The Impending Shift: AI Renders 40% of Job Skills Obsolete

0:00The headline here is obviously the fact that generative AI models like ChadGPT are super flexible in their capabilities and tasks like writing and coding and coding. of this, they're sparking a lot of concerns about the potential of job replacement. I recently had a podcast, if you listened to, it was 20 jobs that Chai GPT or GPT-4 is going to replace. It's actually a rerun of a podcast I did even earlier. So this is not a new concept. This is something that people have been concerned about for a very long time and for good reason. I think a recent study from IBM suggests a more optimistic view on this, right, than just replacement.

0:38and essentially is urging individuals to harness these AI tools for their benefit. Now, before I jump into this, I want to say I recently went to the AI4 conference. This is a big conference with people from all the top AI companies, giving talks, speeches, networking, all sorts of things. And there was a theme that I heard a ton at this conference, and I actually think it's false. Now, this is the theme. I heard this from like so many people. This was quoted by like so many people, top people at top AI companies that said, said, AI won't replace you, someone using AI will. Now, this is like a really good feel-good statement because it's like, don't worry, the AI won't replace you, just like someone using it will.

1:17So you learn to use AI really well. If you're like really good at AI, then it won't replace you. You're going to like keep your job and you're going to be great. Okay, so that's the feel-good thing that everyone's saying and they're trying to like comfort their employees. I think this is wrong. I think AI will 100 % replace you and I'll tell you why. But let's dive into this study really quick by IBM before I get on to my controversial statements that I think are actually very accurate. So in any case, diving deeper into AI's influence on business dynamics. So IBM, of course, I recently did this report and they really highlighted the transformative power of AI on operational strategies and its impact on job roles.

1:52So the data drawn from a really comprehensive survey involved 3000 C-level executives spanning 28 countries and another 21 ,000 workers across 22 nations. So this is obviously a very big study. This is actually something that I do, I'm going to give IBM a lot of props for, is the fact that they did a study with a lot of people, right? 21 ,000 workers, 3 ,000 C-level executives. I see so many studies where it's like, Bloomberg News surveyed 200 professionals, and I'm like, come on, that is the smallest sample size ever. In any case, from the study, they offer a lot of insights into the evolving workplace landscape.

2:28While changing is obviously inevitable with all this new tech, it isn't necessarily negative. So based on the surveyed executives' feedback, a staggering 40 % of their workforce will likely need reskilling within the next three years in light of the AI integration. Okay, so let's break this down. Coming from the very top, the C-suite, they're saying 40 % of our workforce is going to need reskilling within the next three years. Okay, but here's one question for you. Why? Okay, well, the AI is faster and better. And so you need your 40 % of your employees could be augmented with AI in the next three years.

3:01Okay, but what happens? We've seen the rate of acceleration on AI. It's happening very rapidly. What happens in three years when you hit this 40 % mark, let's say, when the AI is actually able to completely do that job? Are you going to reskill your workers? Or are you going to say, oh, gee, these 40 % that are kind of at risk great now, actually, we could just replace them. This is the scenario that I envision happening in the future. And I'll give you my points on this in a second. But essentially, this translates to a massive 1.4 billion of the global 3.4 billion workforce, as per World Bank figures.

3:35So that's 1.4 billion people that they say need to be re-skilled, and I argue, may be completely replaced. But there's a silver lining, a significant 87 in their study, there's a silver lining, but maybe it's not reality. We'll dive into it. But a significant 87 % of these executives anticipate generative AI to enhance roles rather eliminate them outright. Okay, this is the exact same thing I saw at my conference a lot, right? 87 % think it's just going to enhance roles instead of eliminate them. Why are they saying this? They're the C-suite executives. They don't want to scare their company, all their employees to say, you're going to get replaced.

4:11They don't want to be fear mongering. They want to say, no, it's going to be all good. But if it comes to a pinch where their company is on the verge of bankruptcy and they have the option of firing 40 % of their workers, replacing them with AI and staying in business, they're going to make that call. Like, I promise you, they're going to make that call on the verge of bankruptcy. That's what's going to happen. And right now going into potentially a recessionary period, we still have quantitative tightening. Like we're already seeing a lot of people cutting costs for a lot of reasons. This is something that you're hearing across all industries.

4:42I think it's going to be bigger than people expect. And I'm not trying to be here fear mongering or, you know, raising this alarm and being an alarmist. I really am just saying this because I want to be a realist and I want people to understand where this, I want people to understand where this goes and to be prepared for it. I don't want this to blindside anybody. So while the C-suite executives can paint a rose colored kind of picture of, you know, you can all be re-skilled, which I really, I think a lot of, I think when it comes to re-skilling, you probably, people aren't going to be in the exact same job and just being re-skilled, augmented with AI doing the same thing.

5:16I think that there's going to still be jobs. I don't think jobs are going to be eliminated. We're going to have this massive unemployment, but I do think that, so I think that there will be jobs that you can take to help you run these programs. But I think a lot of the tasks that people and organizations are doing customer service sales, I think they'll be completely eliminated. And they'll just be have a handful of people that are like running the system itself, developing prompts coming up with better strategies for it. But they're not going to be like the salesperson isn't gonna be making the sales calls or the customer service person isn't going to be, you know, chatting live with someone that's having an issue, AI is going to take care of all of that side of it.

5:51So jumping into the nuances of the whole IBM research, it's actually the IBM's IBV research. And it points out that tech savvy adopters who effectively navigate technology driven job changes witness an average revenue growth rate of 15 advantage of 15%. So more interestingly, those zoning in on AI capabilities enjoy a 36 % higher revenue growth rate compared to their counterparts. Now, why would that be? Let's be a little skeptical for a second, right? If you're zoning in on AI capabilities, like they say, so you, you know, you're, you specialize in AI capabilities and you're seeing a 36 % higher revenue growth rate.

6:32Why is that? Probably because you're eliminating costs. So if you're an employee, you're being, you know, you're getting a raise because you're essentially eliminating other jobs, augmenting with AI, and now you get a raise. Or if you're a company that's just diving into AI more, you're able to essentially eliminate employees, become more profitable and integrate more with AI. So this like AI boosts your salary. Yeah, it does. But like the money is coming from somewhere. Now, is that bad? Let's say those laid off employees go start their own company or go join a new startup or go do a new thing.

7:08And they like add to the global GDP. And now we have twice as many companies in America or any country producing twice as much stuff. So overall, the global standard of living could increase under this scenario. I'm not saying that it's bad. I'm just saying like that revenue, that money, it comes from somewhere. And I just don't see, I think AI is going to automate a lot more than we, than people are giving it credit for. And yeah, I'll just leave it at that. So simplifying this, IBM's report states, quote, AI won't replace people, but people who use AI will replace people who don't, right? Okay.

7:42This is straight out of IBM. Honestly, I may have talked to someone at IBM at the IAI4 conference. I talked to a handful of them that said something like verbatim for that. So maybe that's where this comes from. In any case, a noteworthy shift in these skills, in the skills landscape is pretty evident as well. Technology, technological proficiencies once held in high regard, like STEM expertise, which reigned supreme, you know, back in 2016, have since seen a demotion in priority by 2023. So why is the change? Tools like ChatGPT empower our users to achieve more, even with a lesser technical background, as this report obviously points out.

8:18So as 2023 rolls in, soft skills are kind of claiming the spotlight. Attributes like team management, effective team collaboration, communication, adaptability to change. All of these have really surged to the forefront and are earmarked as the most sought after competencies in the workforce today. And that is because people are trying to get beyond just a, essentially what it is people call it a skill but really what it is is you people try to move beyond knowing a specific tactic so a tactic for um marketing might be writing a lot of articles right a lot of these like what i call tactics are going to be replaced by ai and automated now the last thing i want to bring up is i saw really interesting if you follow me on linkedin if you don't follow me on linkedin i'm jaden schaefer but i recently reposted a video on linkedin which essentially was this just furthers my point but essentially was this janitorial robot is kind of cools this little machine like like janitorial cart looking thing and it drives up to the bathroom door it has a robot arm opens the bathroom door goes inside the bathroom door lips up the bathroom toilet with its arm sprays the whole thing down wipes it pulls out a mop sprays wipes the bathroom like it's a janitor robot and it cleans the entire bathroom perfectly and it was kind of funny because the person that posted it literally said um the company doesn't expect these to replace janitors but to help them do, you know, some of the less desirable tasks like cleaning the bathrooms.

9:38And it's like, yes, this thing is a fully capable robot that can open doors, walk in, spray everything down, like lift up items, move them around, mop, sweep, spray. A hundred percent this thing is going to replace janitors. Like, it's just funny. People always throw it, like, if they don't want there to be a negative sentiment with, because they know the reaction, the first instinct is, oh my gosh, this is going to replace jobs, right? Which, that's a fair assumption. People are afraid of change, but let's be honest, jobs have been evolving for the last 200 years.

10:10There's a lot of jobs that existed a long time ago that we wouldn't want to have today. So in any case, this is 100 % going to replace janitors. It said they were doing the bathroom, but this thing's going to definitely just go around and vacuum the office and wipe down the desks and do everything else a janitor would do. So janitor jobs are replaced. Now, there's going to be a job for someone to maintain those machines, maybe clean those machines, maybe refill the soaps and all sorts of other things. So there's like jobs that are created around this little robot, but it definitely eliminates a number of jobs.

10:40So one bright side I will bring up is that America and many countries are currently in a labor shortage. And I actually think this is because we've created so many industries and companies. I know many, many people that are struggling even now to find people hiring for jobs. So I believe that some level of automation isn't necessarily bad. And in addition, I think that a lot of people have a lot of philosophical conversations around this and what happens when jobs leave. But I think ambitious people, if you work hard, you're going to have the option to work and do something you love. But I do think it's fair to just know that there is change in the air and the AI is automating a lot of jobs.

11:17And I'm not going to sugarcoat that. I'm telling you exactly what as it is, as I think it is. I'm not going to be one of the people that says, don't worry, AI is not going to replace jobs. It 100 % will. So now the question is, like, what are you going to do about that?