The Great (AI) Reskilling of America

McKinsey has done a great job of capturing the state of play in AI and expected impact on work. Here, I look at conclusions from three recent reports. The August 2023 analysis — The State of AI in 2023: Generative AI’s breakout year — is especially of note. We’ve heard of the adoption of ChatGPT, particularly in marketing, but use is spreading to other functions in a way that will have a major influence on how leaders plan their organizations and tasks.

And the adoption of Generative AI is not as much for cost reductions, as many assume, but more for revenue creation, either building on existing core businesses or facilitating the entry into new adjacent markets. This second area is paradigm shifting, since it will permit smaller companies to better expand their footprint, something that they previously may not have had the ability to address due to cost or talent.

Looking at skills, companies with a more forward view of AI have a good understanding of the challenges they will face and the probable impact. A report I look at below covers this in more detail, and as I mentioned earlier, it will have a major impact on organizational design.

Previously, McKinsey’s Technology Trends Outlook 2023 evaluated 15 sectors as to interest, talent availability, and investment. Though Generative AI makes up most of today’s news coverage and was expected to see strong growth across 2023, Applied AI has an order of magnitude greater impact. This is the practical application of AI for decision making and process automation, to name two applications. Job posting exceeded 250K in 2022, triple that of 2018, and McKinsey estimates the total economic value of Applied AI to exceed $17 trillion. Looking forward, Applied and Generative AI will increasingly co-mingle.

This analysis gels nicely with another report from July 2023, Generative AI and the future of work in America. Here, the authors paint positive picture as to how roles will shift over the next decade, many times from lower to higher paying jobs but with an overall net gain that is sometimes overlooked. But it does highlight the need for a concerted retraining program if we’re to enjoy the projected wage growth, and is very relevant given recent strikes by SAG-AFTRA and the UAW.

Thanks for reading!