Key Facts: The Impact of Generative AI on the Labour Market
After one year since the seismic impact caused by the launch of ChatGPT in November 2022, analyses and predictions about the future of our work are emerging.
This article aims to give you an overview of the main trends and save you time from going through these reports. Let’s see what the experts are saying in this domain.
Overall, the predictions do not foresee a future where humans will be replaced by bots and androids. Instead, they mainly anticipate changes in our work, where AI will automate tedious tasks and free up time for us to focus on things that really matter. Like with other industrial revolutions humanity has experienced, some jobs might disappear, forcing people to adapt to the change and develop new skills.
In a report from Goldman Sachs issued in July 2023, it is anticipated that a quarter of work tasks in the US and Euro area could be automated by AI. Below is the share of industry employment in the US exposed to automation by AI (in %):
The report also highlights that this automation should boost productivity growth (0.3 to 3.0 percentage points annually), but acknowledges that it is still difficult to accurately assess this boost.
Earlier in June 2023, McKinsey reported that Generative AI and other technologies have the potential to automate work activities that occupy 60 to 70 percent of employees’ time, providing another perspective on the impact of these technologies. They also predict that generative AI and various other technologies could contribute an annual increase of 0.2 to 3.3 percentage points to productivity growth.
Finally, a report from the International Labour Organization issued in August 2023 reached similar conclusions, emphasizing that the most significant impact is likely to be on automation (what they nicely call “augmenting work”). This automation is expected to free up more time to focus on other duties, as opposed to completely replacing jobs.
Interestingly enough, a study by two professors from Washington University and one from New York University, published in July 2023, has correlated the launch of ChatGPT with a decrease in the number of monthly jobs (2%) and monthly earnings (5.2%). The study was based on data from an online labour market, Upwork, which matches projects with freelancers. I am curious to see what the outcome of a similar study would be after the release of the recent features announced by OpenAI earlier this month.
From the chart above, which shows the share of industry employment in the U.S. exposed to automation by AI, it is clear that CIOs and IT managers need also to engage in serious reflection to embrace the change, if they have not already done so.
