Every time we hear the word “recession” and we are reminded of the 2008 crisis and its impact on the job scenario. According to many experts the phenomenon of recession for an economy is unavoidable and the next one might be round the corner. But this time the equation will be slightly changed with the advent of artificial intelligence (AI), although there are mixed opinions about whether or not AIs will make the situation more intense. As AIs become more and more widespread, there will be a shift of work done by humans and those done by machines. Consequently, with another recession likely to happen soon, many experts have started to share their take on AI and what it could mean for the workforce.
According to a McKinsey report, it is estimated that around 14% of the global workforce will be required to change their occupations over the next 10-15 years. While another report by Pew Research, stated that around 38% of current jobs could be automated.
However, this is not the first time that technology is expected to disrupt the traditional way of our working and that actually has created a lot of apprehensions in the minds of the people who are afraid that innovation might take their jobs. Despite all the fears among the workforce, innovation has resulted in positive outcome for the job economy in the past because such innovations not only cause job displacement, but also create new industries and opportunities.
One should see AI as one of the disruptive technologies that can be utilized to improve efficiencies, tweak business processes and drive growth immediately. Another important aspect of automation that one should note is that it cannot substitute human performance entirely because the same set of employees can be assigned to perform some other new tasks instead of the work that has been replaced.
AI as an opportunity
There is a set of minds who take a positive view and believe that AI is expected to increase the number of jobs multiple times. But the question that remains is “HOW?”. Now, the optimists argue that innovation at workplace always results in job displacement, but it eventually helps in creating new industries and opportunities.
For instance, let us take the example of Flipkart which was an disruptive innovations for its time. Due to the platform of Flipkart, today a local manufacturer from any part of the country can sell his product across the country enhancing his/her target market. Not only that, it has also employed a large number of youth as delivery executives which vindicates the fact that innovation can improve an existing business and create new jobs.
But, it is true that it can be difficult to envisage what new opportunities or industries it will give way to and will those industries hire more people. This has been the case with most of the technological innovations. The positive impacts of AIs have been beautifully described in an article in Singularity Hub where the author claimed that “AI will be the greatest job engine the world has ever seen”.
According to a report published by the World Economic Forum, 58,000,000 more jobs are expected to be created by the end of year 2022 and it is all owing to AI implementation. The report stated that the AI implementation may displace around 75 million jobs due to shift in the division of labour between humans and machines, but it is also expected to create 133 million more jobs which are new roles that are more in line with the new division of labour between humans and machines. Another study conducted by PwC stated that technologies related to AI and robotics are likely to create sufficient new jobs to largely counter balance the potential job losses due to automation. Deloitte conducted a study that attempted to explore the relationship between creation of jobs and the upswing of technological innovation by analysing the census data for England and Wales as long back as the year 1871 and it concluded that technological innovation is a great job creating machine which is contrary to the popular notion that it is job destroying in nature.
Ominous effect of AI
Well, there are also many experts who feel that AI can have ill impacts on the existing job scenario. One such opinion was shared by Nobel laureate economist Wassily Leontief in the year 1983 when he stated that “The role of humans as the most important factor of production is bound to diminish in the same way that the role of horses in agricultural production was first diminished and then eliminated by the introduction of tractors.” The opinion seem to have gained traction during the last couple of years owing to the apprehension of job destroying potential of AI. According to a Pew Research, around 48% of the empanelled experts envisage a future where they expect robots and digital agents to displace a significant numbers of jobs and they also expressed concerns that such industrial disruption may eventually result in massive increases in income inequality because there will be a large number of people who will be effectively unemployable. According to a report published by McKinsey, the automation and shift towards AI is expected to improve productivity of the workforce and build economic growth, but it will be at the cost of millions of people globally who will have to either upgrade their skills or switch to a different occupation altogether.
So, it can be seen that although it is imminent that AI and automation will have far reaching social and political implications, but there is no certain way to know for sure that what future it actually holds. The only certainty is the requirement of the workforce is to upscale their skill levels so that they can fit in the evolving set-up due to technological innovation because both companies and employees alike will have to adapt with the changing times. It can be concluded that the transition to the AI economy is certain and it may be uneven with its own set of apprehensions.