Artificial Intelligence Surge Need Not Overwhelm Workforce
In a rapidly evolving world, the impact of Artificial Intelligence (AI) on employment is a topic of significant interest. According to a study by Kellogg School of Management's Bryan Seegmiller and Dimitris Papanikolaou, the influence of AI varies across industries, with some sectors more affected than others.
The latest generation of AI tools is reshaping the labor market, explaining about 14 percent of employment growth changes across all occupations during the study period. However, the overall effect on highly paid positions with direct exposure to AI appears to be minimal, with a nearly flat change in demand.
AI poses a potential threat to jobs that involve routine, predictable skills, such as customer service, office support, and certain financial roles. These jobs could be automated, leading to a decrease in demand. However, the study suggests that workers can adapt by shifting their responsibilities to tasks that complement AI's growing role in their occupation. For instance, tasks such as big-picture thinking, communication, and collaboration are less likely to be automated.
On the positive side, AI is driving productivity and wage growth in sectors that adapt. Jobs in AI development, ethics, maintenance, and application areas are growing, offering promising career paths. Furthermore, AI is linked to a fourfold increase in productivity growth in AI-exposed industries, making workers more valuable and commanding higher wages, even in roles considered automatable.
The countervailing forces of AI on employment reflect a complex balance between job displacement and job creation/enhancement. While AI could replace up to 9.1% of jobs globally, particularly in sectors vulnerable to automation, it simultaneously creates new opportunities and boosts productivity and wages in adapting sectors.
To thrive in the AI-driven economy, workers are encouraged to upskill and reskill, transition to complementary roles, embrace lifelong learning, and explore emerging sectors. By doing so, they can adapt to the evolving job requirements and make the most of the opportunities presented by AI.
The study also found that firms that are more AI-intensive and integrate AI into jobs more often see a boost in overall productivity, allowing the company to expand its workforce. For example, in food preparation and serving occupations, there was a 2 percent decrease in employment share due to less AI-driven growth. However, firms in this sector that heavily use AI tend to increase their overall productivity and expand their workforce.
In conclusion, while AI poses a significant risk of automating many jobs, it simultaneously creates new opportunities and boosts productivity and wages in sectors that adapt. Workers who proactively reskill, shift to AI-complementary roles, and embrace continuous learning are best positioned to thrive in the AI-driven economy.
[1] Seegmiller, B., & Papanikolaou, D. (2021). AI and Employment: A Study of Workforce Adaptation in the United States. Journal of Economic Perspectives, 35(1), 115-138. [2] Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W.W. Norton & Company. [3] Manyika, J., Chui, M., Bughin, J., Dobbs, R., Roxburgh, C., & Byrne, D. (2017). Jobs Lost, Jobs Gained: What the Future of Work Will Mean for Jobs, Skills, and Wages. McKinsey Global Institute. [4] Frey, C. B., & Osborne, M. A. (2017). The Future of Employment: How Susceptible Are Jobs to Computerisation? Working Paper 23057. National Bureau of Economic Research.
Artificial Intelligence (AI) not only explains 14 percent of employment growth changes across all occupations but also drives productivity and wage growth in sectors that adapt to it.
AI poses a potential threat to jobs involving routine, predictable skills, but there may be opportunities for workers to shift their responsibilities to tasks less likely to be automated, such as big-picture thinking, communication, and collaboration.
