Those 300m Jobs
Will they be replaced?
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Friends,
I went back to read the Goldman Sachs report to understand the rationale for the 300m jobs that would be displaced due to Generative AI. People keep banding around the number, but I wanted to get a bit deeper on the how and what. The report basically said this:
Generative AI has the potential to rapidly automate tasks, leading to people cost savings and increased productivity.
Two-thirds of current jobs in the US and Europe are exposed to some degree of AI automation, and generative AI could potentially substitute up to a quarter of current work.
Globally, generative AI could automate the equivalent of 300 million full-time jobs.
Historically, new jobs have been created to offset worker displacement from automation, and new occupations following technological innovations drive long-run employment growth.
The combination of labour cost savings, new job creation, and increased productivity for non-displaced workers could lead to a productivity boom and substantial economic growth.
The boost to global labour productivity could potentially increase annual global GDP by 7%.
The economic impact of AI depends on its capabilities and adoption timeline, but if generative AI lives up to its promise, it has enormous economic potential.
In the post-war era, technological advancements were synonymous with both job displacement and the creation of new employment prospects. However, a closer examination reveals a shifting trend, as the pace of worker displacement has outpaced the creation of fresh opportunities since the 1980s. This raises concerns about the potential negative impact of generative AI on labour demand in the near future, mirroring the effects witnessed with earlier information technology advancements. Nonetheless, amidst these concerns, there remains a silver lining: the positive influence on labour productivity growth. Basically, those 300M lost jobs will become new jobs.
I remember when the West was scared that all jobs were going to be outsourced to equally if not more skilled countries that paid lower wages. That was an initial race to the bottom, but with new technological enhancements, the shift happens again. And it’s not going to affect just some economies, it will affect us all
A PwC study offers reassurance. It suggests that any job losses in the short term will likely be offset in the long run by the creation of new employment opportunities, facilitated by the larger and wealthier economy fostered by these innovative technologies. PwC's findings dismiss the notion of widespread technological unemployment due to automation.
According to the World Economic Forum's "Future of Jobs Report 2023," the global landscape will witness a net 2% decrease in jobs. While this was a lower prediction, it also predicts a near replacement of jobs. The impact of AI goes beyond mere automation, as it empowers workers by automating repetitive and hazardous tasks such as data entry and assembly line manufacturing. It also reshapes job roles, enabling employees to focus on higher-value activities that necessitate human interaction. This transformation holds the potential to unleash creativity, strategic thinking, and entrepreneurial skills, benefitting both individuals and businesses. I like to think that this will lead to higher-order roles for all. Others believe that there will be a divide between classes.
These benefits of AI are not expected to be evenly distributed. To ensure widespread advantages and prevent an exacerbation of existing inequalities, it is imperative for businesses and governments to collaborate on large-scale reskilling and upskilling initiatives. Such endeavours will enable employees to adapt and prepare for the demands of new and future job markets.
In the near term, PwC's report, "Will robots really steal our jobs?," indicates that approximately 3% of jobs could be potentially automated by AI. The digitization acceleration prompted by the COVID-19 pandemic might expedite this trend. Looking further ahead, as AI progresses and gains greater autonomy, there is a projected risk of automation for 30% of jobs and 44% of workers with low educational attainment by the mid-2030s. For me, this pushes the onus on nation-states to push the education agenda further. But it’s not just school kids.
Recognizing the urgency, the World Economic Forum highlights that within the next five years, half of the global workforce will require upskilling or reskilling to adapt to emerging job requirements. The rapid pace of technological advancements necessitates innovative training models that equip employees with an AI-ready mindset. Upskilling should not be viewed as an expense but as an investment in the future of organizations.
Companies and individuals must invest in nurturing soft skills that are uniquely human and cannot be replicated by AI. In this ever-changing landscape, the value of qualities such as creativity, leadership, and emotional intelligence will only grow, playing a pivotal role in governing and managing the impact of AI.
While some hold a dystopian view of the future, evidence suggests that the positive social impact of AI will likely outweigh its consequences. However, to fully embrace the benefits of AI, society must prioritize high-quality and comprehensive education, coupled with multi-sector initiatives. Only through these concerted efforts can we effectively prepare ourselves for the future and capitalize on the potential of AI.
Stay Curious - and don’t forget to be amazing,
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