A very interesting article shared by one of my friends two days ago captured my attention 100%. The article discusses how AI might (will?) change different business models, and one chapter addresses time-based businesses.
Time-based businesses abound in the service economy, and if some of them will survive until they are physically automated (washing windows, painting ceilings, cooking), many in the content, creativity, and information economy (lawyers, designers, educators, and yes, innovation consultants) will be disrupted overnight–admittedly, many are already and don't know it.
The main output of such disruption is that 80% of the labor in the information and service economy is low-level expertise or some expertise that can readily be formatted because it's mostly standardized. Why do you think big-name consulting companies employ many juniors to produce market research, competition benchmarks, IP landscape analysis, etc? If they only require a modicum of competence, they are a huge time-sink. And that's what AI can already do. Digest this type of work, mimic fairly well the competence, and crunch the time required to a factor x100, x1000, or more: AI, the infinite army of interns.
This is where time-based businesses are destroyed.
The upside? 20% of these businesses that can't be touched (at least for a few years) are where real value-added is produced with intuition and flair from years and decades of experience.
(...) the ultimate SOURCE of the differentiating value delivered to a client: It is less “time” and it is more “experience.” (...) the differentiators that matter are one’s years of experience, honed skills from formal education and practice, one’s taste and intuition, one’s creativity, one’s network of relationships, and even one’s proprietary data and algorithms honed through volume of past experiences. In such a world, time-based billing simply won’t work anymore unless the value derived from these services is also compressed by a multiple (unlikely). The classic time-based model of billing for lawyers, designers, consultants, freelancers etc is officially antiquated. So, how might the value be captured in a future where we no longer bill by the hour? Perhaps (...) we enter an era of results-based compensation that is far more objective and measured?
Excellent news for the seniors and veterans in these fields. Crushing news for the juniors as to how they will accrue the experience necessary to escape the "AI-zone" is quite unclear.
In any case, having recently discussed the very topic of never billing by the hour for the would-be consultants who follow my online training, I feel all the more vindicated.