In October, the National Science and Technology Council (NSTC), the Office of Science and Technology Policy (OSTP), and the U.S. president issued a joint report titled “Preparing For The Future of Artificial Intelligence.” If you were waiting for a sign to prove that the Fourth Industrial Revolution had begun, a policy statement from the White House on thinking robots definitively fits the bill.

The report consists of a state of AI summary and lays out potential applications. It then delves into questions everyone has about what AI will do to society and public policy. It concludes with a strategic plan for federally-funded R&D for practical AI, based on actual request-for-information (RFI) proposals. AI is already working to augment human intelligence and the ramifications are being felt in every industry.

As discussed in a previous article, augmented reality can have multiple meanings. One sense is the technological term referring to software/hardware combinations, like Pokemon Go and smartphone cameras, or the next generation of holographic glasses. They augment reality by layering generated content on top of camera feeds or screen displays of the real world.

A Break With the Past

At a deeper level, augmented reality is the world around us today, which has broken radically from the past. Consider for a moment that the top 10 most in-demand jobs in 2010 were based on technologies that didn’t even exist a few years earlier. Children can’t say what they want to be when they grow up because the world we know will no longer exist by then.

Since then, scientists have created the first self-replicating synthetic organism — a form of bacteria that is truly an engineered life form. Meanwhile, taxis are driving themselves in Singapore and Asgardia has registered with the United Nations as the first nation in space, with a population nearly the size of Luxembourg. Augmented reality is the new normal.

AI’s Complementary Skills

The White House report makes it clear that AI and this emerging augmented reality has two sides. While it can introduce capabilities that were unimagined even a few years ago, it does so at the expense of fossilized economic organisations and out-dated concepts.

With regard to the augmentation of human intelligence by AI, the report stated, “This will likely increase productivity and create wealth, but it may also affect particular types of jobs in different ways, reducing demand for certain skills that can be automated while increasing demand for other skills that are complementary to AI.” Consultancy is one of those complementary skills, but it there is a compelling need to it be reconfigured for an augmented world.

The $5-7 Billion Dollar Question

Exactly how augmentation fragments traditional structures can be observed with exceptional clarity in the disruption of the service and knowledge industry. Research by McKinsey projects that “automation of knowledge work” is the second most disruptive technology at work today, worth $5 to 7 billion in impact from right now through 2025.

Recognition of that impact on their own business drove McKinsey to introduce McKinsey Solutions. This radical new approach to consulting generates customized AI-based analytical tools that can be embedded at a client site. Instead of the traditional problem-centered and project-based model, the new world of consultancy is built on adaptive human intelligence augmented by machine learning and data visualizations.

Connecting the Dots

In short, the latest advances in digital super tools, powered by AI, are opening up an exciting expansionary phase for the service and knowledge Industry. The White House report doesn’t address this point directly, but the message is evident if you connect the dots.

The report states that “a sufficiently intelligent AI could be tasked with developing even better, more intelligent systems, and that these in turn could be used to create systems with yet greater intelligence, and so on, leading in principle to an ‘intelligence explosion’ or ‘singularity’ in which machines quickly race far ahead of humans in intelligence.” Although some industry leaders have cautioned about a dystopian future, the report offers that “many researchers sees instead the development of intelligent systems that work well as helpers, assistants, trainers, and teammates of humans…”

At the same time, analysis by the White House Council of Economic Advisors (CEA) suggests that the negative effect of automation will be greatest on lower-wage jobs. There is a risk that AI-driven automation will increase the wage gap between less-educated and more-educated workers, potentially increasing economic inequality.

Containing the Future

The most reasonable conclusion to draw is that government will certainly play an important role in the advancement of AI through research and development, but it must also channel resources to the growth of a skilled, diverse workforce that can thrive in this augmented world.

There’s one more point that the White House report is silent on and it deserves discussion. It’s very likely that AI and the economic powerhouses derived from it will grow the GDP. That’s not the main issue that should concern us, though. There are far greater challenges that will emerge as the world reset itself. To address and (hopefully) solve these challenges, the next generation will require better preparation starting now.

Even if the current world population sees a rise in living standards in the short run, the entire educational system as it stands today has to be re-calibrated and refreshed to contain the coming “intelligence explosion.” Policy makers must understand that protectionism cannot help any of us fill in the widening knowledge gap. Only the collective strength of greater openness, predictive resource allocation and trans-global collaboration will be able to control the course of this rapidly expanding augmented reality.