public transportation to provide just-in-time access to public transportation that can often be faster, cheaper and, in many cases, more accessible to the public.[xxii] AT&T’s network serves as the fiber backbone for the operation of Smart City applications across the U.S. where communities build a sensor network often located on utility poles or streetlights that monitor and provide public service, traffic, safety and utility monitoring services.

Again, COVID 19 is going to speed up the automation trend already underway.  The industrial marketing firm Thomas reports in a survey of more than 1,000 North American manufacturing and industrial suppliers to determine how they have been affected by the global pandemic as well as trends in the space that will continue to shape the industrial sector post-pandemic.[xxiii]  The survey finding shows that one in four U.S. manufacturers are considering expanding industrial automation due to COVID-19, and an additional 20% report they already have systems in place.[xxiv]



[iii] Stuart Russell and Peter Norvig, Artificial Intelligence: A Modern Approach (3rd Edition) (Essex, England: Pearson, 2009).


[v] Alison Sander and Meldon Wolfgang. “The Rise of Robotics.” The Boston Consulting Group, August 27, 2014.

[vi] RBC Global Asset Management, “Global Megatrends: Automation in Emerging Markets,” 2014.

[vii] Sander and Wolfgang.


[ix] “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation,” Capestone Capital Group, May 18, 2017.


[xi] Ibid.

[xii] Ibid.



[xv] Ibid.

[xvi] Ibid.



[xix] Ibid.

[xx] Ibid.

[xxi] Ibid.

[xxii] Ibid.


[xxiv] Ibid.