How Will AI Impact the Job Market


Both, AI and deep learning have been on the rise for years. So far, it has not been integrated in our daily lives. However, it is a headline topic in the media on a day to day basis. One of the main concerns is that AI will substitute many jobs, potentially causing a global unemployment shock. This week’s article is trying to enlighten a few details on that potentially disastrous outcome, explaining what can be considered science fiction and what might be a potential reality we will have to face.


In order to create a common basis, I will start by defining the main two terms of this article. I will distinguish between artificial intelligence (AI) and deep learning. In contrast to deep learning, artificial intelligence “is intelligence demonstrated by machines” (Wikipedia). This includes “any device that perceives its environment and takes actions that maximize its chance of successfully achieving its goals”. Deep learning however is simply “a part of a broader family of machine learning methods based on learning data representations”. This means that the program will not independently teach itself and improve, but rather than analyse huge amounts of data, recognizing certain patterns and using these patterns to assist decision making.


The potential of these processes is very clear. Computers have the possibility to make decisions within nanoseconds, a speed that humans will never be able to catch up with. At the same time, they do not demand a wage, reducing costs for businesses. But which jobs can computers actually replace? The good news is that most researchers believe that over the next decade, most of the considered to be “boring” jobs will be replaced. According to Erik Brynjolfsson and Daniel Rock (MIT), the following jobs are most likely to be replaced by automated processes in the near future: Concierges, Mechanical drafters, Credit authorizers and Brokerage clerks. Nowadays, it is already possible to see changes concerning these jobs in the world. Tesla is a very good example of a company that is trying to push in the direction of automation. The company is trying to build self-driving cars. By now, the cars are already able to drive themselves, however, a human still needs to sit in the driver’s seat and pay attention. At the same time a fully self-driving car might already be realistic within the next couple of years. Many research papers believe that the percentage of jobs that will be replaced over the next two decades is very significant. A study by Carl Benedikt Frey and Michael Osborne (Oxford University) from 2013 concluded that approximately 47% of the jobs will eventually be replaced.


Erik Brynjolfsson and Daniel Rock (MIT) also point out which jobs are unlikely to be substitute by machines in the near future. Examples include massage therapists, animal scientists and archaeologists. Furthermore, many creative jobs (for example writing and poetry) are unlikely to be replaced by AI. Even though computers are incredible at analysing data and making assumptions, using those to make decisions, creativity might be the single biggest disadvantage machines have compared to human beings.


But the main question is the following: How do we tackle this problem? Erik Brynjolfsson and Daniel Rock suggest to focus on “the redesign of jobs and re-engineering of business processes”, rather than on trying to save the current jobs. This includes that the automation of simple tasks will give many humans the possibility to focus on higher level and more challenging tasks, that a computer might not be able to handle just yet. Furthermore, many Economists expect the transformation of the job market to have a significant influence on global GDP.


Impact of artificial intelligence (AI) on the gross domestic products (GDPs)

worldwide in 2030, by region (in percent/trillion U.S. dollars)

For this reason, many countries have been heavily investing in research on artificial intelligence. China has been among the countries to invest the most in artificial intelligence. Beijings plan is to lead the AI industry by 2030. However, it has failed to develop cutting-edge technologies during the last years. In the US it is the private sector that is heavily investing in AI. Silicon Valley’s flagships, including Google, Apple, Tesla and Co spend billions of dollars, trying to make sure not to miss out on this opportunity.


In conclusion, it is only possible to say that AI will have a significant impact on all of our lives. However, it is nearly impossible to estimate and predict how big the opportunities of AI actually are and how long it will take for AI to develop. For sure it will be “simpler” tasks that will be substitute first, how far AI can go however is very uncertain.

 

WRITTEN BY SIMON SCHOENHERR FOR BESA

PLEASE DIRECT ANY INQUIRY TO AS.BESA@UNIBOCCONI.IT

#AI #ArtificialIntelligence #GDP #JobsMarket #China #US #Investment #GDPGrowth

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