The IBM supercomputer known as “Watson” is best known for its victory on Jeopardy, but its creators have much bigger plans for it: Citigroup has just announced that it has hired the computer, in what the Wall Street Journal refers to as “the beginning of the end of human employment at banks.”
Watson is already on the job in the health care industry. According to Bloomberg, WellPoint Inc. and Seton Health Family are already finding a use for its skills at “understanding and processing natural language, consulting vast volumes of unstructured information, and accurately answering questions with humanlike cognition.” IBM thinks finance is a good fit for these skills as well. The company is
confident that with a little training, the quiz-show star that can read and understand 200 million pages in three seconds can make money for IBM by helping financial firms identify risks, rewards and customer wants mere human experts may overlook.
This is obviously big news in the tech world, but there are broad social implications as well. With the rise (and fall) of the “Occupy” movement last year, income inequality has emerged as one of the hottest new topics of the left-wing chattering classes. Yet for all the discussion, the political conversation has been largely backward looking. In the last generation white collar employees and people with college educations saw rising wages while blue collar and unskilled occupations lost ground. In large part, this was because automation and global competition primarily affected demand for low skilled blue collar work and manufacturing jobs, leaving their white-collar counterparts relatively untouched.
Systems like Watson threaten to change all that. The next wave may even hit white collar occupations with the same mix of outsourcing and automation that has pushed blue-collar wages downward. Citigroup’s hire is likely to be only the tip of the iceberg.