How can automation affect the job market?
When AI has a greater impact on automation, it is directly reflected in labor cost savings and raising productivity, according to a report published by Goldman Sachs in late March 2023.
There is still a divided opinion and skepticism among the wider population on the topic, but it is inevitable that recent discoveries in artificial intelligence have broken the barrier in communication between machines and humans, and that certain software is capable of generating content that is essentially very similar to human creation.
All of this progress, as stated in the report, can have a major macroeconomic impact.
If generative AI delivers on its promised capabilities, the labor market could face significant disruption. Using data on occupational tasks in both the US and Europe, we find that roughly two-thirds of current jobs are exposed to some degree of AI automation, and that generative AI could substitute up to one-fourth of current work.
Not only that, but according to their forecasts, AI can automate up to 300 million different full-time positions. If we look at it in the context of the US, that’s about 2/3 of the positions that can underlie automation to some extent, on average 25-50%.
This is especially true for the following jobs:
- 46% Administration
- 44% Legal
- 37% Architecture and engineering
- 36% Social sciences
- 35% Business and finance
- 33% Social service
- 32% Management
- 31% Sales
- 25% All Industries
Again, when it comes to automation, it’s not about laying off the human workforce; it’s about creating new jobs. In the broader picture, introducing technological innovations into the work environment leads to growth in the employment rate.
Moreover, in this context, we can also talk about a possible productivity boom, which will undoubtedly change our work habits in a relatively short period of time. In particular, the figures mentioned are a 7% increase in annual GDP, thanks to the wider application of artificial intelligence.
Of course, this depends on the extent to which AI will be able to automate jobs of varying levels of complexity. The report also states that AI will not be able to automate tasks related to outdoor activities or that require physical work.
Technological innovations raising employment rates
In today’s discourse, when we talk about AI, we are actually talking about generative artificial intelligence, significantly different from previous machine learning models. The main competitors in this field are ChatGPT, DALL-E and LaMDA.
The main differences between them are:
- Their generalized rather than specialized use cases;
- Their ability to generate novel, human-like output rather than merely describe or interpret existing information;
- Their approachable interfaces that both understand and respond with natural language, images, audio, and video.
The first two characteristics refer to the diversity and complexity of the tasks they can perform, while the third item concerns the speed of adoption of this technology. Let’s remember that ChatGPT has gained more than 1 million users worldwide in less than a week, which is faster than any other company so far.
In a social context, it’s the first time that public interest followed the development of technology to such an extent as it is right now. Artificial intelligence is not only discussed in professional circles, but such conversations can be heard both in educational institutions and in public transport.
This further testifies to the importance of the change we’re living in today, similar to, especially when it comes to investment, software investments in the 1990s, when the internet as we know it was created.
Finally, it should be emphasized that most jobs and industries will only be partially exposed to AI, that is, it will be complemented rather than replaced by this technology. The first to adopt this technology in their work environment will also be the first to enjoy productivity growth and will be pioneers in new positions that are yet to be created.
In support of this, we’ll remind you that 60% of today’s workforce is in positions that didn’t exist in the 1940s, which means that more than 85% of the growth in employment rates in the last 80 years has been made possible thanks to technological innovations that have created new jobs.