Artificial Intelligence (AI) is set to shake-up the world.
In January 2023, Microsoft announced it was investing $10 billion in OpenAI, an AI research firm that is the brains behind ChatGPT. Seemingly more than a standard chatbot, ChatGPT has taken the internet by storm since its introduction in November 2022, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace1.
Indeed, when it comes to AI, the longer the timeframe the more extravagant the predictions. For some, AI will usher in a utopian world full of new opportunities. Others, like Elon Musk, have warned that the rapid rise of AI could be “potentially more dangerous than nukes2”.
Such debates are fun, but ultimately won’t be decided for decades. Yet what if we narrowed the lens and considered what AI promises for our workplaces in near future?
Many people think of AI as near omnipotent machines, yet the biggest disruption being realised now is automation. With computers and robotic devices now capable of performing complex – and extremely mundane – tasks with speed and precision, automation is taking hold in areas as diverse as agriculture, logistics (robotization), unmanned machinery, and admin and back office support (through Big Data).
Consider the maddening self-checkout machines at your local supermarket, or the algorithms subjecting your social media feeds. Both are examples of AI and automation.
Companies of all stripes are waking up to the power of AI. As well as greater productivity, fewer mistakes and better client service, some claim there’s a clear link between AI adoption and revenue growth, too.
According to an Insofys study, for instance, there is “a clear link between an organisations revenue growth and its AI maturity: organisations who report faster growth in revenue… were also more likely to be further ahead when it comes to AI maturity3”.
Increasingly, AI is being viewed as a long-term strategic priority that firms can ill-afford to slip behind on. It’s little wonder that virtually all supermarkets have adopted self-service checkouts, for instance, or that factories and even shipping ports are racing to automate as much as possible.
More than half of companies surveyed, for instance, accelerated their AI adoption plans during the Covid crisis, a recent study by PWC found4. Almost all said that AI is now a “mainstream technology” for them going forward. And 55% of companies accelerated their AI strategy in 2020 due to Covid and two-thirds said they were going to accelerate that strategy in 20215.
Not surprisingly, total investment in AI, which had stood steady through 2019 and 2020, boomed in 2021, and it is expected to remain strong in the coming years.
There will also be a far greater focus on data and analytics. In an increasingly digital and at-home world, firms must work to understand their customers and to create more flexibility in their supply chains and distribution networks. Cloud computing is becoming a must. And back office functions are being automated or outsourced as much as possible.
This, in turn, should increase productivity and help boost overall economic growth. The “deployment of AI and automation technologies can do much to lift the global economy and increase global prosperity, at a time when ageing [populations] and falling birth rates are acting as a drag on growth,” McKinsey notes6. All told, says PWC, “AI technologies are forecast to add $15.7 trillion to the global economy by 20307”.
Invariably, this means a negative impact for lower skilled workers in the developing world, with countries like China, India and Bangladesh likely to be hit hardest.
How many jobs could be lost? Estimates vary wildly. McKinsey, for instance, believes that around 15% of the global workforce, or around 400 million workers, will be displaced by automation by 2030, a figure that could rise to 30% under their fastest scenario modelled. Yet their slowest scenario would see just 10 million people displaced, which would have a negligible impact on the global workforce9.
New technologies could also generate new job opportunities. And those countries with the highest levels off AI adoption and automation – such as Switzerland, Singapore and the UK – haven’t experienced widespread job losses yet. So, the big disruption that many fear may not necessarily materialise – particularly if workers can be re-skilled to work alongside automated machines, rather than being entirely displaced by them.
Still, the workplace is likely to look radically different by the end of this decade, and policymakers, employers, workers and investors must prepare. Opportunities await, but it undoubtably won’t be smooth sailing for everyone.
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2 Source: https://www.cnbc.com/2014/08/04/ai-potentially-more-dangerous-than-nukes-musk-warns.html
3 Source: https://www.infosys.com/newsroom/press-releases/2017/leadership-workforce-implications-vital.html
4 Source: https://www.pwc.com/us/en/tech-effect/ai-analytics/ai-predictions.html
5 Source: https://appen.com/whitepapers/the-state-of-ai-and-machine-learning-report/
6 Source: https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/ai%20automation%20and%20the%20future%20of%20work%20ten%20things%20to%20solve%20for/mgi-briefing-note-ai-automation-and-the-future-of-work_june2018.pdf
7 Source: https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html
8 Source: https://www.credit-suisse.com/media/assets/corporate/docs/about-us/research/publications/ai-the-future-of-work.pdf
9 Source: https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/ai%20automation%20and%20the%20future%20of%20work%20ten%20things%20to%20solve%20for/mgi-briefing-note-ai-automation-and-the-future-of-work_june2018.pdf
This material is provided for informational purposes only and should not be construed as investment advice. Views expressed in this article as of the date indicated are subject to change and there can be no assurance that developments will transpire as may be forecasted in this article.