What is the Feeling Economy – and why is it set to boost the service sector?

Artificial Intelligence (AI) is not just science fiction anymore. It already permeates our daily lives, changing how we seek and use information, and taking over many of our tasks. Whenever we use the Google search engine, or ask Alexa a question, we are interacting with AI. How we live our lives, and how we work, are being profoundly transformed by AI.

Ironically, as AI is becoming more able to think, human intelligence (HI) is deemphasising thinking in favour of feeling and interpersonal relationships. The result is a “Feeling Economy,” in which AI and HI will collaborate closely - AI will do more of the thinking, and human intelligence will emphasise feeling.

Rise of the Feeling Economy

The distinction between biological beings and artificial beings illustrates that machines cannot experience emotions in a biological manner. We do not mean that machines cannot have or show emotions in a machine way. We have seen various applications of machines interacting with humans emotionally, such as chatbots for customer service, and conversational bots to mimic human conversations.

Replika, for instance, is a machine learning-based chatbot which provides emotional comfort to consumers by mimicking their styles of communication. After a couple of months’ training, the consumer often feels that the chatbot really understands every bit of their feeling (i.e. the machine seemingly demonstrates empathic capability). The machine learning approach that Replika uses does not understand the consumer’s emotions, but simply “replicates” the consumer’s way of communication.

The biology mostly limits machines today to the thinking intelligence realm. The continuing advancement of thinking AI, from analytical to intuitive, further limits any human advantage in thinking. Machines will not stop their development at analytical thinking. When machines are capable of intuitive thinking, human workers will have to move to feeling tasks, because biological-based intelligence is what will be left for them. Thus, thinking AI gives rise to the emergence of the Feeling Economy.

What is the Feeling Economy?

The Feeling Economy is an economy in which human employment and wages are more attributable to feeling tasks and jobs. Feeling/empathetic tasks are the “soft” aspects of a job, for example, communicating with people, establishing and maintaining relationships, and influencing others. Customer service is a prime example.

Doing these tasks well requires human workers to have good EQ and good soft, social, and people skills. Those people skills are not highly valued in the Thinking Economy, compared with hard skills. It is a “soft” service economy, compared with the “hard” service Thinking Economy (e.g. engineers), and service jobs emphasising those soft skills will be booming (e.g. marketers).

The Feeling Economy is characterised by humans doing the feeling tasks and machines doing the thinking tasks. This may upend the current social order. For example, groups that currently dominate in the Thinking Economy may find that their advantage declines in the Feeling Economy. Some traditionally less-advantaged people (e.g. ethnic minorities, women) may find that they are no longer disadvantaged in the Feeling Economy, and some previously disadvantaged groups may achieve a significantly higher status.

Renewed status for service?

The major move now will be for previously ‘unskilled’ thinking service workers to re-skill to become unskilled feeling service workers. The feeling intelligence involved in such unskilled feeling service can be simple and routine; and as we’ve already acknowledged, mechanical AI and analytical AI can easily do this kind of job, as long as appropriate emotional data are fed to the machines.

Upskilling to skilled feeling jobs, on the other hand, is a much more important path for human workers to remain competitive in the Feeling Economy. This is something that is already being acknowledged in most forward-thinking call and contact centres around the globe.

Up-skilling takes a longer time to realise, because from unskilled to skilled takes time and is a more difficult path, typically via formal education. It means that our educational system needs to change too, to shift away from STEM education to human-skill education. On the other hand we’re also likely to see a sudden surge in cross-skilling as a result of the Feeling Economy.

Computer and data scientists might be a good example. Being a purely computer and mathematical geek, for instance, would not be sufficient for the Feeling Economy. In the Thinking Economy, such communication skills are not valued as much as thinking, which has created many inter-organisational conflicts. In the Feeling Economy, having good soft skills is critical for the success of any project. It is for similar considerations that information management departments spin-off from computer science departments to train students to be able to master management skills as well as computer skills.

Unfortunately, in the Thinking Economy, the information management major often is derided as second-rate computer science, and is populated by those students who are not thinking intelligent enough for the computer science major. In the Feeling Economy, this bias toward thinking intelligence will change.

What characterises the Feeling Economy?

If we say that the Thinking Economy is the present, then the Feeling Economy is the emerging future. We are not totally there yet, but we are marching toward it. In the Feeling Economy, thinking AI does the thinking, and leaves feeling jobs to humans.

In the Feeling Economy, the previously considered ‘soft skills’ of the past is becoming more sought-after than we have ever known. This can only mean organisations placing an unprecedented focus on the value of people skills and service.

Roland T. Rust is Distinguished University Professor and David Bruce Smith Chair in Marketing at the University of Maryland.  Ming-Hui Huang is Distinguished Professor, Department of Information Management, National Taiwan University.  Their new book, The Feeling Economy: How Artificial Intelligence Is Creating the Era of Empathy (with Ming-Hui Huang, National Taiwan University) is published by Palgrave Macmillan, a division of Springer International Publishing, priced £22.99, $29.99, 24.99 € (Softcover).