AI and the Future of the Job Market

All around us, the very same technology that is said to change the world as we know it is being applied everywhere we look. Our phones can answer complex questions using synthesized voice, our computers can recognize how we look and grant access to familiar faces, and our cars can keep themselves in line or even totally take over steering. We’re talking, of course, about artificial intelligence (AI), an area of computer science that emphasizes the creation of intelligent machines that work and react like humans.

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New Industrial Revolution

So far, AI has made our lives easier in a number of different ways, but many experts fear that its impact in the near future might be far from pleasant. According to a report from McKinsey Global Institute, AI is likely to displace anywhere from 400 to 800 million jobs by 2030, which would require as many as 375 million people to find a new job.

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Such a massive transformation of the job market is akin to the Industrial Revolution, which was a period from about 1760 to sometime between 1820 and 1840 during which agricultural societies became more industrialized and urban as they embraced new manufacturing processes. If even the tamest predictions about the impact of AI on the job market come true, we will be looking at another industrial revolution, one that could lead hundreds of millions of people around the world unemployed and entire countries in turmoil.

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Job Destroyer

In the European Union, 54 percent of jobs are at risk of computerization, according to a Bruegel analysis. In the United States, 47 percent of workers have a high probability of seeing their jobs automated over the next 20 years, revealed a study by Oxford University researchers Carl Frey and Michael Osborne. Overall, McKinsey Global Institute estimates that 30 percent of the activities carried out today within 60 percent of jobs can be automated.

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Among the jobs that are most likely to be displaced by AI are administrative assistants, customer service representatives, accountants, electrical and mechanical technicians, managers of retail, editors, journalists, salespersons, data entry clerks, drivers, financial analysts, telemarketers, radiologists, and other jobs which depend on repetitive tasks.

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“The vast majority of respondents to the 2014 Future of the Internet canvassing anticipate that robotics and artificial intelligence will permeate wide segments of daily life by 2025, with huge implications for a range of industries such as healthcare, transport and logistics, customer service, and home maintenance,” states a Pew Research Center study.

“Half of these experts (48%) envision a future in which robots and digital agents have displaced significant numbers of both blue- and white-collar workers—with many expressing concern that this will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order.”

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Light at the End of the Tunnel

While the future of the job market might seem very bleak, many analysts believe that AI will eventually create more jobs than it destroys. A new report by audit firm PwCstates that while AI could displace roughly 7 million jobs, it could also create 7.2 million jobs, resulting in a modest net boost of around 200,000 jobs.

“Major new technologies, from steam engines to computers, displace some existing jobs but also generate large productivity gains,” said John Hawksworth, PwC’s chief economist.“Our analysis suggests the same will be true of AI, robots and related technologies, but the distribution of jobs across sectors will shift considerably in the process.”

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Global research and advisory firm Gartner agrees with this assessment, and its recent study states that by 2020 AI will automate 1.8 million people out of work, but it will create 2.3 million jobs, resulting in a net gain of 500,000 new jobs.

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Conclusion

Regardless of what impact AI will eventually have on the job market, it’s clear that the transition from a job market where humans were in charge to a job market where humans merely assist intelligent machines will be painful. It could bring a turbulent period of high unemployment, which could even force us to re-think the compact of employment and pass new legislation to help humans coexist alongside machines.

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