How can SMEs prepare for the rise of the robots?

The robot apocalypse

Robot workers and AI… read the papers or turn on the news and its all doom and gloom for the masses.

Perhaps one day a robot will be able to smile, converse, think and empathise in a way that makes it indistinguishable from a human.

The robot apocalypse is coming, but rather than firing nukes Skynet will be firing staff. Or rather the wealthy elites will be doing the firing, as they’ll be the robot masters.

But what about small and medium businesses?

Well, if a hard working entrepreneur can afford the latest in robots and AI tech, then great. Mega profits lie ahead. The reality, however, is that a small number of large businesses will develop or acquire the latest and best technology and use it to improve their services and drive down prices. They won’t licence the tech and SMEs won’t have the resources or know how to develop their own. The large businesses will be able to expand into new markets, niches and segments at will due to the low costs from their new tech. They will then beat SMEs at their own game and drive them out of their business.

Sounds far fetched?

When the likes of Uber automate their cars, how will independent minicab companies compete?

When KPMG or Xero refine their tech and improve it such that they can offer prices at the same rate as the high street, why would businesses choose smaller accounting firms?

The robot apocalypse won’t just put workers out of jobs, it’ll put many SMEs out of business. But, there’s always a but. Businesses that focus on a level of service that is hard to replace with machines can still prosper, and will be able to offer something that the large businesses can’t.

For example, a personal service and a smile could go a long way. In the near future, advice that relies on instinct and experience and not just an algorithm will also be a winning formula. But in the long term, as machines get more and more data they’ll be able to analyse more and more complex situations and to use their “judgement”.

What can be done

SMEs need to take action now to break down their business into a set of distinct processes and figure out can be replaced by robots or AI in the future. Then focus on the areas that will be hardest to replace, the core features and benefits that will give them the best chance of survival.

The processes that are at threat can then be delegated or outsourced, freeing up the core workers to do what they do best.

Then, when the future arrives and the robots or AI tech is unattainable or prohibitively expensive, SMEs will stand a chance, not just to survive, but also to thrive.

By Mohammed Haque

Mohammed is a chartered accountant (ICAEW) with many years of experience in dealing with complex audit, accounting and tax matters.

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