Will Big Four mean Big Fail? Chris Middleton reports on a sector shakedown predicted at a major policy conference.
One of the Big Four accounting, auditing, and professional services firms will fail by 2025. That was the prediction from Shamus Rae, CEO of technology consultancy Engine B.
Speaking at a Westminster eForum conference in London on the UK’s artificial intelligence (AI) sector, Rae said that a “Kodak moment” is coming to the services sector, driven by the influx of AI, automation, and digitisation.
As a result, he forecast that one of the Big Four would “go bust” between 2023 and 2025 – a “too big to fail” moment to echo the collapse of Lehman Brothers in the 2008-09 recession.
The issue is not that such companies are failing to invest in new technologies and data scientists, but that they can’t see that the underlying market will be transformed by AI and other so-called Industry 4.0 technologies.
He told delegates, “I was with a big organisation yesterday, one who all of you would know. And they’ve got some great data scientists, but they can’t think about the business model changing. So they’re looking for use cases to optimise the business model as it is today.
“Big organisations are going to have lots of Kodak moments. […] One of the Big Four will go bust, either in 2023 or 2025, depending on the forecast model you use. That’s a ‘too big to fail’ […] but it’s visible in the numbers, the margins are going down.”
While Rae, whose business focuses on encouraging the adoption of AI, automation, and digitisation in professional markets, could be seen as having a vested interest in pushing this message, the trend he identified was acknowledged by the World Economic Forum in its 2018 report on the future of jobs.
That report warned of a bloodbath of once-safe professional careers that would see 75 million jobs lost worldwide to robotics, AI, and automation, particularly in areas such as banking, financial advice, auditing, accounting, and legal services – sectors that are already being transformed by digital challengers and specialist startups, especially in banking and payment services.
In their place would come 133 million new roles, said the WEF, with a focus on data science, analytics, and working with the technologies themselves: a net gain of 58 million jobs to the world economy.
- The Westminster eForum attracted delegates from government, academia, technology, and business to an event that explored the UK’s AI policy priorities a year on from the AI Sector Deal and publication of the Hall & Pesenti review on Growing the Artificial Intelligence Industry in the UK.
- The original ‘Kodak moment’ was an advertising slogan about capturing memories on film. However, after selling 90 percent of all US photographic films in the mid-1970s and owning 85 percent of the camera market, photography giant Kodak filed for bankruptcy in 2012, having been slow to make the transition to digital imaging – despite having been a pioneer of the technology. A new ‘Kodak moment’ was born. It emerged later as a smaller digital imaging specialist.