AI and employment: Echoes of the past or a new paradigm?

Recent article In a report published by the World Economic Forum (WEF), two economists from the Boston Consulting Group argued that AI’s impact on jobs will be similar to past technological revolutions: while there may be significant impacts on certain individuals who may lose their jobs to AI, they believe that overall more jobs will be created than lost.

This is certainly a possible outcome, but at the same time it is common sense and may well be plain wrong, because the impact of AI on work is likely to be far more disruptive than any previous technological revolution: AI will be used to outsource cognitive tasks, which could lead to more significant and widespread job losses than any previous innovation.

The view expressed by WEF economists is that AI follows previous episodes of technological change, such as when the internal combustion engine and automobile replaced horses for work, or when technology was widely applied to agriculture. A few years ago, Microsoft President Brad Smith said: Written A great blog that explains the transition from the horse to the car and the broad impact it had on jobs. Most of what happened during this transition was unexpected, including the positive effects of job creation in related industries such as car and part manufacturing, road building, and even advertising.

According to According to the McKinsey Global Institute, the auto industry created 6.9 million new jobs in the United States between 1910 and 1950, equivalent to 11% of the U.S. workforce in 1950. This included the creation of 7.5 million jobs and the loss of 623,000 jobs. Smith said that technology was not the only factor that contributed to this rapid change, citing both changing cultural values ​​and the simultaneous decline of the auto industry. A moment of progress He promoted greater efficiency, health, and safety in cities.

In other words, technological advances alone have not driven these dynamic employment outcomes, so past technological innovations with their unique combinations of attributes do not necessarily predict futures where things will (and will) be different.

When it comes to AI, the past doesn’t predict the future

Today, it is not the early 20th century progressives but tech accelerationists who are driving the breakneck pace of change in AI. Those who share this view are advocates of rapid technological progress. Of course, there are opposing forces that promote the safety and responsible use of AI. But the absence of meaningful regulation (at least in the United States) that can effectively limit AI advances and their impact means that we are likely accelerating toward an uncertain future.

In essence, the impact of AI on work will not necessarily mirror past technological revolutions, as there is an important difference. AI is the first time we are outsourcing cognitive capabilities in addition to labor. This difference introduces a layer of complexity not seen before. Past disruptions were primarily physical in nature, replacing human power with horsepower, which in turn was replaced by machine power.

Outsourcing brainpower means that roles requiring problem solving, decision-making, and creativity — tasks once thought of as the sole domain of humans — will increasingly be handled by AI. While history teaches us valuable lessons, the unique nature of AI brings with it unprecedented and unpredictable challenges.

Will it supplement or replace jobs?

Challenges are already evident in some areas. investigation Revealed “74% of IT professionals are concerned that AI tools will make ‘many of their routine skills’ obsolete. Additionally, 69% of IT professionals believe they are at risk of being replaced by AI.”

The general consensus is that AI is a useful tool that augments humans, not replaces them, but this may be more about the limitations of the current technology than a guide to the future: The same survey reported that 35% of executives plan to invest in AI tools and technology to “eliminate unnecessary positions.”

These concerns are Federal Reserve Bank of Richmondrecently released a report about how companies are planning to use AI and automation to reduce workforces, finding that “45% of companies said they have implemented automation as part of workforce reductions in the past few years.” [and] A very similar 46% of companies said they plan to do something similar “over the next two years.”

in contrast, Federal Reserve Bank of Dulles So far, the impact of AI on employment has been reported to be minimal. They cite one respondent from a financial services company as a typical example: “AI can help reduce workload and increase productivity, but we are not yet at the stage where AI can replace workers.”

The statement highlights AI’s current role as a tool that augments workers rather than replaces them.

The playing field is changing

Even if employment changes are not yet visible in the figures, they are happening. For example, study A study of call center employees found that AI-enabled new hires performed just as well as experienced employees. Similarly, MIT Technology Review Reported A study showed that software engineers can write code twice as fast with the help of AI.

While AI itself may not change the total number of call center employees or software engineers, it has the potential to significantly change the composition of the workforce. The impact of this kind of change can be profound: it could enable entry-level workers to compete more effectively with experienced professionals, democratizing access to these jobs and increasing productivity, for example.

These changes could lead to a devaluation of field experience, downward pressure on wages, increased turnover, underemployment, the need for reskilling, and a widening skills and income gap between those who can and cannot adapt to AI-enhanced roles.

This trend is not limited to any particular profession or industry, as the financial services industry, for example, may be similarly affected. ReportedCitigroup concluded that AI will revolutionize the consumer finance industry and increase worker productivity: 54% of banking jobs are likely to be automated, and a further 12% of roles across the industry could be enhanced by AI technology.

There are already examples of entire call center departments being replaced with AI chatbots: Swedish fintech company Klarna, for example, deployed an AI assistant that now handles the workload of one million employees. 700 full-time staffIndia-based e-commerce platform Dukaan has laid off 27 customer service representatives, Replaced them With a bot.

Where are the new jobs?

While AI will disrupt existing roles, it will also create new kinds of job opportunities. Citigroup, for example, has said that financial firms will likely need to hire large numbers of AI managers and AI-specialized compliance officers in the future to ensure that their use of the technology complies with regulations. New positions are sure to be created across industries, from AI risk managers who assess and mitigate potential risks associated with AI implementations in business contexts, to AI human interface designers who create intuitive and effective ways for humans to interact with AI systems.

My personal favorite new role is the “AI Orchestrator” – a human expert who is essential in understanding contexts that machines can’t fully comprehend, making ethical choices, and building relationships with stakeholders. As an orchestrator, they guide various AI tools (text generators, image creation tools, video tools, etc.) and integrate the outputs to create the highest quality deliverables. Each tool acts as a member of the ensemble, and it is the human orchestrator who ensures the symphony has a harmonious and positive impact.

As AI continues to rapidly advance, the impact on employment will be complex and multifaceted. While historical parallels provide some guidance, the unique nature of AI, particularly its ability to outsource cognitive tasks, suggests we are entering uncharted territory. The future of work will likely be a combination of augmentation and replacement, with new roles emerging unevenly alongside the automation of traditional jobs. It remains to be seen how these changes will impact job growth or decline. But in the midst of unprecedented change, using the past to predict the future is looking in the rearview mirror.

Gary Grossman: Edelman.