SAP Strategy Brave new world of artificial intelligence

Smart machines and digitalization will boost rather than cut employment — but people must get used to constant retraining to keep pace with change, the development chief of German software giant SAP tells Handelsblatt.
Quelle: dpa
Bernd Leukert, the head of development at German business software giant SAP, wants to promote AI.
(Source: dpa)

People are too negative about digitalization and artificial intelligence and should embrace new technologies as job creators rather than job killers, Bernd Leukert, the head of development at German business software giant SAP told Handelsblatt at the Davos World Economic Forum last week.

Mr. Leukert, 49, who has worked at SAP since 1994 and joined the management board in 2014, said the German education system, the government and firms weren’t doing enough to prepare people for a future in which there will be a constant need for new job training.

“I think there’s there’s too much talk of negative scenarios in the discussion about digitalization and new technologies,” he said.

Mr. Leukert, who has global responsibility for development and delivery of all products across SAP’s product portfolio, added: “Even though intelligent systems can increasingly take over standard tasks, new business areas and job profiles are being created that offer new opportunities for employment.”

“On aggregate, digitalization doesn’t destroy jobs. It changes the job profiles and the training, and there’s a shift in skills. That’s why it requires that everyone is prepared to engage in permanent learning.”

Mr. Leukert said the world of work was changing so fast that research showed that university graduates can only use 50 to 60 percent of their university-obtained knowledge during the first five years of employment. The percentage was likely to be lower for people in the skilled crafts and trades sector. “So we have to keep on training people further,” he said.

 

Neuronal networks and algorithms have in some cases been around for several decades. But the added value for industry is only created by companies being able to build AI into their processes and to thereby increase their productivity Bernd Leukert, SAP

That’s not up to any one group, it’s the responsibility of government, business, the education system as well as employees and trade unions, he said.

“Everyone has to sit down around the same table. At the moment I have the impression that everyone’s relying on everyone else to do it. And that’s why there’s not nearly enough attention on this issue.”

For its part, SAP was investing in so-called Massive Open Online Courses made available free of charge to universities and schools, said Mr. Leukert. But the offer wasn’t being taken up enough. “That is why we need a change of awareness, across the whole of society, that things won’t work out unless there’s permanent learning.”

Thanks to connectivity, artificial intelligence was the main big force behind digitalization, said Mr. Leukert. He is also a member of the supervisory board of the German Research Center for Artificial Intelligence and belongs to a strategy committee for Plattform Industrie 4.0, a forum aimed at developing Germany’s leading position in industrial manufacturing by promoting a fourth industrial revolution — the use of automation and data exchange to optimize manufacturing and create so-called “smart factories.”

“Neuronal networks and algorithms have in some cases been around for several decades. But the added value for industry is only created by companies being able to build AI into their processes and to thereby increase their productivity,” he said.

There were still some misgivings in Germany about artificial intelligence but these were for the most part confined to regulatory matters, he said.

“One banker recently told me that he regarded data protection and security as an essential asset of his bank that he must never put at risk. In some cases he’s even forbidden to enrich personal data with the help of artificial intelligence and to store it in the cloud.”

“Do you really think that a computing center run by a bank itself is fundamentally safer and provides better data protection than a computing center run by a professional cloud operator? The latter spends all its day making sure that its sticks to the European directive on data protection. We must boost public and business confidence in artificial intelligence and connectedness.”

A simple way to achieve that is simply to use artificial intelligence, he said.

“One example: in Britain in early November 20,000 bank accounts were emptied overnight in a cyber attack,” he said. “If this bank had integrated artificial intelligence in its security concept, that could have been prevented. A data-based system learns what account movements are normal in the daytime or at night and raises the alarm if there is a conspicuously high number of transactions. AI can protect. And not just that. It can make work easier.”

SAP is pinning its future on cloud computing services in a departure from decades of physically installing software at its clients. It signed an agreement with German car parts maker Robert Bosch last year to hook up all kinds of products to the internet.

SAP will release its 2016 results today. Its third-quarter results were above expectations with third-quarter operating profit, excluding special items, up 1 percent at €1.64 billion, or $1.76 billion.

SAP said in September it expected full-year operating profit to be between €6.5 billion and €6.7 billion — up from a previous forecast for €6.4 billion to €6.7 billion.

 

 

Sven Afhüppe is the editor in chief of Handelsblatt. Kirsten Ludowig is deputy editor of Handelsblatt's companies and markets section, specializing in the trade sector. To contact the authors: [email protected] and [email protected]