In a new report, Goldman Sachs posits that many jobs could be lost as a result of AI and broad automation: “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. Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300mn full-time jobs to automation”.
When things are automated, on average, jobs are lost at scale, even though a smaller number of jobs are created within a close category of those jobs. (In the broad industry, more jobs could actually be created over time.)
You may dismiss it. But note this: that redesign has already started. For years, I have not seen the type of job losses we’re experiencing right now in the technology industry in the United States. From Facebook* to Electronic Arts, announcements of job cuts have become a constant.
Unlike during the great recession when losses came big and then stopped, this new redesign is totally different: companies are constantly cutting even when they’re making more money. In short, some startups raise big money, then they announce job cuts. How is that possible? They possibly raised money to automate many things.
But it is not all bad; people with great modern skills will thrive. Prompt engineers, new species of engineers who can “talk” and “whisper” to AI chatbots, making them better, are going to $335,000 per year on salaries. Indeed, we will see new dimensions of opportunities even as the old ones are being displaced.
The recent emergence of generative artificial intelligence (AI) raises whether we are on the brink of a rapid acceleration in task automation that will drive labor cost savings and raise productivity. Despite significant uncertainty around the potential of generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic effects.
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. Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300mn full-time jobs to automation
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Comment 1: While technology can certainly impact the job market, it is not the sole factor driving workforce restructuring. It is important to consider various factors and opportunities for upskilling and reskilling in order to navigate the changing nature of work.
The rise of AI is disruptive in a different way and the market may not recover from this disruption. However, new roles such as data analysts, machine learning engineers, and AI ethicists will emerge or continue to be in vogue.
My Response: Absolutely, new vistas will emerge. The world is a dynamic system.
Comment 1A: Not so. With Microsoft’s Copilot you can highlight entire spreadsheets and/or databases and simply “ask” it to do whatever you want and it’ll do it. Need to run a regression? Just ask it in plain language and boom there it is….no need for a data analyst or analytics “expert” – the system is the expert. Same goes for software engineers – one intelligent individual trained on the language of AI could replace an entire team of software engineers. The reality of AI capabilities are simply amazing, and we are at its infancy. I like your optimism but it’s not reality.
My Response: why will people go to school or learn anything when you can command machines to do anything. An interesting age awaits.
Comment 2: Prof. thanks for the insights you always provide. Yes AI is causing and will cause significant disruptions and job losses. But it will be more of a reclassification of income classes, (where people in lower upper class maybe pushed to a lower class, and vice versa ) as against permanent job losses. One of the fundamental human rights of human beings is the right to earn a living. AI cannot and will not deny humanity that right essentially because the future of work is and will continue to be driven by people and not technology or AI. Notwithstanding, the need to upskill cannot be overemphasized.
Thanks Prof.
My Response: sure. There will be work. But note this – if you track the revenue of Microsoft and Zenith Bank, you will notice one thing: the revenue growth is faster than staff growth. Zenith Bank got close to N1 trillion revenue last year even though its staff strength has remained flat. There will always be work. The issue is this: will Ndubuisi and Obichukwu be ready for those new jobs? AI will create new types of jobs but not everyone will qualify.
More so, it is easier for a rich investor to compound more wealth than a worker since AI can make it easier to create products and services. Bill Gates is donating billions but he is not meeting up with the rate he is creating more wealth. That pattern cuts across domains. While new people can join, those already there may not drop. Tech accelerates inequalities because it can scale wealth faster and only those with means are usually at the production phase.
