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Generative AI's Impact On Jobs

Many try to equate to situation with labor, specifically in manufacturing, and what will happen with generative AI. The fears over robotics the past couple decades certainly were overblown. However, even that field is about to ramp up in ways we have no seen.

That said, the major difference is generative AI has the potential to impact jobs in almost every field. A robot (or machine) was not going to replace jobs in offices. This is not the case for software.

To see what is happening, we cite an article from the Harvard Business Review.

Here is the basic layout of the study:

Using a machine learning algorithm, we first grouped job posts into different categories based on their detailed job descriptions. These categories were then classified into three types: manual-intensive jobs (e.g., data and office management, video services, and audio services), automation-prone jobs (e.g., writing; software, app, and web development; engineering), and image-generating jobs (e.g., graphic design and 3D modeling). We then examined the impact that the introduction of Gen AI tools had on demand across these different types of jobs.

Here are the results:

After the introduction of ChatGPT, there was a 21% decrease in the weekly number of posts in automation-prone jobs compared to manual-intensive jobs. Writing jobs were affected the most (30.37% decrease), followed by software, app, and web development (20.62%) and engineering (10.42%).

Those are significant moves in only a couple years. We have to keep in mind, the study was done from July 2021 - July 2023. ChatGPT 3.0 was only about 8 months old at that point. We saw massive progress in the capability of these models over the last 16 or 17 months.

A similar magnitude of decline in demand was observed after the introduction of popular image-generating AI tools (including Midjourney, Stable Diffusion, and DALL-E 2) were introduced. Within a year of introducing image-generating AI tools, demand for graphic design and 3D modeling freelancers decreased by 17.01%.

Again, consider where image generation AI was at that time. We saw a massive increase in the capabilities during 2024.

This, however, is the most concerning part from a jobs perspective:

Additionally, we noticed that over time, there were no signs of demand rebounding, revealing a growing trend of job replacement. We compared this impact against both typical seasonal demand fluctuations on the job platform and the effects that automation had on traditional labor markets. The impact produced by gen AI tools was significantly more substantial. Comparing gen AI’s hits to robotic automation for example, researchers found that a 20-percentage-point increase in robot adoption in French manufacturing led to only a 3.2% decline in industry employment.

There "were no signs of demand rebounding, revealing a growing trend of job replacement." Thinks about that for a moment.

It is something I harped upon over the last few years. The idea that jobs are not going to disappear in massive numbers is an act of sticking one's head in the sand. We are starting to see indication that things are a dire as some of us forecast.

As I write these words, we are still in the early phases of the development of generative AI. applications are still somewhat scare. My prediction is that 2025 will be the year of AI agents. Here is where we could see the impact upon jobs intensify.

The Dividing Line

There is some optimism out of this.

People have a choice whether to become Luddites or not. Those who take the time to develop skills pertaining to generative AI will fare better than those who do not. We are heading deeper into a world where technical proficiency is crucial.

Fortunately, becoming adept at prompting and using generative AI is not as technical as coding using Python. We are seeing the ability for others to join in growing.

If I had to suggest a path to someone, it would be to spend the next year doing a deep dive into everything regarding generative AI. To me, it seems like the main objective for anyone who is looking to get ahead. We are only going to see things accelerating.

A way to sum this up is anyone who sits at a computer, engaging in productive activities will see their tasks automated. Whatever is done on a computer will be handled by it. This is going to happen within the next couple years.

Naturally, not everything will disappear. However, as we saw, declines are taking place. What happens if similar numbers are seeing from July 2023 - July 2025? Even worse, what if they accelerate?

We regularly cover what is taking place with Hollywood because there is an industry that is being disrupted at every level. The generative AI wave is just getting started.

The analogy I like is we are dealing with a 100 story skyscraper. At this moment, we are on the 2nd or 3rd floor.

That means we have a lot of upside ahead of us. How does the job market look when we are on the 50th floor?

My experience is, by that time, things will be moving ahead at light speed as compared to today.

The time to prepare is now.

Posted Using InLeo Alpha